Introducing the new identity of NSS.
The FUT was eliminated years ago, but it didn't disappear. Its balances are still alive in two new registers—RAI and STUT—and, according to SII data, the profits that passed through them without paying their final tax exceed the size of Chile's GDP. It is one of the country's largest pools of deferred taxes.
The Reconstruction Law opens a temporary window to withdraw part of that money by paying a single 10% rate. Here's what it is, how it's calculated, and the question that truly matters: is it worth paying that 10%?
It's a temporary option: the taxpayer pays a substitute 10% tax on a portion of their accumulated profits and, with that, those profits are freed from final taxes (Global Complementario or Additional). Once paid, that amount can be withdrawn without further taxation. The option can be exercised within an eight-month period from the law's publication.
For decades, Chilean companies accumulated profits that paid the first-category tax, but whose owners did not pay the final tax until they withdrew them. This stock was recorded in the Taxable Profits Fund, the famous FUT. As long as the money remained in the company, the final tax remained suspended—sometimes for generations.
The 2014 and 2020 reforms eliminated the FUT going forward, but the accumulated balances were not erased: they were transferred to successor registers. The STUT (Total Taxable Profits Balance) carries that historical balance with its credit; the FUR (Reinvested Profits Fund) holds profits that were reinvested at the time; and the RAI (Taxable Income) is the current register of profits that will be subject to final taxes when withdrawn. That's why the press calls them "the heirs of the FUT": different name, same pending tax debt.
The mechanism, according to the articles (Transitory Arts. 11 and 12), has four parts:
The substitute tax does not apply to a single balance: it covers the FUR, the STUT, and excess withdrawals from the old FUT. The most commonly discussed basis—the lower of STUT and RAI—corresponds to the STUT option, and sets a cap: no more is released than what the lowest register allows. What is paid is recorded as income with fulfilled taxation in the REX register, and from there it can be withdrawn without being subject to the imputation order. The absence of credit is the hidden cost of the 10%, as will be seen next.
The 10% rate is low, but it's not compared against zero: it's compared against what it would cost to withdraw those profits through the normal route. And that's where the credit detail comes in.
Let's take a company with $1 billion in releasable accumulated profits (the lower of RAI and STUT). With the substitute tax, it pays $100 million, and those $1 billion become available for withdrawal without further final tax. It does not use the IDPC credit.
Through the normal route, the owner who withdraws those $1 billion pays Global Complementario, which reaches 40% in the highest bracket, and uses the IDPC credit that the profits carry as a deduction. How much they end up paying depends on two things: their marginal rate and how complete that credit is. For an owner in a high bracket whose profits carry a partial credit, the net burden can be well above 10%; for one in low brackets or with a high credit, the difference narrows.
The practical criterion: for large estates, with owners in the high brackets of the Global Complementario and balances they intend to withdraw or reorganize anyway, the 10% is usually very convenient. For those who do not plan to withdraw, or are in low brackets, it may not be worth prepaying the tax. There is no single answer; it's a comparison that must be run with each company's real numbers.
SMEs under the Pro Pyme regime paid their first category tax at low rates: 12.5% during the transitional rate years, and even 6.25% in certain cases. This changes the calculation, because the option doesn't use the credit: the lower the rate the company paid, the less credit is lost when opting for 10%, and the more advantageous it becomes.
Let's consider the total burden. Withdrawing profits through this option costs the 10% substitute tax plus what the company already paid in first category tax (which, with this option, ceases to be a credit and becomes a cost):
Distributing normally, on the other hand, costs the owner's Global Complementary tax rate, which the first category tax credit covers under the integrated system. That rate ranges from 0% to 40% depending on annual income. The option is beneficial when that rate exceeds the total burden of the substitute tax: ~21% for SMEs that paid 12.5%, ~16% for those that paid 6.25%.
From what annual income? On the Global Complementary tax scale, the marginal rate jumps to 23% when annual income exceeds 70 UTA, approximately $59 million using the UTM value for May 2026. Therefore, as a rough rule of thumb: if the owner —adding all their income and withdrawals— falls into the 23% bracket or higher (above approximately $59 million annually), withdrawing the money through the 10% option is cheaper than distributing it normally, and the savings increase with the bracket. If they fall into lower brackets, it's usually better to distribute at the normal rate and not prepay tax. The SME that paid 6.25% reaches that point of advantage a bit sooner, because it loses less credit.
Example. An SME that paid 12.5% has $200 million in accumulated profits to withdraw. Through the option, they pay $20 million (10%), with a total burden close to 21%. If those profits were distributed to an owner in the 35% bracket, the total burden would be 35%: the option saves them about 14 percentage points, approximately $28 million. But if the owner is in the 8% bracket, the normal burden (8%) is less than the 21% of the substitute tax, and the option is not beneficial.
Assumptions: integrated system (100% usable credit), net corporate income tax (IDPC) base, and the owner's rate applied to the withdrawal. A large withdrawal moves up the scale, so the larger the balance, the more beneficial the option tends to be. The exact break-even point depends on the actual credit of each balance, the owner's other income, and the gross-up mechanism; model case by case.
By opting for the substitute tax, you waive the corporate income tax (IDPC) credit associated with those profits. That's why the 10% is not "free": it's cheap compared to high marginal rates, but you have to deduct the credit that is foregone when comparing.
Not all historical FUT is released, but only up to the limit of the lowest balance as of 12/31/2025 or 2026. It's advisable to check both balances before calculating the benefit.
No one is forced to pay the substitute tax. It only makes sense if the numbers, compared to a normal withdrawal, are favorable.
The rate, the base, the 8-month period, and the loss of credit are included in the draft bill's articles (Transitional Articles 11 and 12), but it is still in the Senate and could be adjusted. The deadline starts from the date of publication, not from today.
There's a fundamental reason behind the measure: the Treasury estimates collecting approximately US$770 million in two years by prepaying a tax that, otherwise, could be deferred indefinitely. For the taxpayer, it's the flip side of the coin: paying now, cheaply, what they would eventually have to pay more expensively.
If you have carried-forward accumulated profits and a withdrawal or corporate reorganization horizon in sight, this option is one that should be modeled as soon as the law is published, with the RAI and STUT balances available and the owner's marginal rate on the table. Eight months pass quickly when you have to gather information, run the calculations, and make a decision.
This content is for informational purposes only and does not replace advice for your specific case.
These are accumulated profits that paid first category tax but not the final tax. Today, they reside in the RAI and STUT registers, successors to the FUT.
A single 10% rate, which replaces the final taxes (Global Complementary or Additional) on the profits covered.
On the lower amount between the balance of the STUT register and that of the RAI, as of December 31, 2025 or 2026.
8 months from the publication of the law.
It depends on your marginal tax rate and the associated credit. For owners in high tax brackets with large balances who still plan to withdraw, it's usually beneficial; for those in low brackets or with no intention of withdrawing, not always. It needs to be calculated on a case-by-case basis.
Yes. The substitute tax does not grant the right to the first category tax credits associated with those profits; this must be considered when comparing it with a normal withdrawal.