BlogTax Basics What is the UTM, and why is Chile's R&D Law measured in it?
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).
Expressing amounts in UTM has an advantage: a law’s thresholds don’t lose value to inflation. A cap set in UTM ten years ago still represents roughly the same amount in real terms.
Alongside the UTM there is the UTA (Unidad Tributaria Anual), the annual tax unit, equal to 12 times the UTM of December of the relevant year.
The current UTM value is published on the SII (Chilean tax authority) website, under monthly indicators.
The R&D Law’s numbers, in UTM
| Item | Amount |
|---|---|
| Minimum project or contract cost | Over 100 UTM per participating company |
| Minimum contribution in joint projects | 100 UTM per company |
| Annual tax credit cap | 15,000 UTM per taxpayer |
| Certification fee | From 10 UTM up to 4% of total cost |
How to use it in practice
1. Convert with the right month’s UTM. The certification fee, for example, is calculated with the UTM of the month you submit the application. Other tax calculations may follow a different rule, so confirm which month applies before converting.
2. Leave a margin above the 100 UTM minimum. If your project is close to the threshold, a change in the UTM or a budget adjustment could push it below. Design the project with some headroom.
3. Plan around the 15,000 UTM cap if your investment is large. The cap applies to the 35% credit, not total spending, and limits what you can use each year. If your investment is very large, plan to spread execution over several tax years and check with your adviser how the cap applies in your case. (The cap is different from the unused credit that arises when your tax bill is smaller than the credit; we explain that in Unused credit.)
An illustrative example
Assume, purely as an example, a UTM of CLP $68,000:
- 100 UTM = $6,800,000. Your project must cost more than that.
- 15,000 UTM = $1,020,000,000 of maximum credit per year. Since the credit is 35% of spending, that cap is reached with certified spending of roughly $2.9 billion in a year.
Always use the actual value published by the SII for your calculations.
In short
- The UTM is a unit adjusted monthly for inflation.
- The R&D Law sets its minimum (100), cap (15,000) and fee (from 10) in UTM.
- Before applying, convert with the right month’s UTM and leave a margin.
This article is for information only and is not tax advice. Sources: Law 20,241, Certification Regulation (Supreme Decree 102/2012) and Corfo’s FAQ.