LAW NO. 20,316 AMENDS LAW NO. 19,885, IN RESPECT OF DONATIONS WITH TAX BENEFITS Having present that the National Congress has given its approval to the following Bill: " Article 1.-Enter into Law No. 19,885, the The following amendments: (1) Replace the heading below: "ENCOURAGE AND RULE THE GOOD USE OF DONATIONS THAT GIVE RISE TO TAX BENEFITS AND EXTEND THEM TO OTHER SOCIAL AND PUBLIC PURPOSES". 2) Replace the title of Title I, which follows: " Tax benefits for persons and entities who donate to institutions providing direct services to persons with limited resources or disabilities and the Joint Support Fund Social ". (3) Replaces, all the times that appear in the text, the words" disabled "and" disabled "by the expression" with disability ". 4) Replace, all the times that appears in the text, the word "fund", when it is relative to the Joint Fund of Social Support established in article 3 of this law, by the voice "Fund". (5) Substitute Article 1, by the following: " Article 1 °.-The taxpayers of the tax of First Category of the Law on Income Tax, contained in Article 1 of Decree Law No. 824 of 1974, which declare their effective income on the full accounting basis and which are not undertakings of the State or in which the State or its institutions participate, which make donations in money directly to institutions referred to in Article 2 or to the Fund provided for in Article 3, "the Fund", may deduct from the taxes indicated the credits that are indicated below; (i) in accordance with the procedures, requirements and conditions set out below: 1. Donations may not be made to institutions in whose directory the donor is involved. If the donor is a legal person, he/she will not be able to make donations to institutions in whose board members or directors or shareholders who hold 10% or more of the share capital participate. The Council laid down in Article 4 may exempt from this prohibition those persons who donate to institutions which demonstrate that they have carried out activities under this law for a period of not less than two years, and show that their work In favor of persons with limited resources or disabilities, it is not conditioned or directed to benefit candidates for positions of popular choice. 2.-They shall not be entitled to the tax credit referred to in this article, donations made by candidates for positions of popular choice to institutions that carry out their work in the territories where they have submitted their candidacies. six months before the date of registration of your application to the Electoral Service and up to six months after the election in question. Nor shall they be entitled to the tax credit established in this law for any donations made within the indicated period of time, whether they are made to institutions in whose directory these candidates participate or those made by them. donor legal persons in whose directories the candidates are involved. 3.-The total amount of donations that give entitlement to this benefit will be the one indicated in article 10 of this law. 4.-These donations will be released from the process of insinuation and will be exempted from the Tax on Inheritance and Grants established in Law No. 16,271. 5.-Donors must inform the Internal Revenue Service, the amount of donations, the address, the RUT and the identity of the recipient in the form and time limits specified by the Service. The information provided in compliance with this number shall be covered by the secrecy laid down in Article 35 of the Tax Code. The institutions and the Fund, as donors, must be aware that they have received the donation by means of a certificate that will be extended to the donor, in accordance with the specifications and formalities indicated by the Internal Revenue Service. 6. A recipient who grants certificates for donations which do not meet the conditions laid down in this law or which will make money from donations for purposes not included in the respective project or a project other than the one to which the The tax will have to pay the tax equivalent to the credit used by the donor in good faith. The administrators or representatives of the donor shall be jointly and severally liable for the payment of such a charge and for the adjustments, interests and fines to be determined, unless they prove to have been opposed to the acts giving rise to this sanction or who were not aware of them. 7.-Donations of less than 1,000 Monthly Tax Units made directly to institutions mentioned in Article 2 or the Fund shall be entitled to a credit equivalent to 50% of such donations against taxes indicated in the first indent. In the case of tax payers of the First Category, this benefit will only apply when the donations that are made in the same year are carried out at least to two different institutions, not being able to exceed any of them the amount 8.-Donations of an amount equal to or greater than 1,000 Monthly Tax Units, in which at least 33% of the total has been made to the Fund, the donor being able to propose the area of projects or programmes to which this percentage will be allocated in the form laid down in the regulation to which the Article 6, shall be entitled to a credit equivalent to 50% of the amount of the donation. Donations of an amount equal to or greater than 1,000 Monthly Tax Units, in which a percentage less than 33% of the total has been made to the Fund, will be entitled to a credit equivalent to 35% of the amount of the donation. 9.-For the purposes of the above numbers, all donations of less than 1,000 Monthly Tax Units made by a donor in a form integral to any institution of those mentioned in Article 2, in the The same calendar year, they will be considered a single donation for the total amount donated in that period for the purpose of calculating the tax credit. 10.-notwithstanding the above, the first class taxpayers who have made donations according to the number 7.-of this article, to institutions that provide only services such as the In addition, donations of up to 1,000 Monthly Tax Units, projects and programs aimed at the prevention or rehabilitation of alcohol or drug addictions may also be made, certificates in accordance with the second paragraph of Article 5, supplementing, in total, up to 2,000 Monthly Tax Units. In this case, these donations will also have a credit equivalent to 50% of the donation. This benefit will only be applied when these donations are destined in the same year at least to two different institutions, not being the same ones that have received donations according to the number 7.-of this article, and without a single donation exceeds the equivalent amount of 700 Monthly Tax Units. First category taxpayers who make donations of an amount equal to or greater than 1,000 Monthly Tax Units to projects or programs intended for the prevention or rehabilitation of alcohol or drug addictions, certificates of According to the provisions of the second indent of Article 5, in which at least 25% of the total donation has been made to the Fund, they will have a right of credit equivalent to 50% of the amount of the donation. If the Fund is not provided or the contribution is less than 25%, the credit shall be equal to 40% of the amount of the donation. In the event of donations to the Fund, the donor may propose the project area and programmes to which his donation will be allocated, in the form established by the regulation referred to in Article 6. 11.-The credit referred to in this article only may be deducted if the donation is included on the basis of the respective taxes corresponding to the income of the year in which the donation was made materially. 12. In no case, the credit for the total donations of the same taxpayer may exceed the amount equivalent to 14,000 Monthly Tax Units per year. 13.-The donations of this article, in that part that give the right to the credit, will be rearranged in the form established for the obligatory provisional payments of the Law on Income Tax, to count from the date on which it is incurred the actual disbursement. 14.-That part of the donations which cannot be used as credit, shall be considered a necessary expense to produce the income, in accordance with the provisions of Article 31 of the Law on Income Tax. " 6) Add the following article 1 ° Bis: " Article 1 ° Bis.-In so far as the procedures, conditions and requirements laid down in this law are satisfied, they shall be entitled to the same benefits as the previous Article, by the donations they make to the terms established, the contributors of the Complementary Global tax to determine their income in accordance with the provisions of Article 50 of the Law on Income Tax, on the basis of its effective expenditure, while those taxpayers of the tax referred to it on the basis of alleged expenditure, and affections to the Tax referred to in Article 43 (1) of the same legal text shall be entitled only to the credit against the respective tax. For the purposes of exercising the benefits referred to above, the taxable persons in accordance with The provisions of Article 43, number 1, must present an annual declaration in the form and time limit determined by the Internal Revenue Service, updating the monthly tax that would have been withheld, considering the variation of the Consumer Price Index on the last day of the month preceding the month in which the retention was made and on the last day of the month before the end of the corresponding year. The amount that will result will be attributed to you as credit 50% of the donation with the maximum established in this law, and if it results an excess, it will be returned in accordance with the provisions of article 97 of the Law on Income Tax. The taxpayers referred to in this Article shall be released from the duty of information provided for in Article 1 (5), without prejudice to the fact that they shall hold the certificate issued by the donor in their possession. of the donation made in accordance with the provisions of this provision, and submit it to the Internal Revenue Service when it so requires for the purpose of crediting the respective donation. For their part, the donors who, in accordance with this law, receive donations from these taxpayers must inform the Internal Revenue Service, in the form and term that this body establishes by resolution, the amount of the donations, the address, the RUT and the identity of the donor. ' 7) Amend Article 2, in the following sense: (a) Amend the first subparagraph, as follows: (i) Intercalase, between the voice "regulation" and the point followed that happens to it, the expressions " and having been qualified as of social interest by the council, according to the provisions of article 4 °. In addition, educational establishments that have projects aimed at the prevention or rehabilitation of alcohol or drug