Chile’s Kast Signs Law Cutting Company Tax to 23%

La Moneda, the presidential palace in Santiago, file photo, 2013. (Photo: Miguel hernandez, CC BY-SA 2.0, via Wikimedia Commons)

CHILE · ECONOMY

Chile’s President José Antonio Kast signed a law on Friday, 9 October, cutting the company tax for large firms from 27% to 23% by 2029. The measure, known in Chile as the “megarreforma”, is meant to revive investment in the world’s top copper producer.

For US readers, it lowers the tax bill of Chilean companies listed in New York. It also offers foreign investors tax rules frozen for up to 20 years on large projects.

Kast Signs the Law After a Mudslide Delays the Ceremony

Interior Undersecretary Máximo Pavez announced the signing at the government’s weekly press briefing on Friday, Diario Financiero reported. The government’s official account on X wrote that the president “promulgó la ley de Reconstrucción Nacional”, meaning he formally enacted it.

Pavez called it “una muy buena noticia”, a very good piece of news, that would help “reimpulsar nuestra economía”, or relaunch the economy. He spoke “en medio de una emergencia”, in the middle of an emergency, as the Santiago region dealt with storm damage.

A public signing ceremony had been planned for Friday. The government cancelled it on Thursday after a mudslide hit the San Carlos de Apoquindo area of Las Condes, BioBioChile reported.

Kast, the founder of the conservative Republican Party, took office in March 2026. The Chamber of Deputies first passed the bill in May, and the Senate approved it in July.

Company Tax Falls to 23% by 2029

The headline measure is a gradual cut in Chile’s corporate income tax, known locally as the first-category tax. For large companies the rate falls to 25.5% in 2027, 24% in 2028 and 23% from 2029, according to the Senate.

The Senate approved that cut in July by 26 votes to 24, a sign of how divided Congress was. Congress gave the full bill final approval in August, after a joint committee of both chambers settled the last disputes.

A second measure targets big investors, letting projects worth US$50 million or more lock in their tax rules for 10 years. For projects above US$350 million, the period is 20 years.

The Chamber of Deputies says this “invariabilidad tributaria”, or tax stability, is open to “inversionistas locales o extranjeros”, local or foreign investors.

Finance Minister Jorge Quiroz greeted the August vote with “Chile vuelve a abrir las puertas a la inversión”, the Finance Ministry said. The phrase means Chile is reopening its doors to investment.

What Still Has to Happen Before It Takes Effect

Signing is not the final step. The decree is now with the Comptroller General’s Office, Chile’s independent public auditor, which must check that it is lawful before publication.

Only after that review will the law appear in the Diario Oficial, the official gazette, and the deadlines for each measure start to run. Diario Financiero said publication is expected in the coming days.

The text also had to pass Chile’s Constitutional Court, which reviews whether laws respect the constitution. The court cleared the law on 2 October after removing some provisions, BioBioChile reported.

The Comptroller General’s Office in Santiago, which must clear the decree before publication, file photo, 2023. (Photo: Carlos yo, CC BY-SA 4.0, via Wikimedia Commons)

What It Means for You

If you hold Chilean shares, a lower company tax rate means more profit left over for shareholders, all else equal. Several large Chilean firms trade in New York as American Depositary Receipts, or ADRs, including lithium producer SQM and Banco de Chile.

If your company is weighing a large project in Chile, the 10- to 20-year tax stability offer may change the maths. It gives investors a fixed tax framework across several Chilean governments.

The law includes a temporary exemption from value-added tax on new homes, according to the Chamber of Deputies. That matters if you plan to buy a newly built home in Chile.

Homeowners over 65 will also stop paying property tax on their main home, the Chamber of Deputies says. The Chamber’s summary does not say whether foreign residents qualify.

Nothing changes overnight for company tax. The first step down, to 25.5%, comes in 2027, and the full cut to 23% only from 2029.

What Is Not Known

The exact date of publication in the Diario Oficial has not been announced. The law has not yet been given its official number.

How fast investment will respond to the lower company tax is not yet clear. The narrow 26-to-24 Senate vote shows the cut remains politically contested.

It is not known how many investors will apply for the tax stability contracts, or for which projects. The Comptroller General has not said how long its review of the decree will take.

More: Chile news in English, every day from The Rio Times.

Frequently Asked Questions

What did Chile’s president sign on 9 October?

José Antonio Kast signed the decree enacting the National Reconstruction law, a package of tax cuts and pro-investment measures. Its centrepiece lowers the company tax for large firms from 27% to 23% by 2029.

When does the lower company tax start?

The rate falls to 25.5% in 2027, 24% in 2028 and 23% from 2029, according to the Senate. The law first has to be cleared by the Comptroller General and published in the official gazette.

Can US investors use the tax stability scheme?

Yes. The Chamber of Deputies says the scheme is open to local or foreign investors. Tax rules are fixed for 10 to 20 years on projects from US$50 million.

Why does this matter to Americans?

Chile is the world’s largest copper miner and several of its biggest companies trade in New York. A lower company tax raises their after-tax profits, all else equal, and the government says the law is meant to bring back investment.

Sources: Diario Financiero (DF TAX): Kast firma el decreto para promulgar la Ley de Reconstrucción, 9 October 2026; Senado de Chile: Proyecto de Reconstrucción Nacional avanza a su tercer trámite, 16 July 2026; Cámara de Diputados: Sala despachó esta semana proyecto de reconstrucción nacional, 22 May 2026; Ministerio de Hacienda: Ministro Quiroz sobre total aprobación y despacho a ley del Plan de Reconstrucción, 4 August 2026; BioBioChile: Aluvión en Las Condes obliga a suspender la promulgación de la Ley de Reconstrucción, 8 October 2026; US Geological Survey: Mineral Commodity Summaries 2026, Copper, 2026.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief