There are a few laws that regulate the tax incentives for the Punta Arenas Region. This article only addresses those tax incentives, that are applicable for a legal entity providing services in the Punta Arenas Region.
I.- Importation of goods
The importation of goods is levied a tax in amount of 2.8%. This amount paid can be used as a credit when the goods are taken outside the Region and the 1,7% can be used as credit for the VAT payments.
II.- Hiring local work force
Until 2025 companies will receive a bonus from the State in amount of 17% of the workers' salary. This amount should not exceed $182,000 for each worker's salary. The workers should live and work in the Punta Arenas Region and the salary should exceed at least 20% the minimum salary, but should not be higher than 60 UF (approx. $1,320,000)
III.- Tax credit for corporate tax
Companies rendering services in the Punta Arena's Region shall have a tax credit on the chattels belonging to the fix assets of the company, including equipment, machinery and/or buildings.
If the price of the chattels is no more than 200,000 UTM (approx. $8,000,000,000) then the credit is 32%. Between 200,000 and 2,500,000 UTM is 15% and higher is 10%. Also the monthly provisional tax payment can be suspended, if they exceed the amount of the tax paid last year.
To be able to use these benefits the company must summit to the Chilean IRS a technical description of the investment project, explaining the dates the project will start and finish, goods that will be acquired and the total amount of the investment. The investment project must be at least 500 UTM (about $20,000,000). They must also summit a plan with their salaries, qualification and social security policies towards their employees.
If the equipment or machinery is taken outside the Region, then the credits must be paid back, unless the equipment is send for repair.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.