addictions, for their students and, or proxies, will be able to receive these donations, replacing the "and" the word "disabled", by a comma. (ii) Replace at number 3), the phrase "rehabilitation of drug addicts" by the following: "the prevention or rehabilitation of alcohol or drug addictions". (b) Add the following final point: " For the purposes of crediting the good use of the donations referred to in Article 1, the donor institution shall carry out a Book of Grants, in accordance with the provisions of the regulation to which it refers Article 6 °. In any case, the Book referred to must indicate, for each donation, at least, the name of the donor, number of certificate issued, total amount of the donation and destination of the same. In addition, it must prepare annually a report of the state of the income from the donations and the detailed use of these resources, according to the contents established by the Internal Revenue Service, which must be sent to that Service within the first three months of each year. Failure to comply with this paragraph shall be punished in the manner prescribed in Article 97 (2) of the Tax Code, being jointly and severally liable for the payment of the respective fine by the administrators or legal representatives. (8) Amend Article 3, in the following sense: (a) In its first indent, replace the expression 'mixed fund of social support' with 'Joint Social Support Fund', and delete the phrase 'hereinafter' the fund '. (b) In the second subparagraph, replace the words "No 2" with "numbers 7, 8 and 10". (c) In its third indent, add the following point (.), which shall be followed: "The determination of 5% of the Fund, as indicated above, shall be carried out in the manner indicated in the Regulation." 9) (a) In the following manner, the following amendments shall be inserted: (i) Intercalase following the expression "Confederation of Production and Trade or its representative", the following sentence, preceded by a comma (,): " a representative of the territorial and functional community organizations constituted in accordance with Law No 19,418, designated in the form laid down in the Regulation. (ii) Replace the words 'three' with 'four', the two times appearing in the text. (b) Intercalase in the fifth indent, in the number 3.-, between the comma following the expression "title" and the conjunction "and", the following sentence: " to qualify your social interest, considering the specific social activities that the beneficiary is proposes to take place within a specified period ". (10) Amend Article 5, in the following sense: (a) Substitute, in its first indent, the term "Council" by "council". b) In its second indent, replace the expression "the two years immediately preceding" by "the year immediately preceding" and add after the point apart (.), which happens to be followed, the following sentence: " In addition, they must be certified by the National Council for the Control of Narcotic Drugs, according to the criteria set out in the guidelines. (a) technical provisions to be laid down in the Regulation referred to in Article 6. '; (c) Reposition in its third subparagraph, the sentence "The execution of such projects and programmes shall not exceed a period of three years.", by the following sentence: " The execution of such projects and programmes shall not consider a period of less than six years. (d) To replace its fourth indent, by the following points: " The results of the evaluation of the institutions and their projects or programmes, the allocation of the resources of the Fund, the registration of institutions eligible to receive contributions from the donations, along with the listing of the projects and eligible programs, as well as the identity of the donor, the amount donated and the donor entity of each donation, will have a public character and must be published on the website of the agency responsible for carrying the respective registry, in form clear and orderly, so that it can be reviewed by all users of the system without the need to obtain key or have to pay for obtaining this data. The Ministry of Planning, by way of a founded resolution, may remove from the register those institutions that have incurred the following conduct: (a) Failure to comply with the obligations imposed by the donation received. (b) to have made money from the donation for purposes not included in the project or program concerned or a different one from the one to which the donation was made. (c) Haber is engaged in any of the conduct typified in Articles 11 and 13 of this Law and in Article 97, N ° 24., of the Tax Code. (d) to have been sanctioned by a competent court, for arbitrary refusal of attention to beneficiaries of the respective project or programme, or of other programmes or social benefits which the beneficiary institution administers. The institutions whose elimination of the registration has been declared for the first time, will not be able to join again to this nor to present new projects or programs to financing of donations that it treats this law nor to the financing of the (a) the Fund's resources, within three years from the date of the resolution which applied that sanction. If the registration of the entity is declared again, the same penalty shall apply to it, but for a period of six years. The application of the sanction for the removal of the registration shall be subject to the following procedure: (a) The