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Franchise Tax

What is the tax exemption training?

The Franchise Tax is the tax incentive introduced by Law No. 19,518 granted to enterprises classified by the Internal Revenue Service as a Taxpayer First Act Category Income Tax and have an annual payroll of taxable income exceeding 35 UTM.

This franchise consisting of the ability to deduct the income tax payable annually, until the occurrence of 1% of annual payroll earnings of all employed workers, on account of the expenses incurred by the implementation of measures informed the SENCE and endorsed by this service prior to beginning training, through the process called "Communication" (information to be provided by the company to SENCE one business day before the start of training through a form that exists for these effects) and subsequently endorsed his term through the process called "Liquidation" (information that must deliver the company conducting the training done through the form used in the "Communication", recording the information at the end of the course or the period for the year is paid in the event that the course to the next tax year, all within the period of 60 calendar days from the date of completion of the activity). To qualify for the tax exemption requirement is necessary to carry out the procedures for communication and settlement
Now if the annual return of taxable income is greater than 35 (approx $ 1.5 million) and less than 45 UTM (approx $ 1.9 million) and the company paid pension contributions records pertaining to that return, may deduct up to 7 UTM ($ 300,000 approx) in the financial year; if the annual return of taxable income is equal to or greater than 45 and up to 900 UTM UTM (approx $ 38 million), and the company paid pension contributions records pertaining to that return, you may deduct up to 9 UTM (approximately $ 380,000) in year year; and if the annual return of taxable income is more than 900 UTM, and the company paid pension contributions records pertaining to that return, may deduct the equivalent to 1% of the annual return of remuneration.
Moreover, companies can run training activities internally or externally, retaining the services of the Enforcers Training Technical Agencies (OTEC) or through the Intermediate technical training organizations (OTIC). For more information on this subject you can visit the website of the National Training: www.sence.cl