Chilean Court Strikes Down Key Tax Reform Elements

Chile's Constitutional Tribunal has partially upheld challenges against key elements of the government's major tax reform, known as the "megareform." After extensive deliberation, the court ruled on Thursday to accept some of the unconstitutionality claims filed by opposition lawmakers.

The tribunal's decision specifically targeted provisions concerning tax invariability for investors. It declared four specific points unconstitutional. These points were part of Article 29, which aimed to establish a 20-year period of tax stability for both foreign and local investors.

Among the invalidated clauses were phrases like "among others" in the section on foreign investment, and a provision allowing the Ministry of Finance to extend the invariability period under qualified circumstances, even with a report from the Investment Promotion Agency. The court also struck down language related to "related projects" in the context of investment contracts. This ruling signifies a significant setback for the government's proposed fiscal framework.