Advisory on the Chilean corporate tax cut of the Reconstruction Law by Anguita Osorio.
Modeling of dividend timing, owner credits and capital-gains decisions under the 2027-2029 schedule.
First Category drops to 23%: the schedule and what to model in 2026
The reform cuts the corporate tax of the general regime of article 14 letter A gradually, from 27% to a permanent 23% in 2029, and restores the full owner credit assigned by the year the profit is generated. SMEs under article 14 letter D keep their current rules. Before distributing, selling or reorganizing in 2026, the schedule is the variable to model.
The text was approved by the National Congress; one article remains in joint committee, along with Constitutional Court review and publication in the Official Gazette (as of July 22, 2026). This page walks through the rate schedule, the return of the full owner credit by year of generation, why the historical stock of profits does not improve by waiting, the return of non-taxable capital gains on listed shares from 2027, the credit for knowledge-based service exporters and, at the close, the practical consequence for decisions taken in 2026.
The schedule: from 27% to 23% in three steps
The cut is gradual, fixed by commercial year and applies only to the general regime.
The First Category rate of the general regime of article 14 letter A follows a fixed calendar: it stays at 27% for 2026 and then descends one step per year until reaching its new permanent level in 2029. Monthly provisional payments (PPM) adjust in parallel, so the cash-flow effect arrives with each step and not only at the annual return. Companies under the Pro Pyme regime of article 14 letter D keep their current rules unchanged.
27%
The current rate holds for commercial year 2026. Profits generated this year are still taxed and credited under the rules in force today.
25,5%
First step of the cut. PPM adjust in parallel from the same year.
24%
Second step. The rate keeps descending on the fixed calendar, independent of results.
23%
The new permanent rate of the general regime. From here the schedule ends and 23% becomes the steady state.
The rate is only half of the equation. The other half is what happens with the credit when the owners withdraw the profit.
The credit becomes full again, but by year of generation
What matters is the year the profit was generated, not the year it is withdrawn.
Today the owners of a general-regime company recover only 65% of the First Category tax as a credit against their final taxes. The reform restores the full credit, but in steps and with a rule that changes the planning logic: the credit is assigned by the year the profit is generated. Profits generated in 2027 carry a 70% credit, those of 2028 an 80% credit, and those generated from commercial year 2029 carry the full 100%. Withdrawing later does not upgrade the credit: a 2027 profit keeps its 70% even if it is distributed in 2030.
- Today: owners recover only 65% of the corporate tax as a credit.
- Profits generated in 2027: 70% credit, whenever they are withdrawn.
- Profits generated in 2028: 80% credit.
- Profits generated from 2029: 100% credit, the full amount.
- The governing year is the year of generation, not the year of withdrawal.
That rule invites a question that many boards will ask: does waiting also improve the profits the company already accumulated? The answer is no.
The historical stock does not improve by waiting
Profits accumulated through 2026 keep the current rules and are consumed first.
Profits accumulated through the close of 2026 keep the rules in force today, including the 65% credit recovery, even if they are withdrawn years later. The law also orders that this stock be consumed first, before the new full-credit profits. Waiting therefore improves future profits, not the stock. For the historical stock, the tool the reform offers is a different one: the single 10% substitute tax, covered in detail in the 10% substitute tax on accumulated profits.
New profits (2027 onwards)
Taxed at the descending rate of each year and credited by year of generation: 70% in 2027, 80% in 2028, 100% from 2029. Time works in their favor: each year of the schedule improves both the rate and the credit of what the company generates.
Historical stock (through 2026)
Keeps the current rules, with 65% credit recovery, no matter when it is withdrawn, and the law orders it consumed first. Waiting gains nothing. The available lever is the 8-month window of the 10% substitute tax, to be modeled against the ordinary withdrawal for each owner.
The schedule does not only move rates and credits. It also changes the tax treatment of a specific transaction: selling listed shares.
Capital gains on listed shares: non-taxable again from 2027
The timing of the sale becomes a tax decision.
From January 1, 2027, the capital gain on the sale of shares with stock-exchange presence leaves the current 10% single tax and becomes non-taxable income again. The practical effect is immediate: the same sale can bear a 10% tax if closed in 2026 and none if closed in 2027. For shareholders holding listed positions, the timing of the sale stops being a purely commercial call and becomes a tax decision that deserves its own modeling, alongside price, liquidity and market risk.
