This Saturday, the Official Gazette published Law No. 21,850, "for National Reconstruction and Economic and Social Development," according to Emol. It is the main economic initiative of José Antonio Kast's government and comes just over a week after its enactment.
The text runs to 46 pages and was promoted by the Ministry of Finance. Many of its measures were contingent on publication to take effect. Publication started the clock: the first provisions take effect on November 1.
Four changes begin that day. The first is a tax credit for companies exporting knowledge-based services. They will be able to deduct 15% from first-category income tax for each worker in the Metropolitan Region and 20% for those working in other regions or in rural municipalities of the capital.
The second benefits small and medium-sized businesses. The rate for Monthly Provisional Payments (PPM), the advance payments of annual tax that companies make each month, falls from 0.25% to 0.23% under the SME Tax Regime.
The third expands the Internal Revenue Service's (SII) powers. The agency will be able to cross-check data with other government agencies for tax enforcement.
The fourth changes the National Training and Employment Service's (Sence) training tax incentive. The law will cover up to 80% of course costs for those earning up to 25 UTM (monthly tax units). Between 25 and 50 UTM, the cap falls to 50%, and above that range, to 15%.
The rest of the package will take longer. From December 1, and for twelve months, the first sale of completed new homes will be exempt from VAT. The tax break will have no price or floor-area limit.
A 50% reduction in gift tax begins on the same date, applying to public deeds signed during the following year. The law also eliminates judicial approval of gifts, a court procedure, and authorizes transfers of up to half of a family's assets.
Capital repatriation will open in 2027. Those bringing funds from abroad will pay a blended rate of between 7% and 10%, with a one-year window to apply.
There are two additional windows. One allows the withdrawal of profits accumulated in tax registers such as STUT and FUR at a flat tax rate of 10%. It will last eight months and, with the law published in October, would be available until June.
The other is administered by the General Treasury of the Republic. For 180 calendar days, those with debts overdue as of December 31, 2025, will be able to sign agreements waiving all interest and 80% of fines.
Emol does not detail how much the benefits as a whole will cost the treasury or how much the government expects to collect. Nor does it report how the SII will monitor the use of the new credits. The first concrete step in implementation will be November 1, two weeks away.
