G/SCM/N/401/CHL   
30 June 2023  
(23-4452) Page: 1/9 
Committee on Subsidies and  
Countervailing Measures  Original: Spanish  
 
  
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1  
OF THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT  
ON SUBSIDIES AND COUNTERVAILING MEASURES  
CHILE 
The following communication, dated and received on 29 June 2023, is being circulated at the request 
of the delegation of Chile.  
 
_______________  
 
 
TABLE OF CONTENTS  
I. TAX CREDIT FOR INVESTMENT IN THE PROVINCES OF ARICA AND PARINACOTA  ........  2 
II. TAX CREDIT FOR INVESTMENT IN THE REGIONS OF AYSÉN AND MAGALLANES AND IN 
THE PROVINCE OF PALENA IN THE LOS LAGOS REGION  ................................ ..................  3 
III. EXEMPTION FROM FIRST -CATEGORY TAX UNDER THE INCOME TAX LAW ON FISCAL 
YEAR PROFITS OF MANAGEMENT COMPANIES AND USERS IN THE FREE ZONES IN THE 
CITIES OF IQUIQ UE AND PUNTA ARENAS AND A CREDIT FOR THE TAX -PAYING OWNERS, 
CO-OWNERS, PARTNERS OR SHAREHOLDERS OF A COMPANY OR USER BENEFITING 
FROM THE EXEMPTION IN AN AMOUNT EQUAL TO 50% OF THE TAX THE COMPANY OR 
USER WOULD HAVE BEEN REQUIRED TO PAY HAD THERE BEEN NO EX EMPTION  .............  4 
IV. FUND FOR THE PROMOTION AND DEVELOPMENT OF REMOTE AREAS  .........................  6 
V. NATIONAL INSTITUTE FOR THE SUSTAINABLE DEVELOPMENT OF SMALL -SCALE 
FISHERIES AND AQUACULTURE  ................................ ................................ .......................  7 
 
 
  G/SCM/N/401/CHL  
 
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  I. TAX CREDIT FOR INVESTMENT IN THE PROVINCES OF ARICA AND PARINACOTA  
1. Title  
Tax Credit for Investment in the Provinces of Arica and Parinacota  
2. Period  
June 2021 -June 2022  
3. Objectives  
To reverse the declining economy of the provinces of Arica and Par inacota by making use of their 
advantageous geographical position for trade purposes and their tourist attractions, by 
strengthening entrepreneurship and by consolidating Arica as an inter -ocean corridor . 
4. Background and authority  
Background: Arica and P arinacota, as remote provinces, are at a disadvantage in relation to the 
development of the rest of the country.  
Authority: Law No. 19.420, published in the Official Journal of 23 October 1995, amended by Laws 
No. 19.478 (Official Journal of 24 October 199 6), No. 19.669 (Official Journal of 5 May 2000) and 
No. 20.780 (Official Journal of 29 September 2014). Decree having Force of Law (DFL) No. 1 of the 
Ministry of Finance, published in the Official Journal of 11 September 2001, contains the revised, 
coordin ated and consolidated text of Law No. 19.420. The latest amendment to this Law was by 
means of Law No. 21.210 of 24 February 2020.  
5. Form of the subsidy  
Tax credit in the form of a tax allowance  
6. To whom and how the subsidy is provided  
The subsidy is fo r taxpayers who invest in the Arica and Parinacota region for the production of 
goods or the provision of services in the region. Such investments must be made during the indicated 
periods and amount to more than 500 UTM (CLP 31,537,000, equivalent to USD  39,228)1, under the 
conditions established by the Law.  
The period of eligibility is up to 31 December of each year.  
The beneficiaries are entitled to a tax credit of 30% of the value of certain non -convertible assets, 
namely buildings, machinery and equi pment, including immovable property that is intended 
primarily for commercial exploitation for tourist purposes, directly related to the production of goods 
or the supply of services of the taxpayer's business or activity, and purchased new or finished in the 
financial year.  
For investment operations carried out in Parinacota, the tax credit is 40%. The same percentage is 
applied to investments made in Arica in immovable property intended primarily for commercial 
exploitation for tourist purposes and identi fied as being of particular interest by the Director of the 
National Tourism Service.  
Taxpayers are also eligible for this credit if they have invested in the construction of buildings 
completed or built during the financial year for use as offices or dwel lings – whether or not they 
include business premises, car parks or warehouses – located in areas that currently make up the 
 
1 Unidad Tributaria Mensual , UTM (monthly tax unit), May 2023: CLP  63,074. Source: Central Bank. Value 
of US dollar observed on 31 May 2023: CLP  803.94. Source: Central Bank.  G/SCM/N/401/CHL  
 
