Fischer y Cía. has created this website in order to support understanding and debate on these changes to the Chilean tax system. This is general information. Therefore, it is not necessarily complete or exact. It is also continually updated and corrected. We invite you to collaborate with this initiative by sending comments or documentation to


Proposed amendments to the chilean Tax Reform Bill 2022 (October 17, 2022)

November 17, 2022

Inheritance and Gift Tax Law (“IGTL”)

The rules for the valuation of shares to determine the tax base of the inheritance and gift tax are amended (article 46 IGTL):

  • Entities actively traded in a stock exchange (acciones con presencia bursátil), either in Chile or abroad: the value will be the average price of the shares in transactions performed in the prior 6 months.
  • Entities not actively traded, that have audited financial statements:
    • Highest value between the entity’s financial equity and its tax equity. This valuation rule applies for both Chilean and foreign entities (previously this treatment was only applicable for Chilean entities).
    • Greater legal certainty is provided. The original tax reform bill established that, when the audited financial statements did not accurately reflect the economic value of the company, the shares had to be valued according to the value of its underlying assets (this treatment is still applicable for companies that do not have audited financial statements).
  • Entities not traded in a stock exchange and without audited financial statements: Previously, their value was determined in accordance with the value of their underlying assets. The proposed amendments add that underlying liabilities need to be deducted from said value.
  • A special treatment is added for the valuation of entities with residence in low tax jurisdictions (as defined in article 41 of the Income Tax Law): their value must be determined in accordance to the valuation of their underlying assets.

Unified Funds Act (Law 20.712, “LUF” according to its acronym in Spanish)

Amendments are proposed to articles 81, 82 and 86 of the LUF, the following being the most relevant ones:

Art. 81:

  • The amounts to be included in the record of accumulated profits (“RUA” according to its acronym in Spanish) and in the record of temporary differences (“RDT”, according to its acronym in Spanish) is modified:
    • RUA: income received that has been taxed with corporate tax (“IDPC”, according to its acronym in Spanish) at origin, that has been subject to taxation abroad or that has been subject to the Chilean withholding Tax (tax paid in Chile to amounts remitted abroad).
    • RDT: income received or accrued that is subject to personal income taxes (IGC, according to its acronym in Spanish), withholding tax or Dividends Tax, and that has not been subject to corporate tax, withholding tax or foreign taxes.
  • Upon a fund spin-off, the income tax registers (RUA, RDT, REX and Foreign Income Register) will be distributed among the continuing and the new entity(ies) in proportion to the financial equity allocated to each of them (and not according to the tax equity allocated, as proposed in the original tax reform bill).
  • The Tax on deferred income will be applicable to Funds, over the balance of the amounts registered in their RUA and their RDT. This tax contradicts the main objective of public investment funds, which is to gather funds from the public precisely for their passive investment in a diversified portfolio and with a professional administration, reducing risks and transactional costs.
  • At the fund’s liquidation, the profits and other amounts accumulated will be considered as distributed to the quota holders in accordance with their participation in the fund, for their taxation according to article 82 of the LUF.

Art. 82:

  • Taxation applicable to Chilean-resident quota holders is modified. In general terms:
    • Final Taxation Taxpayers:
      • Distributions made from the RUA will be subject to the Dividends Tax (22% rate) established in the Income Tax Law. Personal Income Tax (IGC) taxpayers can elect to be subject to this tax instead, according to the general rules.
      • Distributions from the RDT will be subject to corporate tax (IDPC) and Dividends Tax. Personal Income Tax (IGC) taxpayers can elect to be subject to this tax instead, according to the general rules.
      • Distributions made from the Register of Exempted or Non-Taxable Income (“REX”, according to its acronym in Spanish) will not be subject to any tax. However, amounts that are exempted from personal income tax (IGC) will be considered to determine the progressivity of the rate.
    • Corporate Tax (IDPC) taxpayers receiving distributions from the RDT: the distribution will be subject to IDPC.
  • Taxation applicable to non-Chilean resident quota holders is modified. In general terms:
    • The distinction between quota holders that are residents in a country with which Chile has a Tax Treaty in force and those that are not is eliminated. As a consequence, and considering that the corporate tax does not work as accredit against the withholding tax, quota-holders with residence in a tax treaty country may claim the application of the reduced tax rates provided in the relevant treaty if the taxation applicable under Chilean domestic law is higher.
    • Distributions made from the RUA will be subject to a sole 14% withholding tax.
    • Distributions made from the RDT will be subject to a sole 35% withholding tax.
    • Distributions made from the REX will not be subject to taxation, unless they are only exempted from the personal income tax (IGC).
    • Statutory capital repayments are not subject to taxation, but an imputation set of rules is established: they first need to be imputed to the RUA and RDT, and afterwards to the statutory capital, adjusted by inflation.
    • The Fund’s Management Company will act as a withholding agent and will need to withhold a provisional 14% rate of the amounts to be remitted, distributed, paid, credited into an account or made available to the contributor. If the provisional rate becomes insufficient, the Management Company will need to pay the difference, notwithstanding that they can later collect the amounts from the respective quota-holder.
    • The tax exemption for funds investing mainly abroad remains. Limitations for the case of Chilean-resident beneficiaries who are entitled to 5% or more of the fund’s profits are reincorporated (a limitation that had been eliminated in the original reform).

Art. 86:

Tax treatment applicable to Private Investment Funds (“PIF”) is modified in the following sense:

  • As a general rule, PIF’s are subject to corporate tax (IDPC) according to the general rules (article 14 A of the Income Tax Law).
  • PIF’s investing in venture capital will not be subject to corporate taxation if they comply with the following requirements:
    • Their investments in venture capital represent at least 85% (used to be 100%) of their total investments, over a period of at least 300 days (used to be 330 days) of the calendar year. The remaining 25% can only be invested in fixed-income investments.
    • PIF’s that comply with the previously mentioned requirements will be taxed according to the general treatment applicable to public investment funds (articles 81 and 82 of the LUF).
  • Fund’s quota-holders are subject to the Income Tax Law general rules regarding the profits received in the tax year.
  • Upon liquidation, FIPs are subject to article 38 bis of the Income Tax Law in accordance with the general rules.

Other Amendments:

  • Incorporation of a new Bill creating a “Law on Tax Benefits for Investment and Sustainable Development”.
  • Additionally,
  • , the proposed amendments modify:
    • The special franchises established for Magallanes and Antofagasta regions, and the law on free-trade zones.
    • The Customs Act, in relation to the special regime of notifications to be made by the National Customs Service, as established by the original reform.