On Monday, July 1, 2024, Law No. 21,681 was published, creating the Temporary Emergency Fund for Fires and establishing other measures for reconstruction ( hereinafter "Law" ). Its purpose is to organize public efforts to cover reconstruction and recovery expenses in the Valparaíso Region affected by the February 2024 fires.

Title II of the Law establishes other measures for reconstruction, it provides an optional substitute tax regime for final taxes (ISFUT) with different modalities for companies under the general taxation regime and the SME Regime, with respect to the amounts they keep registered in their records of Income Subject to Final Taxes (Hereinafter , "RAI") as of December 31, 2023, which has the following characteristics:

Taxpayers subject to first-category tax on the basis of a full accounting balance sheet, subject to the regime of Article 14, letter A) of the Income Tax Law:

• Application of the ISFUT: The regime will apply to taxable profits accumulated in the Registry of Taxable Income ("RAI") as of December 31, 2023, less any distributions made during the year. This includes profits generated before 2017 and recorded in the STUT registry;

• Application of Rate: Profits will be subject to a 12% substitute tax with no right to credit. However, the first-category tax credit that would have been due on the amounts covered by the regime must be deducted from the credit register (SAC).

• Deadline in which you must exercise the option: the deadline to exercise the ISFUT option is until the last banking business day of January 2025, through a declaration and payment made to the Internal Revenue Service (" SII "), through the form that, for these purposes, the Internal Revenue Service establishes through a resolution.

• Effects of opting in: The tax paid and associated expenses must be deducted from the amount covered by the regime. Once the Substitute Tax has been declared and paid, the amounts covered must be recorded in the "REX" registry for exempt or tax-paid profits. The profits covered will not be subject to an attribution order when withdrawn, remitted, or distributed. Furthermore, additional tax will not be withheld for payments or remittances abroad.

Taxpayers subject to first-category tax on the basis of a balance sheet based on full accounting, subject to the regime of number 3 of letter D) of article 14 of the Income Tax Law:

• Application of the ISFUT: The regime will apply to taxable profits accumulated in the Registry of Taxable Income ("RAI") as of December 31, 2023, less any distributions made during the year. This includes profits generated before 2017 and recorded in the STUT registry;

• Application of Rate: Profits will be subject to a 30% substitute tax with the right to credit, capped by the accumulated credit balance maintained in the SAC Registry at the end of the 2023 fiscal year. The credit to which they will be entitled will increase the taxable base for the ISFUT.

• Deadline in which you must exercise the option: the deadline to exercise the ISFUT option is until the last banking business day of January 2025, through a declaration and payment made to the Internal Revenue Service (" SII "), through the form that, for these purposes, the Internal Revenue Service establishes through a resolution.

• Effects of opting in: The tax paid and associated expenses must be deducted from the amount covered by the regime. Once the Substitute Tax has been declared and paid, the amounts covered must be recorded in the "REX" registry for exempt or tax-paid profits. The profits covered will not be subject to an attribution order when withdrawn, remitted, or distributed. Furthermore, additional tax will not be withheld for payments or remittances abroad.

Write to us at contacto@taxaccount.cl to request advice.