25 / 09 / 2020

The Official Gazette of the Republic of Chile recently published law number 21,256., in which it is established tax measures that are part of the Emergency Plan for Economic Reactivation and Employment in a Medium-Term Fiscal Convergence Framework. Among the initiatives that are promulgated, there is an unprecedented system of instantaneous amortization regarding certain intangible assets that are protected in accordance with the law, such as industrial property rights, copyrights and new plant varieties.

With respect to the original project, the law establishes a greater supervision in the matter of depreciation of this type of assets. In this sense, it points out that the Internal Revenue Service (SII) may review the values that correspond to the operations that benefit from the provisions of this article. In addition, SII must annually examine the expense for amortization of intangibles in the event that such disbursement corresponds to an amount greater than 30 percent of the taxpayer’s net taxable income.

For the lawyer Max Villaseca, partner of Estudio Villaseca Abogados, this implies a tangible proof that intellectual and industrial property assets can become an effective instrument for promoting investments within the framework of economic reactivation.

The reduction to half of first category taxes to SMEs, the refund of the VAT tax credit accumulated by SMEs between January and May 2020 or the payment by the Treasury of the contribution of 1% of the investment projects that are submitted to Environmental impact assessment until December 31, 2021 are other tax measures included in the bill presented by the Treasury.

After an arduous debate in the Mixed Commission, the Executive’s proposal for this law was maintained, with some improvements, such as the increase in the temporary reduction of the first category tax for SMEs; the postponement of the entry into force of the electronic ballot from September 1 to January 1, 2021; the extension of the term that companies have to pay their VAT to three months; or the incorporation of benefits for micro-entrepreneurs and drivers of paid passenger transport are some other tax measures included in this law for the economic reactivation of Chile in the face of the coronavirus crisis.