On 21 October 2026, Law No. 21.678 entered into force, establishing a Unique Substitute Tax (Impuesto Único Sustitutivo – IUS) for accumulated taxable earnings pending taxation as of 31 December 2025. The regime allows companies to settle historical tax liabilities on retained earnings at a flat 15% rate, replacing the progressive First Category Tax and Additional Tax regime. The election must be made in the 2027 Income Tax Return (Operación Renta 2027) and is irrevocable. This measure aims to simplify taxation of retained profits and encourage formalization of corporate equity.
Key Takeaways
- Flat 15% Rate: The IUS applies a single 15% rate on the taxable base of accumulated earnings, significantly lower than the combined corporate and shareholder tax burden under the standard regime.
- One-Time Election: Companies must opt-in via the 2027 tax return; the election covers all accumulated earnings up to 31 December 2025 and cannot be reversed.
- Impact on Dividends: Earnings subjected to IUS can be distributed as dividends without further First Category Tax or Additional Tax, providing certainty for future profit distributions.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement