Tax Basics on NovaTax Blog

Amending tax returns: the R&D Law's retroactivity explained

Thu, 24 Sep 2026 00:00:00 +0000

One advantage of the notice of intent is that the R&D Law credit applies retroactively. But that retroactivity has a practical consequence: you may need to amend prior years’ tax returns.

Why you need to amend

With a notice of intent, a company can start spending before the project is certified. But the process is long:

Up to 18 months to submit the formal certification application.
Up to 180 calendar days for Corfo to certify.

By then, the company has already filed taxes for one or more years in which it incurred project costs, without being able to use the 35% credit yet.

What is a tax credit? And why it's worth more than a deductible expense

Sun, 13 Sep 2026 00:00:00 +0000

“Tax credit” comes up in every conversation about incentives, but it is rarely explained well. And the difference matters: one peso of tax credit is worth far more than one peso of deductible expense.

The simple definition

A tax credit is an amount subtracted directly from the tax you owe. It does not reduce the base used to calculate the tax; it reduces the tax itself, peso for peso.

A deductible expense, by contrast, is subtracted from income before the tax is calculated. Its real value depends on the rate: at a 27% rate, every $100 of deductible expense saves $27 of tax.

Unused R&D credit: what happens if your company has losses

Thu, 10 Sep 2026 00:00:00 +0000

The R&D Law credit equals 35% of certified spending and is offset against First Category (corporate) Tax. But what happens if the company doesn’t owe enough tax to offset it against? You’re left with unused credit (remanente).

When unused credit arises

According to SII Circular No. 19, there’s unused credit when First Category Tax doesn’t exist or is smaller than the credit. That can happen because:

The company has a tax loss that year.
The company is exempt from First Category Tax in that year.
The tax has already been covered by other credits the law allows to be applied before the R&D credit.

What happens to unused credit

The rule has two parts:

Public grants and the R&D Law: how to combine them without losing the benefit

Sun, 30 Aug 2026 00:00:00 +0000

Many companies doing R&D already receive public support: a grant from Corfo, ANID or another fund. A common question is whether they can also use the R&D Law. The answer is yes, but there are clear rules to avoid getting the benefit twice on the same spending.

The general rule: they’re complementary

According to Corfo’s FAQ, the tax incentive is complementary to existing public funding. You can certify a project in which part of the activities are funded by a grant.

Full accounting and actual income: the requirement many companies overlook

Wed, 19 Aug 2026 00:00:00 +0000

Many companies come to the R&D Law with a good project and find out too late that they don’t meet a prior requirement: their tax regime. Before designing anything, it’s worth checking.

The requirement

According to the law and Corfo’s FAQ, the benefit is open to individuals or legal entities subject to First Category Tax (Chile’s corporate income tax) that declare their actual income using full accounting, and that have a contract or project certified by Corfo.

What is the UTM, and why is Chile's R&D Law measured in it?

Sat, 08 Aug 2026 00:00:00 +0000

If you read about the R&D Law, you’ll see the acronym UTM in almost every requirement. Before doing any calculation, it helps to understand what it is and why it’s used.

What the UTM is

The Unidad Tributaria Mensual (UTM), or monthly tax unit, is a unit of account used in Chile to express tax amounts: fines, thresholds, caps and benefits. Its value in pesos changes every month, because it is adjusted for consumer price inflation (CPI).