On 29 September 2014, Law 20,780 was published in the Official Gazette. The law provides for a structural reform to the tax system of the country with different effective dates over a 4-year period. The law provides, among others, a new income tax regime, which is considered the most relevant tax reform of the last 30 years.
The income tax rate will be increased over a 4-year term. With effect from 1 January 2016, the corporate income tax will be increased from the rate of 22.5% to 24%. Further, the tax will be increased to 25% with effect from 2017 and onwards.
Accordingly, all income derived or accrued by an enterprise in 2016 will be subject to business income tax at the rate of 24% and non-residents will be subject to tax on such income, at the time of its distribution, at the rate of 35% with a credit for the business income tax paid.