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  perimeter of the city of Arica and areas classed as sites of interest for tourists by the 
National  Tourism Service.  
The taxes are forgiven by deducting the credit from the first -category tax payable as from the trading 
year of the purchase or construction of the property.  
7. Amount of the subsidy  
There is no current update of the estimated impact of this tax credit on tax revenue . 
8. Duration  
This incentive became effective, retroactively, as from 1 January 1995. The period of eligibility is up 
to 31 December 2035.  
The benefit will apply only in regard to assets incorporated in the investment project on any of the 
above -mentioned dates on which the benefit is still effective, although the credit may be recovered 
up to the year 2055.  
9. Statistical data  
No data available.  
II TAX CREDIT FOR INVESTMENT IN THE REGIONS OF AYSÉN AND MAGALLANES AND IN 
THE PROVINCE OF PALENA IN THE LOS LAG OS REGION  
1. Title  
Tax credit for investment in the regions of Aysén and Magallanes and in the province of Palena in 
the Los Lagos region.  
2. Period  
June 2021 -June 2022  
3. Objectives  
To boost economic development and the full physical integration of the Ay sén and Magallanes regions 
and the province of Palena in the Los Lagos region, given that they are geographically isolated and 
poorly connected and integrated with the rest of Chile  
4. Background and authority  
Background: As remote areas, the regions of A ysén and Magallanes and the province of Palena are 
at a disadvantage in relation to the development of the rest of the country.  
Authority: Law No. 19 .606, published in the Official Journal of 14 April 1999, amended by Laws 
Nos. 19.946 (Official Journal of 11 May 2004) and 20.655 (Official Journal of 1 February 2013). The 
latest amendment to this Law was by means of Law No. 21.210 of 24 February 2020.  
5. Form of the subsidy  
Tax credit in the form of a tax allowance  
6. To whom and how the subsidy is provided  
The subsidy is for taxpayers who invest in the regions of Aysén and Magallanes and the province of 
Palena in the Los Lagos region for the production of goods or the provision of services in those areas. G/SCM/N/401/CHL  
 
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  Such investments must be made during the indicated pe riods and amount to more than 500 UTM 
(CLP 31,537,000, equivalent to USD 39,228)2, under the conditions established by the Law.  
The period of eligibility is up to 31 December of each year.  
The beneficiaries are entitled to a tax credit of between 10% and 32% of the value of certain non -
convertible assets, namely buildings, machinery and equipment, including immovable property that 
is intended primarily for commercial exploitation for tourist purposes, directly related to the 
production of goods or the supply of services of the taxpayer's business or activity, and purchased 
new or finished in the financial year. However, the maximum credit per taxpayer is 80,000 UTM.  
Taxpayers are also eligible for a tax credit if they invest in the following physical as sets: (a) new 
vessels and aircraft, and in some cases reconditioned vessels and aircraft imported from abroad and 
not previously registered in Chile, destined exclusively for scheduled or tourist services carrying 
freight, passengers or tourists in legally  designated areas that include the province of Palena, the 
Aysén region or the Magallanes region and (b) tugs and launches, whether new or reconditioned, 
where they comply with legal requirements and are destined to provide services to vessels in the 
aforementioned areas.  
Taxpayers are also eligible for this credit if they invest in the construction of buildings to be 
used for productive activities, educational services, health services, storage services, offices, 
dwellings – whether or not they include business premises – car parks or warehouses.  
The taxes are forgiven by deducting the credit from the first -category tax payable as from the trading 
year of the purchase or construction of the property.  
7. Amount of the subsidy  
There is no current update of the estimated impa ct of this tax credit on tax revenue.  
8. Duration  
This incentive became effective, retroactively, as from 1 January 1999. The period of eligibility is up 
to 31 December 2035.  
The benefit will apply only in regard to assets incorporated in the investment pr oject on any of the 
above -mentioned dates on which the benefit is still effective, although the credit may be recovered 
up to the year 2055.  
9. Statistical data  
No data available.  
III. EXEMPTION FROM FIRST -CATEGORY TAX UNDER THE INCOME TAX LAW ON FISCAL 
YEAR PROFITS OF MANAGEMENT COMPANIES AND USERS IN THE FREE ZONES IN THE 
CITIES OF IQUIQUE AND PUNTA ARENAS AND A CREDIT FOR THE TAX -PAYING OWNERS, 
CO-OWNERS, PARTNERS OR SHAREHOLDERS OF A COMPANY OR USER BENEFITING FROM 
THE EXEMPTION IN AN AMOUNT EQUAL TO 50 % OF THE TAX THE COMPANY OR USER 
WOULD HAVE BEEN REQUIRED TO PAY HAD THERE BEEN NO EXEMPTION  
1. Title  
Exemption from First -Category Tax under the Income Tax Law on Fiscal -Year Profits of Management 
Companies and Users in the Free Zones in the Cities of Iqu ique and Punta Arenas. A benefit is also 
considered for owners of the aforementioned enterprises under the optional tax transparency system 
for micro, small and medium -sized enterprises contained in Article 14(D), subparagraph 8, of the 
 
