The Official Gazette published Law No. 21,850 for "National Reconstruction and Economic and Social Development" this Saturday, October 17. It is the central economic reform of José Antonio Kast's government, led by Finance Minister Jorge Quiroz.
According to El Mostrador, the text runs to 46 pages, and publication was the last outstanding formal step. However, its provisions will not all take effect at once. The schedule starts in November and extends through 2029.
Before publication, the Office of the Comptroller General of the Republic approved the promulgation decree. According to El Periodista, the agency verified that the text matched what Congress had approved and what the Constitutional Court (TC) had ruled. Even so, it objected to references that remain linked to articles the TC declared unconstitutional.
The first measures take effect on November 1. Companies exporting knowledge-based services will be able to claim a tax credit of 15% on qualifying wages. The figure rises to 20% if employees work primarily in regions outside the Metropolitan Region or in rural municipalities within it.
That day, the rate for Monthly Provisional Payments (PPM), the advance tax payments made by small and medium-sized businesses, also falls from 0.25% to 0.23%. In addition, the Internal Revenue Service (SII) will be able to exchange data with other government agencies to improve enforcement.
The training tax incentive administered by the National Training and Employment Service (Sence) also changes. It will fund up to 80%, 50% or 15% of course costs, depending on the salary bracket of the workers benefiting.
The most significant measure for the real estate market arrives on December 1. For twelve months, the first sale of new homes with final municipal approval will be exempt from VAT, with no price or floor-area limits.
On the same date, a temporary 50% reduction in gift tax begins, lasting one year and subject to certain conditions. Those who use it will not need judicial authorization and will be able to donate up to half their assets.
The change with the largest fiscal impact begins in 2027. The first-category tax, paid by companies under the general tax regime, will fall from 27% to 25.5% that year, to 24% in 2028 and to 23% from 2029.
A twelve-month window will also open in January to regularize undeclared assets and income abroad. The extraordinary tax will be 10%, falling to 7% if the funds are brought into or invested in Chile. Another substitute tax of 10% will apply to accumulated profits in registers such as STUT and FUR, with eight months to opt in.
For debtors, the General Treasury of the Republic will have 180 days to offer payment arrangements to individuals and micro, small and medium-sized businesses with debts overdue as of December 31, 2025. Those paying in full may receive waivers of up to 100% of interest and 80% of fines. Under installment agreements, the reductions will reach up to 95% and 75%.
With the legislative process complete, the executive branch moves to implementation. According to El Mostrador, several provisions will need administrative instructions from the SII and other agencies before November 1 to be put into practice.
