LAW NO. 20,565 AMENDS LAW NO. 20,444, AND LAW NO. 19,885, WITH THE AIM OF ENCOURAGING DONATIONS AND SIMPLIFYING THEIR PROCEDURES. Having regard to the fact that the National Congress has given its approval to the following: Draft Law: " Article 1 °.- Introduce the following amendments to Law No 20,444, which creates the National Reconstruction Fund and establishes mechanisms for tax incentives for donations made in the event of a disaster: 1) In Article 1: (a) In the second subparagraph, the words "in money" shall be given in the second indent, "according to the modalities laid down in Titles II and III of this Law", and the last sentence beginning with the sentence "Likewise, shall be part of the Fund". (b) Replaced in the paragraph Third, the words "The resources" for "The donations" and "Program 03, Complementary Operations" by "Program 01, General Revenue". (2) Subparagraph in Article 2 °, fourth indent, the phrase "to the Ministry of the Interior or the Fund" below of the word "made". 3. in Article 4: (a) Substitute the first and second subparagraphs for the following: " Benefit for donations made by certain taxpayers of the First Category Tax. Tax payers of the first category who declare their effective income according to complete accounting, who make donations in money or in kind in the form provided by this law, will be entitled to a credit equal to 50% of the amount of such donations, which shall be charged only against the tax corresponding to the financial year in which the donation is actually made. Such credit may be used only if the donation is included in the taxable amount of the tax corresponding to the income of the year in which the donation was made materially. " (b) The following third, fourth and third subparagraphs are added: Fifth new, passing the current third and fourth incites to be sixth and seventh, respectively: " The credit indicated in the previous incites will be applied before any other credit. If, after that, an excess is found, the excess shall not be returned or be charged to any other tax. That part of the donation which is within the limit indicated in the following subparagraph, which cannot be imputed as a credit, may be reduced as expenditure on the taxable income for the financial year in which the donation, determined in accordance with Articles 29 to 33 ° of the Law on Income Tax. The tax benefits for the donations that this law treats may not exceed, at the expense of the taxpayer, the amount of the taxable income or the one comma six per thousand of the company's own capital at the end of the financial year The latter is determined in accordance with the provisions of Article 41 of the Law on Income Tax. The excess over that amount shall not be charged as a credit, nor reduced as expenditure, nor shall it be affected by the provisions of Article 21 ° of the same legal text. The limit of the taxable amount stated in this subparagraph shall be determined in preference to any other limit which may affect other donations made by the taxpayer. ' (c) Substitute in the third subparagraph, which has become sixth, the expression "of the previous paragraph" by "of the donations in kind". (4) In the first subparagraph of Article 5 (1), the phrase ' determining their actual income may be reduced from the taxable amount of the tax to the sums donated in money for the Fund in accordance with this law. For their part, the other taxpayers of the tax. " 5) Modify the first paragraph of Article 6 as follows: (a) Replace the initial sentence starting with "The additional tax payers" and end with "(thirty-five percent)", by the following sentence: " The Tax payers of the additional tax to be declared annually by that tax, and the shareholders referred to in Article 58 (2) of the Law on Income Tax, shall be entitled to a credit against the tax which is serious in their income affections to the said tribute, equivalent to 35% '. (b) Intercalase at the end of the second sentence, after the term "additional tax", the phrase "to the extent that they are to be considered as forming part of the tax base of that tax". 6. In the heading of Title III, the phrase 'to the National Fund for Reconstruction' shall be replaced by the following: (a) In the first subparagraph: (i) delete the phrase "intended for the Fund"; (ii) interleave the expression "construction" between the words "the" and "reconstruction"; (iii) replace the text following the expression "identified" and until the final point, for the following: "by one or more supreme decrees of the Ministry of Finance, issued under the formula" By order of the President of the Republic "and signed, moreover, by the Minister of the Interior, henceforth the" works (b) In the second indent: (i) replace the word "include" by the phrase "being of a nature" (ii) the term "restoration" means the expression ", replacement"; (iii) replace, following the word "sports", the phrase " of a public nature; as well as the acquisition of the furniture and equipment necessary for its operation. "for the following:", architectural historical heritage of heritage areas and typical areas, mitigation works, evacuation plans and, in general, designs and studies to carry the works, in addition to the acquisition of land and the necessary furniture and equipment (c) Substitute the third subparagraph by the following: " In the case of private specific works, it