Ministry of Planning shall notify the registered entity of the registration, by registered letter sent to the registered office, of the facts or charges that merit the sanctioning procedure, indicating the rule infringed and the sanction that the law assigns to said fact. (b) The notified shall have a period of five working days to carry out its discharge. (c) Once the discharge has been carried out, or after the deadline for this, the Ministry shall examine the merits of the records and, if necessary, order the surrender of the evidence. The probative term will be five working days, and the test will be appreciated according to the rules of healthy criticism. (d) Once the last relevant probative diligence has been carried out, the authority shall, within thirty days, issue a reasoned decision terminating the proceedings, resolving the questions raised, and taking a decision on each of the claims and defenses of the donor entity, and containing the statement of the measure imposed, or the acquittal. (e) The period of six months from the date of the formulation of the charges, without final judgment being given in the respective proceedings, may be required by the alleged infringer to decide on the matter, The Ministry shall issue a decision terminating the proceedings within ten working days, under the warning that the entity shall be acquitted of the charges that have been made. (f) Against the decision ordering the removal of the registration, which shall be notified to the representative of the sanctioned entity, the resources provided for in Law No 19,880 shall be made. " 11) Amend Article 10, in the following sense: (a) Replace the first paragraph with the following: " The whole of the donations made by the taxpayers of the tax of the First Category of the Law on Income Tax contained in the Article 1 of Decree Law No. 824, 1974, is for the purposes stated in article 2 of this law or for those established in article 69 of Law No. 18,681; article 8 of Law No. 18,985; article 3 of the Law No. 19.247; law No. 19.712; article 46 of decree law No. 3.063, 1979; decree law No. 45, 1973; article 46 of law No. 18,899, and in Article 31, No. 7 of the Law on Income Tax, as well as for those established in other rules The legal basis for granting tax benefits to donations will have as an absolute global limit the equivalent of 5% of the taxable income. Such a limit will apply either to the tax benefit consisting of a credit against the First Category tax, or to the possibility of deducting how the donation was spent. However, this limit shall not be included in the limit referred to in Article 8. For the purposes of determining this limit, donations to the entities referred to in Article 2 shall be deducted from the taxable income. " (b) Intercalanse the following: Second and third, passing the current second indent to be fourth: " With all, the taxpayers affected to the tax of First Category of the Law on Income Tax mentioned in Article 1 °, will be able to make irrevocable donations of long-term to the institutions referred to in Article 2 or to the Fund provided for in Article 3, up to the equivalent of 1.6 per thousand of its own tax capital, with a maximum of 14,000 Monthly Tax Units per year, whatever the taxable income of the respective year or when they have losses. In such a case, if in any of the exercises corresponding to the duration of the donation, the taxpayer records a taxable income such that 5% of it is less than the amount of the contributions of said donation which have expired and have been paid in the financial year, the taxpayer shall not be entitled to the credit referred to in Article 1 (1) for the quotas indicated, but may be fully deducted as accepted expenditure. The donations referred to in this paragraph are those in which the donation is made irrevocably through a public deed, not subject to mode or condition, establishing future payments in annual and fixed fees, expressed in units of promotion and for periods not less than four commercial exercises. In the case of the taxpayers of the Global Complementary Tax who determine their income in accordance with the provisions of Article 50 of the Law on Income Tax, and those taxpayers affected by the tax referred to in the 1st Article 43 of the same legal text, the absolute absolute limit set out in the first paragraph of this article for donations made in accordance with the tax laws, shall be equal to 20% of their taxable income, or shall be 320 Monthly Tax Units, if this amount is less than that percentage. In any event, donations exceeding that limit shall also be released from the process of insinuation. ' (12) Substitute Article 11 by the following: " Article 11.