2 Unidad Tributaria Mensual , UTM (monthly tax unit), May 2023: CLP  63,074. Source: Central Bank. Value 
of US dollar observed on 31 May 2023: CLP  803.94. Source: Central Bank.  G/SCM/N/401/CHL  
 
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  Income Tax Law cons isting of a credit against its final taxes equivalent to 50% of the credit to which 
the enterprise would have been eligible on its First Category Tax.  
2. Period  
June 2021 -June 2022  
3. Objectives  
To stimulate the economic development of the Arica and Parina cota region and the Magallanes region 
so as to form an attractive area for investment, economic activity, settlement, growth and 
sovereignty.  
4. Background and authority  
These areas, because of their location and geographical features, are at a disadvantag e in relation 
to the development of the rest of the country.  
The legal authority is contained in Ministry of Finance Decree No. 341, published in the Official 
Journal of 8 June 1977, the revised, coordinated and consolidated text of which is set forth in D ecree 
having Force of Law No. 2 of the Ministry of Finance, published in the Official Journal 
of 10 August  2001. This legislation was last amended by Laws No. 20.780, No. 20.899, No. 20.997 
and No. 21.210.  
5. Form of the subsidy  
Enterprises in eligible fre e zones are exempted from First Category Tax.  
Owners of benefiting enterprises operating under the optional tax transparency system for micro, 
small and medium -sized companies, as set out in Article 14(D), subparagraph 8, of the Income Tax 
Law, receive a tax credit on their final taxes that is equal to 50% of the tax credit to which the 
enterprise would have been entitled for First Category Tax.  
The Income Tax Law establishes an integrated system for First Category Tax (for companies) and 
final taxes paid by owners (Complementary Global Tax3 or Additional Tax4, depending on where the 
enterprise owners are resident or domiciled). Accordingly, the owners are entitled to a total or partial 
discount on the enterprise's First Category Tax, which they can apply to their personal taxes.  
Law No. 21.210 incorporated Article 14(D), subparagraph 8, into the Income Tax Law, thus 
introducing an optional tax transparency system for small and medium -sized enterprises owned by 
persons who pay final tax. Enterprises r egistering for the system are released from the obligation to 
pay First Category Tax and the owners directly pay final taxes on the enterprise's profits.  
In line with the above, the 50% tax credit benefits persons who own an enterprise that is exempt 
from First Category Tax under Decree -Law No. 341 of 1977 and who have registered under the tax 
transparency system. For these purposes alone, the aforementioned enterprises shall be understood 
to be subject to the First Category Tax.  
6. To whom and how the  subsidy is provided  
Management companies and users (all legal persons) in the Iquique and Punta Arenas free zones 
are exempt from First Category Tax. They must meet the requirements established by the Ministry 
of Finance and the Ministry of the Economy, D evelopment and Reconstruction under contracts 
containing conditions freely agreed on with the interested party. The exemption also applies to 
manufacturing companies already established or being established in Arica and manufacturing 
companies in the Alto Hospicio district in Iquique.  
 
3 Applicable to natural persons domiciled or residing in Chile.  
4 Applicable to persons not domiciled or residing in Chile.  G/SCM/N/401/CHL  
 
