Tax Measures for the Impact of Covid-19
President Sebastián Piñera, together with the Minister of Finance, Ignacio Briones, announced extraordinary economic measures to protect the health, income and work of Chilean families. The tax measures are detailed below:
• Suspension of monthly provisional payments (PPM) of corporate income tax for the next 3 months. This measure will allow 700 thousand companies to have more resources in cash flow. This means committing resources of up to US $ 2.4 billion in the next 3 months.
• Deferment of VAT payment for the next 3 months for all companies with sales below UF 350,000, which allows them to be paid in 12 monthly installments at a real interest rate of 0%. This will allow liquidity of up to US $ 1.5 billion to be injected into 240,000 companies during the second quarter.
• Postponement until July 2020 of the payment of income tax for SMEs in accordance with what they declare in the next income operation in April. This will mean releasing US $ 600 million in cash resources to 140,000 SMEs.
• Deferral of April tax payments for companies with sales of less than 350,000 UF and for people with properties with a tax assessment of less than $ 133 million. The payment of this fee is allowed at any time of the year, applying a real interest rate of 0%. This implies mobilizing resources for US $ 670 million dollars. The treasury will compensate for the lower transitory municipal income.
• Transitory reduction of stamp and stamp tax to 0% for all credit operations during the next 6 months. This will reduce the cost of financing for families and businesses. This measure has a fiscal cost of up to US $ 420 million.
• Measures for the treatment of tax debts with the General Treasury of the Republic focused on SMEs and people with lower incomes: i) flexibility to enter into tax debt payment agreements with the General Treasury of the Republic, without interest no fines; ii) temporary suspension of judicial collection actions and auctions of tax debts.
• All the expenses of the companies associated to face the health contingency will be accepted as fiscal expenses.