Finally, the Constitutional Court delivered its ruling on the mandatory review of the mega-reform. Now, the bill is ready to be enacted. That event is expected to take place during the coming week.
Among the main changes, the reduction of the corporate tax rate from 27% to 23% is established, along with the reintegration of the tax system and tax invariability for 25 years, among other matters. Thus, in 2027 the rate will go from 27% to 25.5% (tax year 2028); in 2028 to 24% (tax year 2029), and in 2029, to 23% (tax year 2030). The elimination of the 10% tax on capital gains also moved forward.
Continuing with the structural tax modifications, the reintegration of the tax system was approved with the votes of the ruling coalition and the PDG; this will also be gradual, returning to full reintegration in tax year 2031.
However, one of the changes that the Constitutional Court partially approved is the mechanism established to replenish resources for municipalities due to the elimination of property taxes for senior citizens.
Specifically, the compensation to own-source revenues — and not the portion redistributed through the Municipal Common Fund — was tied to a reduction in the term of municipal permits. That was declared unconstitutional. Now, the compensation will apply in all cases.
It also declared unconstitutional a provision that temporarily allowed revenues from the new collection modality of…
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PulsoNow, the bill is ready to be enacted. That event is expected to take place during the coming week. CommentsFinally, the Constitutional Court delivered its ruling on the mandatory review of the mega-reform. Now, the bill is ready to be enacted. That event is expected to take place during the coming week. Among the main changes, the bill establishes a reduction of the corporate tax rate from 27% to 23%, the reintegration of the tax system, and tax invariability for 25 years, among other matters. Thus, in 2027 the rate will go from 27% to 25.5% (tax year 2028); in 2028 to 24% (tax year 2029), and in 2029, to 23% (tax year 2030). The elimination of the 10% capital gains tax also moved forward. Minister of Finance, Jorge Quiroz. Continuing with the structural tax modifications, the reintegration of the tax system was approved with the votes of the ruling coalition and the PDG; this will also be gradual, returning to full reintegration in tax year 2031. However, one of the changes the Court partially reviewed is the mechanism established to replenish resources to municipalities for the elimination of property taxes for senior citizens. Specifically, because the compensation to own revenues — and not the portion redistributed through the Municipal Common Fund — was tied to a reduction in the term of municipal permits, that was declared unconstitutional. Now, the compensation will apply in all cases. It also declared unconstitutional a provision that temporarily allowed revenues from the new business license collection modality not to be allocated, in the percentage determined by law, to the MCF. The rationale was that only four municipalities have the obligation to allocate part of their license revenue to the MCF: Santiago, Providencia, Las Condes and Vitacura. More about:Mega-reformNEWSLETTERPulso PMMonday to Friday, 12:30 PMThe most relevant news on markets, companies and business: timely information, context and content to make better decisions. By subscribing you are accepting the Terms and Conditions and Privacy Policies of La Tercera.