shall be a requirement that they have a manifest public interest or that they provide a service to the community in general, which shall be determined on the basis of a previous report issued by the Ministry of Planning, based on an economic technical evaluation which analyses its social profitability. " d) Transfer the second sentence of the current second indent, which starts with the expression "The Ministry of Finance" and ends with "the resources of the Fund", as a new point The fourth and fifth, the fourth and sixth, are the fourth and sixth, respectively. (e) First of all, in the present fourth indent, which has become fifth, following the expression "specific works", the word "private"; and replace the word "authorized" with "identified"; the expression "above" by the phrase " first of this article "; and the phrase" its direct costs and beneficiaries "by" its benchmark value and its direct beneficiaries ". (f) The current sixth, seventh and eighth incits. 8. The following Articles 8 and 8 (b) shall be incorporated in the following Articles: " Article 8a.-Donations directly to the Fund, to the beneficiaries or to their representatives. Donors may make the donation directly to the Fund to be allocated by the Ministry of Finance to the beneficiary in the form provided for in the Regulation, directly to the beneficiary or to a third party representing the beneficiary. The specific works may be executed, in addition, directly by the donor, for which, in case of specific works of public nature, the subscription with the Ministries, Regional Governments or Municipalities will be necessary, according to corresponds to one or more conventions in which the reference value of the donated work must be recorded, as well as the technical specifications thereof. In the same agreement, the period of execution of the work and the contributions committed by him or the donors will be recorded. The Ministry of Finance may request from donors who have concluded the conventions referred to in the preceding paragraph, the relevant information to verify compliance with the conditions laid down in this respect. However, for the purposes of taxation, the Internal Revenue Service may request from the Ministry of Finance the background. In the case of donations to specific public works in which there is no execution by the donor, the recipient of the donation shall be entitled to contract the execution of the work financed in whole or in part with donations, by means of the (a) a mechanism for dealing or directly contracting in law N ° 19,886, the Law of Bases on Administrative Contracts for Supply and Services. Article 8b.-Obligations of information. If the donation is granted directly to the beneficiary or to a third party representing it, it will be the responsibility of the first one to allocate the donated to the respective specific work. The beneficiaries or their representatives shall report each year to the Ministry of Finance, before 31 December, the use of the resources received, the state of progress of the specific works and the result of their execution. Without prejudice to this, the Secretariat of Finance may ask the beneficiaries for the information it deems necessary to verify compliance with the conditions laid down in each case. The Deputy Minister of Finance may declare, by way of resolution, the failure to comply with the terms and conditions of the donation, if the information or antecedents required in accordance with the provisions of the foregoing paragraph are not submitted to their satisfaction within the time limits specified in the respective application, or where the information has been provided that the resources have been allocated for purposes other than those referred to in the specific work respective. The decision referred to above shall be notified to the beneficiary and to the other persons concerned. The remedies provided for in law No 19,880 shall be brought against that decision. e Bases of Administrative Procedures. Once the above resolution is found, it will be forwarded by the Assistant Secretary of Finance to the Internal Revenue Service, to make the tax turn referred to in the following paragraph. The beneficiary affected by that decision shall pay the tax equivalent to the tax equivalent to the credit used by the donor in good faith. The administrators or representatives of the beneficiary 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. For the purposes of its spin, determination, readjustment and application of penalties, this tribute shall be considered as a tax subject to withholding and shall not be deducted as expenditure by the taxpayer in the determination of its taxable liquid income. affects the First Category Tax of the Law on Income Tax. Against the turn of the Internal Revenue Service, the taxpayer may deduct claim under the general procedure laid down in Title II of Book III of the Tax Code only if it does not comply with the Deputy Minister of Finance who has served as antecedent. "9) In Article 9: (a) Intercalase in the first paragraph, the phrase" and the issue of certificates "following the expression" specific works ", the first time it appears. (b) Substitute the second and third subparagraphs for the following: " These donations shall have the same tax treatment as intended for the donations provided for in Title II of this Law. However, donations