R&D Law on NovaTax Blog

Leveraging AI for innovation (and when your project can qualify as R&D)

Sun, 27 Sep 2026 00:00:00 +0000

Artificial intelligence has become the default tool for innovation. Many companies in Chile are building models, automating processes and launching AI-based products. A question we hear often is: can that qualify under the R&D Law?

The short answer: sometimes yes, sometimes no. It depends on whether your project uses AI or creates new knowledge with AI.

Using AI is not doing R&D

The R&D Law doesn’t reward adopting technology; it rewards generating knowledge. So it helps to separate two kinds of project:

SMEs and the R&D Law: real barriers and how to overcome them

Tue, 22 Sep 2026 00:00:00 +0000

The international evidence is clear: SMEs are the companies that respond most to R&D tax incentives. Yet in Chile they’re a minority among users of the R&D Law. Understanding why helps find the way in.

SMEs respond more to the incentive

A University of Chile study (Weber, 2022) pulls together the evidence:

SMEs react two to three times more than large companies to changes in the tax incentive.
According to the OECD, for every $1 of tax support, small companies generate $1.40 of additional R&D investment, medium-sized ones $1 and large ones $0.40.

The reason: SMEs find it harder to fund R&D, because they have less collateral, a shorter track record and fewer patents to show investors.

What is a Corfo R&D certificate and how do you get one?

Sun, 20 Sep 2026 00:00:00 +0000

To use the R&D Law benefit, doing research and development is not enough: the project or contract must be certified by Corfo. That certification, granted through a formal resolution, is what people usually call “the Corfo certificate”.

What is certification?

It is the process in which a company asks Corfo to verify that its project or contract meets the requirements of Law 20,241. If Corfo approves it, it issues a reasoned resolution that allows the company to apply the tax benefit to the R&D expenditure it actually incurs.

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.

Software development and the R&D Law: when your project qualifies

Mon, 24 Aug 2026 00:00:00 +0000

Many tech companies in Chile wonder whether their software development can qualify under the R&D Law. The answer is that the law expressly includes it, but with a condition that rules out most “ordinary” software.

What the law says

Within its definition of experimental development, Law 20,241 includes the development of software, as long as it:

produces greater knowledge aimed at systematically resolving a scientific or technological uncertainty, or
delivers a substantial, innovative improvement in a process, product or service.

In other words, writing new code isn’t enough. The code must be the means to solve a technical problem you didn’t know how to solve.

The R&D Law paradox: a generous incentive almost no one uses

Sun, 16 Aug 2026 00:00:00 +0000

There’s a paradox at the heart of the R&D Law: the benefit is generous, but very few companies use it. The data shows it clearly.

A country that invests little in R&D

According to OECD data compiled in a University of Chile study (Weber, 2022):

Indicator	Chile	OECD
R&D investment as % of GDP (2020)	0.34%	2.40%
Business share of R&D funding (2019)	31%	64%

Chile is among the OECD countries that invest least in R&D, and businesses fund a much smaller share than elsewhere in the organization.

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).