Below is a summary of the most relevant matters included in the tax bill:

• Proposals regarding individuals
  
  The highest Income Tax rate increases from 39% to 41%.
  
  Deduction for a single dependent may only be claimed by one taxpayer.
  
  The 1% deduction for purchases supported by electronic invoice and electronic documents would increase to 5% for FY 2025, 3% for FY 2026, and 1% for subsequent years. The deduction would be limited to 240 Tax Units per Fiscal Year.
  
  Amounts received as compensatory damages would not be taxable income if: (i) there is a judicial ruling, and (ii) payment is directly made to victim or its heirs. 
   
• Proposals regarding legal entities
  
  General corporate income tax rate of 35% is replaced by marginal rates between 27% and 34%, according to the taxpayer’s taxable income. Financial institutions are subject to these new rates and also to a 5 point surcharge until 2027.
  
  Domestic companies, permanent establishments and foreign legal entities engaged in the extraction of hard coal (ISIC 0510), lignite coal (ISIC 0520) or crude oil (ISIC 0610) will be subject to a 35% income tax rate, plus additional points.
  
  For minimum tax purposes, the Adjusted Tax Rate (“ATR”) increases from 15% to 20%. Additionally, the ATR shall be assed as a business group by taxpayers compelled to consolidate and combine financial statements. 
   
• Withholding tax
  
  Maximum withholding tax rate for labor payments increases from 39% to 41%. Procedure to assess labor payments withholdings is simplified, eliminating procedure two. 
   
• Presumptive interests 
  
  Presumptive interest rate for loans between legal entities and their shareholders is doubled (from Fixed-Term Deposit to Fixed-Term Deposit x 2). Loans granted by and to permanent establishments would also produce presumptive interest.
   
• Régimen SIMPLE (Simplified Taxation Regime)
  
  As of January 1, 2026, the Simple Tax Regime will be repealed.
  
  Be advised that according to the bill’s statement of purpose the regimen would be repeal as of January 2025. 
   
• Wealth Tax
  
  Legal entities and foreign permanent establishments are included as liable to the Wealth Tax in respect of their non-productive real fixed assets. The applicable tax rate will be 1.5% on the taxable base (no minimum threshold). 
  
  For individuals and foreign entities, the amount of equity subject to the Wealth Tax would be reduced from 72,000 Tax Units to 40,000 Tax Units. Tax rates and brackets would be adjusted between 0% and 2%.
   
• Long-Term Capital Gains Tax
  
  Long-term capital gains tax rate increases from 15% to 20%.
  
  Be advised that the titles of the amended articles refer to the sale of fixed assets held for more than two years. 
  
  Capital gains tax rate for lotteries, raffles, bets and similar increases from 20% to 25%.
   
• VAT 
  
  Gambling services rendered through internet will be taxed at 19% general VAT rate.
  
  Hotel services provided in municipalities with a population of less than 200,000 people are VAT excluded.
  
  Hybrid and plug-in hybrid vehicles would be taxed at the general 19% rate (increased from a current 5%).
   
• Non-Conventional Energy Sources (“FNCE” for its acronym in Spanish)
  
  Investors may issue transition energy bonds granting the right to deduct 50% of the investment made for income tax purposes. These bonds will be transferable.
  
  VAT excluded goods and services related to FNCE projects would become zero-rated (exempt).
   
• Carbon Tax
  
  Carbon tax will be applied uniformly to gas, coal, and petroleum derivatives. Tax rate increases and adjusts each January 1st based on Tax Unit of the previous year plus one percentage until it reaches the equivalent of 3 Tax Units per ton of carbon equivalent.
   
• Tax procedures
  
  The tax bill introduces incentives for individuals who report irregular actions and provide sufficient evidence to prove omissions, tax abusive structures and undue tax assessments.
  
  Penalties and procedures of fictitious suppliers are extended to shareholders, administrators and in general, final beneficiaries of the taxpayer being audited for these concepts.  
  
  Penalties for taxpayers in breach of electronic invoices regime are reduced based on number and amount of operations carried out.
   
• Deletions 
  
  Procedure 2 for assessment of withholding taxes on labor payments is repealed. 
  
  The special procedure set forth for tax abuse in tax matters is repealed. 
  
  The tax audit benefit that reduced statute of limitations to 6 or 12 months for income tax returns is repealed. 
   
• Others
  
  The Tax Office may add as taxable income the difference between the net worth of preceding FY and the one assessed by it in a tax audit. 
  
  Fondo Nacional del Ahorro may grant credits for improvement of real estate without a guarantee. This measure aims to provide access to credit to vulnerable population. 
  
  For the FY 2025, the Government may classify as public debt the amounts owed by users of the domiciliary public service of electric energy of low-income individuals to electric energy distribution and/or commercialization companies. 

If you have any questions regarding the scope and application of the particular issue, please do not hesitate to contact us.