New Tax Benefits

A new Law establishes tax measures as part of the emergency plan for economic and employment reactivation, within a framework of medium-term fiscal convergence.

Last September 2, Law 21,256 was published in the Official Gazette, whose main tax measures are the following:

1.- Income tax Pro Pyme regime.

The income tax rate for companies under the Pro Pyme Regime contemplated in letter D) of Article 14 of said law is reduced to 10% for income received or accrued during fiscal years 2020, 2021, and 2022. Additionally, the PPM rate is reduced by half for the years mentioned above.

2.- VAT Pro Pyme regime.

The option of requesting a refund of the remaining accumulated VAT tax credit, determined in the tax return made in the months of July, August, or September 2020, is established for those who meet the following copulative requirements

  1. That between January 1 and May 31, 2020, the average of their income has experienced a decrease of, at least 30%, in comparison to the income obtained in the same period of 2019.
  2. That from the declaration made in the month of June 2020 there is a remaining VAT tax credit generated between January 1 and May 31, 2020.
  3. That they are not in any of the cases contemplated in Article 59 bis of the Tax Code.
  4. That they have filed all their VAT returns for the last 36 tax periods.
  5. That the operations in respect of which the reimbursement is determined to be appropriate are registered in the sales and purchases register.
  6. That they do not have a tax debt.

3.- Instantaneous depreciation

The date of application of the instantaneous depreciation, equivalent to 50%, contemplated in Law No. 21,210 is modified, which is in force for assets acquired until May 2020.

Taxpayers who file first category tax returns on effective income determined according to full accounting, who acquire physical goods of fixed assets—new or imported—between June 1, 2020, and December 31, 2022, may depreciate such goods instantaneously, in the same business year in which they are acquired. This measure may also apply to certain intangible assets destined for the interest, development, or maintenance of the company.

4.- Postponement of electronic invoicing.

The deadline for the entry into force of the obligation to issue electronic invoices applicable to those who are already invoicing electronically is postponed from September 2020 to January 2021. For the rest of the taxpayers, it will be effective from March 1, 2021.

In this regard, it is important to note that several of the modifications established in this law are already in force and, therefore, we recommend taking the necessary measures to implement these changes.

We have an expert tax team, focused on providing optimal results for companies of different sizes and industries.

Alberto Panchana

Sepúlveda

Auditor Accountant from Universidad de Santiago de Chile – Master’s Degree in Tax Planning and Management from Universidad Adolfo Ibañez – Management positions and extensive experience in Compliance and National and International Tax Management – Tax Associate at Addval Consultoría Integral.