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  The credit indicated in the previous sections is granted to the owners of benefiting enterprises 
operating under the optional tax transparency system for micro, small and medium -sized 
enterprises, as set out in Article 14(D), subparagraph 8, of the Income Tax Law.  
7. Amount of the subsidy  
There are no official calculations of tax revenue forgone.  
8. Duration  
This incentive took effect on 25 June 1975 for Iquique and Punta Arenas and on 10  December  1976 
for Arica. In both cases it is of indefinite duration.  
9. Statistical data  
No statistical calculation has been made to assess the trade effects of the subsidy.  
IV FUND FOR THE PROMOTION AND DEVELOPMENT OF REMOTE AREAS  
1. Title  
Fund for the Promotion and Development of Remote Areas  
2. Period  
June 2021 -June 2022  
3. Objectives  
To contribute to the development of the disadvantaged regions of Arica and Parinacota, Tarapacá, 
Aysén del General Carlos Ibáñez del Campo and Magallanes and Chilean Antarctica and the provinces 
of Chiloé and Pa lena in the Los Lagos region, by providing assistance to small and medium -sized 
investors wishing to invest or reinvest in production in these remote regions.  
4. Background and authority  
Background: Being remote regions and provinces, these areas are at a disadvantage in relation to 
the development of the rest of the country.  
Authority: This fund was created by virtue of Articles 38 and 39 of Decree -Law No. 3.529 of the 
Ministry of Finance, published in the Official Journal of 6 December 1980. Decree having  Force of 
Law No. 15 of the Ministry of Finance, published in the Official Journal of 20 April 1981, lays down 
the terms and conditions of this fund.  
5. Form of the subsidy  
Direct transfer  
6. To whom and how the subsidy is provided  
Funds may be granted onl y to investments by small and medium -sized investors producing goods 
and services in the construction, machinery, equipment, special animal feed and small -scale fishing 
sectors. The annual amount of individual investment or reinvestment must not exceed UF 50.000 
(Chilean inflation -indexed monetary units), equivalent to USD 2,241,019.5 Funds granted under this 
programme may not be accepted together with any other benefit granted by the Government of 
Chile for the same goods or services.  
 
5 Unidades de Fomento , UF (Chilean inflation -indexed monetary un its), at 31 May 2023: CLP 36,032.89. 
Source: Central Bank. Value of US dollar observed on 31 May 2023: CLP  803.94. Source: Central Bank.  G/SCM/N/401/CHL  
 
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  This fund contributes 20% of the cost of the investment or reinvestment, from 2012 to 2035 
inclusive. The benefit is renewed from year to year under the Budget Law.  
7. Amount of the subsidy  
For 2023, the Budget Law estimated the maximum amount to be paid out at CLP 3,488,816,000, 
equivalent to USD 4,364,184.  
8. Duration  
The benefit is renewed from year to year under the Budget Law.  
9. Statistical data  
No data available.  
V. NATIONAL INSTITUTE FOR THE SUSTAINABLE DEVELOPMENT OF SMALL -SCALE 
FISHERIES AND AQUACULTURE  
1. Title 
National Institute for the Sustainable Development of Small -Scale Fishing and Aquaculture 
(INDESPA)  
2. Period  
January 2021 -December 2021  
3. Objectives  
To encourage and promote the development of the small -scale fishing and aquaculture sector by 
coordinating forms of inter -agency cooperation and by providing technical support to the sector and 
to those who benefit from the sector in order to strengthen productive capacities in a way that helps 
small -scale fishing ports and related sectors to develop t heir natural, cultural and economic heritage 
in a harmonious and comprehensive manner.  
4. Background and authority  
INDESPA is a public service created through Law No. 21.069 of 15 February 2018 and operating 
since 12 August 2018, under the auspices of the Ministry of the Economy, Development and Tourism.  
The organization's strategic objectives are to:  
(1) Facilitate access for small -scale fishers and fish farmers to project financing and 
development tools designed specifically according to the characteristics o f the target 
population.  
(2) Increase productive and commercial capacity in the small -scale fishing and aquaculture 
sectors through the implementation of development programmes and/or 
cooperation/transfer agreements.  
(3) Consolidate the operationalization of the I nstitute by designing and implementing the 
technical and administrative tools required for its optimal functioning at the national and 
regional levels.  
(4) Implement the decentralized bodies for consulting and ensuring the participation of  INDESPA 
users at the  sectoral and regional levels, in accordance with Law No. 21.069.  
Authority : 
https://www.leychile.cl/Navegar?idNorma=1115065  G/SCM/N/401/CHL  
 
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  5. Form of the subsidy  
INDESPA, under the auspices of the Ministry of the Economy, Development and Tourism, supports 
the sustainable development of small -scale fishing and aquaculture and those who benefit from the 
secto r. 
INDESPA finances initiatives to promote, develop and diversify sustainable productive activity in 
small -scale fisheries through a public tender system in which, as appropriate for each call for tenders, 
small -scale fishers and fish farmers and organizat ions representing them are invited to submit 
proposals.  
It is also working with regional governments to implement a series of projects to strengthen 
small -scale fishing in each region.  
Since August 2019, INDESPA has been responsible for managing the resou rces previously disbursed 
through the FFPA and FAP and subsequently implementing programmes developed and approved by 
the presiding Executive Board.6 
6. To whom and how the subsidy is provided  
Small -scale fishers and fish farmers and organizations that re present them that are legally 
established in Chile and submit proposals  
7. Amount of the subsidy by funding area  
(annual nominal amount in CLP)  
 
