December 2012: A tax reform bill was aproved by Congress including changes to the corporate income tax rate, the value added tax (VAT) rates, and concerning income taxes for individuals. The tax reform (reforma tributaria) was sent to congress on 2 October 2012, with provisions including the following: Corporate tax: The proposal would reduce the existing rate of corporate income tax from 33% to 25%; the 8% reduction would be a new tax known as the “fair tax” (Impuesto para la Equidad).

VAT: To address the burden of the tax administration, the VAT rates would include only three rates— the existing VAT rates of 0%, and 16% rates, as well as a new 5% rate (thus eliminating the 1.6%, 10%, and other rates above 16%). Individual income tax: The bill approves that the tax system impose a higher rate of tax on higher incomes, as well as a minimum tax.

Other income (ganancias ocasionales): A measure would reduce the rate on assets held for more than two years from 33% to 15% with respect to the sale of corporations (venta de sociedades), and to 10% for the sale of assets.