The law 20.780 of September 2014, related to the tax reform, establishes that the companies’ owners must pay over the total amount of profit of the period, not only over the amount withdraw or distribute, all this actions have the target of delete the Income Fund Ledger (FUT).

It should be said that the register “FUT” was created in the year 1984, when the Chilean companies didn’t have the capability to finance their investments; the finance system was in crisis, Chile was in arrears with the external debt, between other economic problems.

Meanwhile, because under the new tax system all the companies ‘earnings will tax immediately with the personal taxes that affect to the owners, the transition rules of the law under study establish a mechanism to delete the “FUT”, taxing the accumulated profits with a single tax and substitutive, finishing in this way the pending taxation.

At the end of the year 2014, the Internal Revenue Service issued the Circular N° 70 and the Resolution N° 128, who are in charge of impart instructions in respect with the substitutive tax over the accumulated incomes into the “FUT” till December 31st 2014, and the way to calculate, declare and pay the single tax and substitutive over the exceeded withdraws maintained until the same date.

Because of this, the contributors have the option to apply until December 31st 2015, the tax mentioned with a rate of 32% or with a variable depending to the situation, over the “FUT” balance or just a part of it, at 2014 closing.

Optional Regime and Transitory

This regime offers to the contributors the application of this tax into the company, which will be substitutive of the Global Complementary Tax (IGC) or Additional (IA) that will affect to the owners; members and shareholders at the moment of withdraw the respective incomes. In this way, at the payment of the tax with optional character, the company transforms the portion of “FUT” related to the tax free profits and when the owners withdraw these incomes, will not be affected to any Tax.

Tax Declaration and Payment

According to the commented above, the cited tax must be declared and paid by the company, until the closing of the year 2015 by the form N° 50, according to the instructions into the Resolution N° 128 issued by the regulatory entity. Also, the contributor must inform the final amount of profits that was voluntarily benefited to this regime into the tax declaration of the tax year 2016.

Finally, in respect with the tax profits that make up the taxable base of the commented tax, will not be considered withdrawn, distributed or paid, will be considered to deduct from the “FUT” and be noted as a profit non constituted as income in the register of Non-Income Fund Ledger (FUNT).