• The Bill proposes a gradual reduction of the Corporate Income Tax rate, currently set at 27% to 23% for medium and large enterprises.
• This reduction would be implemented progressively during the government’s term, as follows:
  • 27% for income accrued or received during the 2026 commercial year;
  • 25.5% for income accrued or received during the 2027 commercial year;
  • 24% for income accrued or received during the 2028 commercial year; and
  • 23% for income accrued or received during the 2029 commercial year.
• The rates indicated for tax years 2026 and 2027 shall not apply to taxpayers referred to in Article 14(G) of the Income Tax Law.
• Accordingly, the monthly provisional tax payments for the months of January through March will be adjusted during the transition period as follows:
  • January – March 2027: reduced by 5.56%.
  • January – March 2028: reduced by 5.88%.
  • January – March 2029: reduced by 4.17%.

The inclusions in color correspond to amendments submitted to the original bill, as approved by the Chamber of Deputies.

• The proposal contemplates the introduction of a fully integrated tax system, replacing the current semi-integrated regime that presently applies to the general income tax system.  
• Consequently, the Corporate Income Tax paid at the company level would be fully creditable -100% instead of the current 65%- against the final taxes applicable to its owners (Personal Income Tax or Withholding Tax).
• For these purposes, the current obligation to repay 35% of the credit is eliminated.
• The application of this measure will be gradual, achieving full reintegration by the year 2030. In this manner, the obligation to repay corporate income tax credits will decrease gradually as follows: 30% for credits generated during the 2028 tax year and 20% for credits generated during the 2029 tax year, eliminating said obligation for the year 2030.
• This measure aims to simplify the structure of the tax system and strengthen investment incentives by eliminating the need to distinguish between domestic and foreign investors, as well as between investors resident in jurisdictions with double taxation treaties and those resident in jurisdictions without such treaties.

• The Bill proposes the creation of a tax credit applicable to the monthly wages paid to each employee, equivalent to 14% for remunerations up to 7.8 UTM (approx. USD $560,000), which decreases progressively to 0% for remunerations exceeding 12 UTM (approx. USD $847,000).
• This credit will increase by 1% if the employee is a woman or decrease by 1% if the employee is a man. In both cases, if the employee is under 25 years of age, the credit will increase by an additional 1,5%.
• The credit percentage is determined by applying a rate to each employee’s monthly earnings, with earnings defined as taxable income and cash allowances for food, transportation, and housing.
• This credit may first be applied against Monthly Provisional Payments and, if any balance remains, against VAT and, finally, against Corporate Income Tax. If any remains, it may be used in periods following the one in which it was generated.
• This benefit will apply to both companies subject to the general tax regime and SMEs.
• State-owned companies or those with public ownership exceeding 50% are excluded.

Effective date: first day of the month following the law’s publication. 

The inclusions in color correspond to amendments submitted to the original Bill, as approved by the Chamber of Deputies.