On August 19, 2025, a bill was introduced that creates temporary tax incentives and a new fiscal framework for the production of green hydrogen in the Magallanes Region and Chilean Antarctica.
Green hydrogen is produced from renewable energies such as solar and wind power, and unlike hydrogen derived from fossil fuels, its use only generates water vapor, making it a key fuel for advancing the country’s decarbonization.
The project creates a temporary tax benefit consisting of a credit against the First Category Tax (IDPC), which will be available to companies that purchase green hydrogen (H2V) or any of its derivatives, such as ammonia or methanol, from local producers, for a total amount of up to US$2.8 billion.
Producers who are awarded the benefit will have a period of 10 years to allocate the tax benefit to taxpayers who purchase their production, which may not exceed January 1, 2041.
Article 12 of the bill incorporates a special regime for these taxpayers, who must physically establish themselves in the territory and keep accounts to determine the final taxation of their owners. They are entitled to request the VAT exemption established in Article 12 letter B, N° 10 of the IVA Law and must pay the tax in advance within the month following the month in which the environmental qualification resolution (RCA) was obtained.
Finally, these taxpayers will not be eligible for tax benefits other than those provided for in this special regime.
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