The sweeping tax reform of José Antonio Kast's government is now law of the Republic. According to La Tercera, it was published in the Diario Oficial (Chile's official gazette), which starts its implementation. The same outlet gives the day in two different ways: its subheadline says Saturday and the article body says Thursday.
The bill was submitted to Congress on April 22 and passed on August 12. The Tribunal Constitucional (Constitutional Court) completed its review on October 2, and the President signed it on October 9.
To apply it, the Servicio de Impuestos Internos (SII, Chile's tax authority) will issue 13 circulars and 17 resolutions. It will put them through public consultation and before the Comité Tributario (Tax Committee), which has 10 days to review them. Think of a circular as an instruction manual: it explains how the SII will interpret the law. A resolution carries more weight, because it is a formal act that creates or modifies legal situations and is binding on everyone.
The first measure to take effect is the Impuesto Sustitutivo sobre impuestos finales (IUSIF, a substitute tax on final taxes), which starts as soon as the law is published and lasts eight months. Also starting immediately is a Tesorería General de la República (Chile's General Treasury) process offering payment facilities and waivers of interest and fines for small businesses, medium-sized companies and individuals, for 180 days.
If you are thinking about buying a new home or making a donation, the dates are different. The VAT exemption on sales of new homes begins on December 1, 2026, and lasts one year. The temporary cut in the tax on donations applies to those formalized by public deed within one year from that same date.
The new window to repatriate capital, that is, to declare and bring back into the country money held abroad, opens on January 1, 2027, and runs for 12 months.
Among the permanent measures, the first to be rolled out is the employment credit. This benefit targets job creation in the knowledge-services export industry within the digital economy. The credit for catastrophic illnesses will apply from January 1, 2027.
Several changes start that same day. The 10% single tax on capital gains is eliminated, and property taxes (contribuciones) for older adults are eliminated. The optional 5% single tax for DFL2 homes (a Chilean housing category with tax benefits) of up to 90 square meters also begins. New DFL2 homes of up to 140 square meters will qualify if purchased within the year following the law's publication.
Also from 2027, tax invariability takes effect, which freezes the tax rules for an investor for a fixed period. It will be 10 years for investments from US$ 50 million and under US$ 100 million, 15 years for those between US$ 100 million and US$ 350 million, and 20 years from US$ 350 million.
The cut to the first-category tax, the one companies pay on their profits, will be gradual. It will fall from the current 27% to 25.5% in 2027, to 24% in 2028 and to 23% in 2029, applying to the 2028, 2029 and 2030 tax years.
The return to the integrated system, in which the tax paid by the company is credited against the tax paid by its owners, will also come in stages. The restitution stays at 35% in 2026, drops to 30% in 2027 and to 20% in 2028, reaching full integration in 2029.