made by tax payers of the first category to declare their income in full accounting, which make donations in cash or in kind to finance specific works, shall not be entitled the credit referred to in Article 4, but they may reduce the amount of the donation in the same terms as stated in that article. The Ministry of Finance must issue the certificates that account for the donations made in accordance with this law, according to the specifications and formalities that the Internal Revenue Service points out through resolution. Prior to the issuance of the respective donation certificate, the donors shall be required to give the Ministry of Finance the responsibility for making the donation by means of documents proving the donation in accordance with the specifications and (10) Replace in the second paragraph of Article 21 the sentence and the comma (,) to the foregoing, "the amounts and individualization of the donations received" by the sentence " and the amounts and individualisation of donations made in accordance with Title III of this Regulation law '. 11. In the transitional article, the words "to the Fund" shall be replaced by the phrase "two-year period from its entry into force" by the phrase "day 31 December 2013". Article 2.-Introduces the following amendments in Law No. 19,885, which encourages and rules the good use of donations that give rise to tax benefits and extends them to other social and public purposes: 1) In Article 1, number 5: (a) Redeploy the word "donors", "donors", the first time it appears in the text; (b) Replace the phrase "the RUT and the identity of the", by "single tax role and the identity of the donor and the"; (c) Eliminate, following the first "Information provided in compliance with the requirements of this issue shall be covered by the secrecy laid down in Article 35 of the Tax Code." 2. the expression "lower", the words "or the same", and remove the sentence that follows the point followed, going on to be an end point. 3. in Article 1 (8): (a) Reposition the initial sentence starting with "The donations" and ending with "at least 33% of the total has been made to the Fund" by " Aquella part of the donations exceeding 1,000 Tax Units Monthly, and of which at least 33% of that part has been donated to the Fund. " (b) Following the following point, the phrase "Donations of an amount equal to or greater than" for "Aqua part of donations exceeding"; and the phrase "in which a percentage less than 33% of the total has been effected" by " and a percentage of less than 33% of that part has been donated '. (c) Replace the final sentence "of the donation" by "exceeding 1,000 Monthly Tax Units." 4) In Article 1 (9): (a) Intercalase the phrase "or equal" following the word "inferior". b) Replace the phrase "in full form to any", by the expression "to the same". c) Replace the phrase "calculate the tax credit" for "determining the applicable tax credit". 5. in Article 1 (10): a) First, in the first paragraph, the sentence following the second point followed, which begins with "This benefit shall only apply" and ends with "Monthly Tax Units." (b) Replace in the second paragraph, the sentence that begins with " The "and that ends with" 50% of the amount of the donation. "for the following:" That part of these donations exceeds the 1,000 Monthly Tax Units and of which, at least, 25% has been donated to the Fund, they shall be entitled to a credit equivalent to 50% of that part. ' (c) Substitute in the second subparagraph, the " For the amount of the donation that exceeds the 1,000 Monthly Tax Units, it will be equal to 40 percent of the amount. (6) Replace in the first paragraph of Article 1 ° Bis, the words "those" by "the others" and delete the phrase "which they declare on the basis of alleged expenditure,". 7) In Article 2: (a) Replace in the first paragraph the expression " refers to the "by" means Articles 1 and 1 (b) Substitute in the numeral 1 of the first indent, the conjunction "and" by a comma (,), and add the expression "and habitat" before the end point. (c) Eliminate in the second subparagraph, the following phrases: "on the one hand, direct," and the comma (,) which the antecede; "on the other hand," and the comma (,) that the antecede; and, "to individuals individualizable and distinct to the associates of the institution,". 8) Delete in the third indent of Article 5 °, the final sentence "The execution of such projects and programmes shall not be considered to be less than six months or to exceed a period of three years." Article 1 Transitional first.-The provisions of Article 5 (b) of the first article shall govern the entry into force of Law No 20,444. Second transitional article.-In order to make the transfer of the donated resources more expeditious under the law Nº 20,444 and which have been materialized prior to the entry into force of this law, such funds may be transferred without the need to require the beneficiaries to grant a guarantee or to provide other guarantees in favour of the tax. " Santiago, January 23, 2012.-SEBASTIAN PINERA ECHENIQUE, President of the Republic.-Felipe Larraín Bascunan, Minister of Finance.-Rodrigo Hinzpeter Kirberg, Minister of the Interior and Public Security.-Joaquin Lavin Infante, Minister of Development Social. What I transcribe to you for your knowledge.-Atently, Julio Dittborn Cordua, Deputy Minister of Finance.