-Institutions receiving donations under this law or other persons who grant a tax benefit to the donor, may not make any provision in favour of the donor, directly or indirectly, exclusively, under special conditions or requiring less requirements than those which they require in general. They shall also not be able to perform such benefits in favour of the employees of the donor, their directors, or the spouse or the consanguine relatives, to the second degree, of all of them, either directly or through related entities in the terms referred to in Article 100 of Law No 18,045. This prohibition shall apply for the six months preceding and 24 months after the date on which the donation is made. In this situation, among others, the following benefits are provided: grants for study, training courses, or others; transfer of goods or services financed with the donation; delivery of the marketing or distribution of such goods or services, in both cases where such goods or services, or the operation entrusted, are part of the economic activity of the donor; carry out publicity, beyond reasonable recognition, where the latter is of its own a consideration under paid contracts and make any mention in that advertising, with the exception of the name and logo of the donor, of the products and/or services that it markets or provides, or to deliver goods or to provide services financed from the donations, when it means profits of a low consideration paid contracts. However, the provisions of this article do not apply when the benefits made by the donor or third parties related or contracted by the donor, in favor of the donor, have a value that does not exceed 10% of the amount donated, with a maximum of 15 Monthly Tax Units in the year, considering for this effect the current values in place of the respective goods or services. Failure to comply with this article will result in the loss of the benefit to the donor and will force him to reinstate that part of the tax that he has stopped paying, with the surcharges and pecuniary penalties that correspond according to the Code Tax. For this purpose, the tax shall be deemed to be in arrears from the end of the payment period corresponding to the tax year in which the respective tax had to have been paid not to mediate the tax benefit. Also, the donor and the donor who do not comply with the provisions of this article will be punished with a fine of fifty percent to three hundred percent of the tax that the donor has stopped paying for the donation. The application of this sanction shall be subject to the procedure laid down in Article 165 (2) of the Tax Code. The Ministry of Planning, in conjunction with the Ministry of Finance, will report once a year to the National Congress on the operation of this law. " Article 2-Substitute the number 24, of Article 97, of the Tax Code, by the following: " 24. Tax payers established in the Law on Income Tax, which dolously receive consideration from the institutions to which they make donations, in the terms established in the first and second of the Article 11 of Law No 19,885, whether for the benefit of his or her members, directors or employees, or of the spouse or of the consanguineous relatives to the second degree, of any of the persons appointed, or simulates a donation, in both cases, of those that grant some kind of tax benefit that ultimately involves a minor payment of some of the taxes referred to, will be sanctioned with the penalty of lesser prison in its minimum grades to medium. For the purposes of the preceding paragraph, consideration shall be given to consideration when in the period between six months prior to the date of the materialisation of the donation and the 24 months following that date, the donor delivers or is obliged to provide a sum of money or species or to provide or to provide services, any of them valued in a sum greater than 10% of the amount donated or exceeding 15 Monthly Tax Units in the year to any of the persons appointed in that subparagraph. The donor who dolously goes through or uses donations from those that the laws allow to be reduced from the tax base affects the taxes of the Law on Income Tax or that give credit against those taxes, for different purposes Those who correspond to the donor entity according to their statutes, shall be punished with the penalty of lesser prison in their mid-to-maximum degrees. " Article 1 Transitional.-Within 90 days of the publication of this law, the regulation referred to in Article 6 of Law No 19,885 shall be amended, in accordance with the provisions of this law. Article 2-Transitional.-This law shall enter into force on 1 January 2010, subject to donations made as from 1 January 2009. However, both the article introduced by issue 6), as well as the amendments made to the number 9), both in Article 1 °, shall enter into force on 1 January 2011, giving rise to donations from 1 January 2011. January 2010. Article 3 Transitional.-During the first year of validity of this law, the institutions referred to in the first paragraph of Article 2 (1) of Law No 19,885, whose statutes do not expressly indicate the purpose required in that paragraph and, without However, this has been verified in their actual activity, they may be incorporated in the register that establishes the article 5 ° of the said law and submit projects to be qualified by the council established in article 4 of the same legal body, if to the the time to apply for his incorporation to the Ministry of Justice amendment of its statutes, in order to expressly provide for the purpose or purposes corresponding to it in accordance with the said article. " Having complied with the provisions of Article 93 (1) of the Constitution of the Republic of the Republic, and because I have had to approve and sanction it; therefore, promulgate and take effect as the Law of the Republic. Santiago, December 31, 2008.-MICHELLE BACHELET, President of the Republic.-Andres Velasco Branes, Minister of Finance.-Paula Quintana Melendez, Minister of Planning. What I transcribe to you for your knowledge.-Salute intently to you, Maria Olivia Recart Herrera, Deputy Finance Secretary.