The package also carries a targeted incentive for a specific kind of company: exporters of knowledge-based services.
Credit for knowledge-based service exporters
A payroll-based credit proportional to export income, with per-worker caps.
Companies that export knowledge-based services gain a credit of 15% of the remunerations of their personnel in Chile, in proportion to their export income, capped at 75 UTM per worker per year. The rate rises to 20% for operations in regions or in rural municipalities of the Metropolitan Region. On top of that, from 2027 an additional credit of up to 150 UTM per worker, once per employment relationship, covers direct employer payments for catastrophic illnesses.
- Base credit: 15% of remunerations, proportional to export income, capped at 75 UTM per worker per year.
- Enhanced rate: 20% for operations in regions or rural municipalities of the Metropolitan Region.
- Additional credit: up to 150 UTM per worker, once per employment relationship, for catastrophic illnesses, from 2027.
With the pieces on the table, the closing question is what to do with the decisions already queued for 2026.
The practical consequence: model before deciding
The full calendar changes the outcome of decisions that look routine.
Before distributing dividends, selling stakes or reorganizing the group in 2026, the full calendar deserves a run through the numbers. The rate cut and the return of non-taxable listed gains reward waiting: a profit generated in 2029 carries a lower corporate rate and a full credit, and a listed sale closed in 2027 pays no tax on the gain. The historical stock, in contrast, gains nothing from waiting; its lever is the substitute-tax window. A decision that mixes both kinds of profit, or that anticipates a sale into 2026, can leave money on the table for no reason other than timing.
The questions below gather the doubts that come up most often when a company puts the schedule against its own numbers.
Frequently asked questions
The most common questions about the schedule and the owner credit.
When do corporate taxes go down in Chile?
Under the Reconstruction Law, the general-regime First Category tax steps down: 27% for 2026, 25.5% in 2027, 24% in 2028 and 23% as the permanent rate from 2029. Owners also gradually recover the full credit for profits generated under the new rules: 70% for 2027 profits, 80% for 2028 and 100% from 2029. SMEs under the Pro Pyme regime keep their own rate.
When does the Chilean corporate tax rate go down?
Gradually. The First Category rate for the general regime of article 14 letter A stays at 27% for 2026, drops to 25.5% in 2027, to 24% in 2028 and settles at a permanent 23% from 2029. Monthly provisional payments adjust in parallel on the same schedule. The law has not yet been published in the Official Gazette, but the schedule is fixed by commercial year in the text approved by Congress.
Does the cut apply to SMEs?
No. The 27% to 23% schedule applies only to the general regime of article 14 letter A. Companies under the Pro Pyme regime of article 14 letter D keep their current rules unchanged. For an SME, the relevant effects of the reform sit elsewhere in the package, not in the corporate rate.
Do I recover the full credit if I withdraw profits in 2029?
Only for profits generated from commercial year 2029 onwards. The credit is assigned by the year the profit is generated, not the year it is withdrawn: 70% for 2027 profits, 80% for 2028 profits and 100% from 2029. Withdrawing a 2027 profit later does not upgrade it to a full-credit profit; it keeps its 70%.
What happens to profits accumulated before the reform?
Profits accumulated through the close of 2026 keep the current rules, with recovery of only 65% of the credit, even if withdrawn years later. The law also orders that this stock be consumed first. Waiting does not improve it. For that historical stock the reform offers a different tool: the single 10% substitute tax, available for 8 months from publication of the law.
Should we postpone sales of shares with stock-exchange presence?
It is a variable to model before deciding. From January 1, 2027, capital gains on the sale of shares with stock-exchange presence leave the 10% single tax and become non-taxable income again. The same sale can pay 10% in 2026 and nothing in 2027, so the timing of the transaction becomes a tax decision, not only a commercial one. The answer depends on the case: price, liquidity and market risk also matter.
Official sources
- Bill 18.216-05, legislative record (Senate of Chile)
- Text approved by Congress: Chamber of Deputies official communications No. 21,252 and No. 21,412 and Senate official communication No. 245/SEC/26.
Run the schedule against your own numbers
Our tax compliance practice models the full calendar for the decisions queued for 2026: dividend timing, sales of stakes, listed positions and the treatment of the accumulated stock.
Learn about the tax compliance practiceInformative content, updated as of July 2026. It does not constitute legal advice for a specific case.
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