Table 1: Distribution of INDESPA expenditure by programme  
 
Expenditure 2021  % 
Artisanal and small-scale fishing production boosting programmes7 10,127,043,328  92.7%  
Seaweed farming subsidy programme8 794,339,000  7.3%  
Total expenditure under the 2021 Budget Law  10,921,382,328  100%  
 
Table 2: Distribution of INDESPA  expenditure by strategic investment area  
Strategic investment area  Expenditure 2021  % 
expenditure  No. of projects  
Modernization, efficiency and fleet safety  3,107,770,599  28% 2,131 
Small -scale aquaculture and management  2,537,771,756  23% 529 
Marketing and channels of distribution  652,953,662  6% 27 
Individual and associative ventures  1,885,394,734  17% 1,295 
Health management and value added  116,707,054  1% 6 
Uptake of renewable energy  692,807,462  6% 19 
Development of processes in coves  1,927,977,061  18% 162 
Total expenditure under the 2021 Budget Law  10,921,382,328  100%  4,169 
 
 
6 INDESPA has an Executive Board chaired by the Undersecretariat for Fisheries and Aquaculture and 
comprising the Econo my and Small Business Undersecretary, the Social Welfare Undersecretary, the National 
Director of Ports' Works and the National Director of the National Fisheries and Aquaculture Service.  
7 Programmes fully created by INDESPA, approved by its Executive Boa rd and evaluated ex ante by the 
Directorate of Budget . 
8 While an INDESPA programme, it is governed by a special law (Law No. 20.925) and is therefore assigned 
a separate budget.  G/SCM/N/401/CHL  
 
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  8. Duration  
Indefinite. The subsidy is determined and provided on a fiscal year basis.  
9. Statistical data  
Table 3: Distribution of INDESPA  expenditure by strategic investment area  
Strategic investment area  Total 
beneficiaries   Total men  Total 
women  No. of 
projects  
Modernization, efficiency and fleet safety  2,823 9% 1,729 1,094 2,131 
Small -scale aquaculture and management  5,062 16% 4,203 859 529 
Marketing and channels of distribution  1,610 5% 1,383 227 27 
Individual and associative ventures  12,473 40% 9,376 3,097 1,295 
Health management and value added  207 1% 187 20 6 
Uptake of renewable energy  606 2% 564 42 19 
Development of processes in coves  8,098 26% 6,880 1,218 162 
Total expenditure under the 2021 
Budget Law  30,879 100%  24,322 6,557 4,169 
 100%    79%  21%   
 
Table 4: Distribution of INDESPA expenditure by region  
REGION  Expenditure 2021  
(In 2021 CLP)  % Total 
beneficiaries  % 
benef.  Total 
men Total 
women  Total 
projects  
ARICA  139,482,039  1.3%  241 0.8%  200 41 45 
TARAPACA  454,668,767  4.2%  759 2.5%  615 144 59 
ANTOFAGASTA  555,941,108  5.1%  1,838 6.0%  1,626 212 98 
ATACAMA  782,288,513  7.2%  1,183 3.8%  1,024 159 80 
COQUIMBO  846,335,007  7.7%  4,758 15.4%  4,361 397 242 
VALPARAÍSO  1,599,584,062  14.6%  2,813 9.1%  2,707 106 456 
OHIGGINS  47,655,288  0.4%  161 0.5%  73 88 78 
MAULE  257,248,233  2.4%  1,581 5.1%  1,213 368 188 
ÑUBLE  20,936,605  0.2%  146 0.5%  90 56 16 
BIOBIO  1,108,118,808  10.1%  5,661 18.3%  3,869 1,792 677 
ARAUCANÍA  622,529,207  5.7%  1,741 5.6%  1,496 245 96 
LOS RÍOS  193,837,015  1.8%  570 1.8%  445 125 74 
LOS LAGOS  3,681,809,447  33.7%  8,727 28.3%  6,057 2,670 1,656 
AYSÉN  167,329,500  1.5%  237 0.8%  149 88 93 
MAGALLANES  443,618,729  4.1%  463 1.5%  397 66 311 
Total 
expenditure 
under the 2021 
Budget Law  10,921,382,328  100.0%  30,879 100%  24,322 6,557 4,169 
   
   79%  21%   
 
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