Chile plans to introduce a new tax regime ultimately benefiting Small and Medium Enterprises (SMEs)

1. Chilean Government Plans Tax Reforms for Small and Medium Enterprises
(SMEs)
(Bristol, UK) - Chile plans to introduce a new tax regime ultimately benefiting Small and Medium
Enterprises (SMEs). This aligns with the new president’s election campaign programme which proposed
a structural tax reform and measures for revenue generation for the country, reports Nair & Co.’s
International Tax Team.
The significant proposed tax reform provisions relating to SMEs include:
 SMEs that fall under article 14 ter of the Income tax law may benefit from:
 A deduction on annual investments (instant depreciation).
 A simple system of accounting.
 Filing tax returns – annually .
 The eligibility qualification criterion for businesses has expanded from annual sales of 5,000
monthly tax units (UTM) to no more than 14,500 UTM. The existing regime applies to VAT
taxable units.
 To help curtail SMEs’ cash flow problems, the buyer of forward purchases made by larger
companies to SMEs will be responsible for a portion of the VAT payment. Currently, the SMEs
are responsible for corresponding VAT payments due in the following month of the purchase.
However, the SMEs often do not receive payments from the buyers within 90-days.
SMEs operating in Chile may consider monitoring progress of the above proposals. These provisions are
expected to benefit SMEs from various tax angles which include easier administrative requirements and
reduced tax bills.
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