Reconstruction Law: What It Contains and Which Decisions It Opens for Your Company

On 4 August 2026 the Senate approved the joint-committee report and Congress dispatched the bill to the Executive. The vetoes, the Constitutional Court and enactment followed, and publication on 17 October 2026 set the start date of every deadline in the law.

• The last pending point was the fiscal compensation to municipalities for the property-tax exemption: the Treasury covers the lost revenue. The dispatched text conditioned each transfer on the municipality having filed in full and on time the monthly information required by Article 70 of Law No. 21.306, and on showing by 15 April each year at least a 30% cut in the average processing time of municipal permits against the 2023-2025 average. The Chamber approved the report on 22 July and the Senate ratified it on 4 August (27-22), which dispatched the reform from Congress. In its preventive-review ruling of 2 October the Constitutional Court declared both conditions unconstitutional and ordered them removed, so the transfer is no longer subject to them.
• On 5 August 2026 the Executive filed three suppressive vetoes: on compound interest (anatocismo), the financial right to be forgotten, and Article 40, which barred agreeing invoice payment terms beyond 30 days and shortened the State's payment terms. The Chamber approved the three on Monday 10 August (75-59 on anatocismo, 75-58 on the financial right to be forgotten, 74-50 on 30-day payment) and the Senate did the same on Wednesday 12 August (24-18, 23-15 and 20-17 in a second vote). With both approvals, the three rules are definitively out of the final text.
• The opposition filed three challenges before the Constitutional Court against several provisions of the bill, among them the tax invariability regime (Articles 29 and 38) and the indemnity for the judicial annulment of an environmental permit, or RCA (Articles 12 and 13). The Court consolidated the cases (Nos. 17.828, 17.829 and 17.832-26-CPT), heard 64 organizations at the public hearing of 12 August, heard oral arguments and reached its decision on 13 August, and issued its ruling on 26 August, accepting the filings only in part. It declared Articles 12 and 13, parts of Articles 5 and 11 and four elements of Article 29 unconstitutional, and upheld the core of the tax invariability regime on the casting vote of the Court's president. The constitutional organic provisions also went through mandatory preventive review.
• The Executive filed its own challenge on 8 August, against Article 31 on free reconnection of basic services in areas under a state of catastrophe. The Court reached its decision on 25 August and, by its ruling of 2 September, rejected it nine votes to one: the provision stands. Distributors must reconnect free of charge the residential users and micro, small and medium-sized businesses disconnected for non-payment (electricity and gas within 48 hours, water within 24, from the request).
• On 2 October 2026 the Constitutional Court issued its preventive-review ruling on the organic provisions (Case No. 17.917-26-CPR), which concludes its review. It ordered three sets of provisions removed as unconstitutional: Article 12, which let the holder of an annulled environmental permit (RCA) and the Finance Ministry challenge before the Santiago Court of Appeals the indemnity amount set by the arbitral tribunal; the fourth and fifth paragraphs of the new article 36 bis of Decree Law No. 3.063 of 1979 on Municipal Revenue (Article 32 of the bill), which made the transfer of compensation subject to two conditions; and the sixth paragraph of the seventeenth transitory article, which exempted municipalities in 2027 and 2028 from paying into the Common Municipal Fund the excess they collect on overdue business licences and waste-collection charges, up to their lost property-tax revenue. The President enacted the law on 9 October, and the Official Gazette published it on 17 October 2026 as Law No. 21.850. The time-limited windows were never challenged and reached the published text intact.
• With publication on 17 October 2026 every window has a date: the substitute tax until 17 June 2027, donations for one year from 1 December 2026, and the regularization from 1 January 2027 for twelve months. The deadline now runs against each company's plan.

Those deadlines matter because the heart of the package for owners is three one-time opportunities.

Alongside the windows, the law changes the permanent tax burden of the general regime.

The corporate tax of the general regime (article 14 A) falls in three steps, with provisional monthly payments adjusting in parallel. For the Pro Pyme regime of article 14 D the transitional rate of Law 21.755 still applies, and its permanent rate falls from 25% to 23%.

The credit is assigned by the year the profit was generated, not the year it is withdrawn. Profits accumulated through the close of 2026 keep the current rules even if withdrawn years later, and the law orders them consumed first. Waiting therefore improves future profits, not the historical stock: for the stock, the tool is the 10% substitute tax. From 1 January 2027, capital gains on shares with stock-market presence also leave the single 10% tax and return to non-taxable income status, and a new credit rewards exporters of knowledge-based services.

The detail of the schedule, the credit mechanics and what to model before deciding in 2026 are covered in the corporate tax cut page.

The law does not stop at taxes: it also rewrites rules that touch daily operations.

1. SENCE training credit falls to 0,7%

   The training credit falls from 1% to 0,7% of payroll, with an employer co-payment scaled to the worker's pay: coverage of up to 80% for wages up to 25 UTM, 50% between 25 and 50 UTM, and 15% above 50 UTM. The co-payment cannot be passed on to the worker.

2. Municipal debt relief

   Municipal debts (licenses, fees, waste charges of the 3 years before 2026) qualify for full relief of interest and fines, on request within 12 months from 1 December 2026. Note the limit: the parallel Treasury program for national taxes, open for 180 days from 17 October 2026, applies only to individuals and micro, small and medium-sized companies.

3. Housing VAT: one-year exemption on first sales

   The first sale of a dwelling whose final works reception is dated before 17 October 2026 can opt for a VAT exemption during one year counted from 1 December 2026. The deed must be signed within that year, or rest on a promise of sale made by public deed or notarized private instrument within it, and must state the exemption expressly. The seller keeps the VAT credit paid on construction. Sales deeded with VAT paid between the bill's entry into Congress (22 April 2026) and 1 December 2026 can also qualify, if the seller refunds the tax to the buyer and requests its return.

Just as important as what the law contains is what it dropped along the way or still hangs on a court ruling.

• Universal childcare was removed from the text: the approved law contains no such obligation or benefit.
• Three articles were removed from the final text by the suppressive vetoes Congress approved on 12 August 2026: the ban on compound interest (anatocismo), the financial right to be forgotten (erasure of old debt data), and Article 40 on invoice payments, which barred agreeing terms beyond 30 days and, for State bodies, cut the exceptional payment term from 60 to 45 days and set formal acceptance within 8 calendar days. None of these rules will take effect with this law.
• The tax invariability regime for investments of USD 50 million or more survived the Constitutional Court in its core, on the casting vote of the Court's president, but the ruling of 26 August 2026 struck some of its extensions, among them the Finance Ministry's power to extend the capital-deployment deadline and the rules on related projects. Our guide to the new tax stability agreements examines the full regime for investors.
• The right to an indemnity for judicially annulled environmental permits (RCA) and its arbitral procedure were declared unconstitutional and are not part of the law. The published text still carries, as Articles 12 and 13 and the fourteenth transitory article, provisions on challenging the amount set by the arbitral tribunal, which refer to that regime. The broader reform of permits and environmental assessment is a chapter of its own and will be covered separately.

The questions below gather the doubts that come up most often when a company and its owners review the package.

Informational content, updated as of October 2026. It does not constitute legal advice for a specific case.