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Chile Update: Tax Measured Extended

The following measures were agreed as of Decree No. 1034, issued on July 3rd, 2020, which modified S.D. No. 420 of March 30th, 2020. 

  1. Extension: Suspension of Provisional Monthly Payments (PPM) to the quarter of July, August and September

The provisional monthly payments (PPM) of corporate income tax for the next 3 months are suspended, that is, taxes which would normally be paid in July, August and September.

Who does it apply to?

For all taxpayers whose tax bases of PPM has decreased at least 30% between January and May 2020, in comparison with the months of January to May 2019, regardless of the tax regime in which they are currently located or whether they are SMEs or large taxpayers. 

When does it apply?

Since the monthly declaration for June 2020, which is paid in July 2020.

What does it mean that it is a suspension?

It is important to clarify that this is a suspension and not a postponement, which means that these PPMs are not paid to the Treasury in the future, but will be paid with the yearly Income Tax return due in April 2021.

2. Extension: Postponement of the Value Added Tax = VAT that must be declared or paid on July, August and September

The postponement of VAT payments which are declared for the months of July, August, and September 2020 will be postponed. Companies can make payment in 6 or 12 monthly installments at 0% real interest rate and without any penalties. 

Who does it apply to

Taxpayers whose annual income is less or equal to 350.000 UF (approximately USD 12,5 MM), as long as they have had a 30% sales decrease for the quarter of April-June 2020, with respect to the same period in 2019. 

How will postponed VAT be paid?

The postponed VAT will start being paid in October 2020, as follows:

  • Within 12 monthly, equal and continuous installments, for SMEs, this is, those taxpayers subject to the ProSME regime of article 14 letter D) of the Income Tax law (micro, small and medium companies); or
  • Within 6 monthly, equal and continuous installments, for the rest of companies that are not considered SMEs, whose annual incomes do not exceed of 350.000 UF. 

For which VAT periods does the postponement apply?

It will be applied to the payment of VAT for the next 3 months, this is, VAT of June, July, and August 2020, which are respectively declared or paid in July, August, and September.

How should it be done?

It must be declared on Form 29, with the payment of VAT for the period is declared, in which the option ” postponement of VAT payment” must be marked. It must be also chosen at that time whether the payment will be made in 6 or 12 installments without interest and without any penalty. 

What does it mean to be a postponement?

It means that you must pay the tax authorities anyway, but within the applicable term, this is 6 or 12 installments.


The Chilean Government is taking steps to assist companies with cashflow by extending benefits that were granted a 3 months ago. These are small but practical steps that will valuable for companies who want to ensure that they have cashflow to help sustain them through these slower months.

The government is now voting on another stimulus package that will help companies not only save cashflow in the short term but set up the economy for a recovery. You can see our analysis here of these benefits.

Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Mexico, Peru, Ecuador, Brazil, and Argentina. Over the last 19 years, our team of English speaking Lawyers and Attorneys have been supporting foreign companies with their growth in Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets.