On Wednesday, September 2, 2020, Law 21.256 was enacted, which establishes tax measures that are part of the emergency plan for economic and employment reactivation, within a framework of medium-term fiscal convergence. The initiative contains important measures that will benefit varietal replacement in the short term.

We spoke with Jorge Nanjarí, from Viveros Sunnyridge, former president of the Asociación Gremial de Viveros, to explain the scope and benefits that the measure grants to producers, in the perspective of acquiring new plants and changing varieties in their orchards for those that offer them greater competitive advantages.

Who benefits from this measure?

• This is a transitory measure that benefits taxpayers who declare the first category tax on effective income, in accordance with the Income Tax Law, and who acquire, in the period between June 1, 2020 and June 31, December 2022, intangible assets intended for the interest, development or maintenance of the company or business. If they do the above, they will be able to depreciate said assets instantly and in full, in the same business year in which they are acquired, which will be valued at 1 peso.

What intangible assets?

• Within the framework of this Law and for these purposes, only the following will be considered intangible assets eligible for the regime provided for in this measure:

1. Protected industrial property rights, in accordance with Law No. 19.039
2. Protected intellectual property rights, in accordance with Law No. 17.336
3. A new protected plant variety, in accordance with Law No. 19.342.

The president of Sunnyridge considers that what is relevant, in relation to the purchase of new plant varieties, is that the Agricultural and Livestock Service (SAG) maintains a Registry of Protected Varieties, so that all the varieties indicated there may be eligible for this benefit.

Can you provide an example that clarifies these benefits for us?

• As you should know, the plants are amortized according to tables available for this purpose by the Internal Revenue Service (SII).

Until before this Law, an almond plant was amortized in 18 years, a blueberry plant and a raspberry plant in 13 years, however, with this measure, a new variety protected under Law No. 19.342 will be amortized in the same year. in which it is acquired, with the consequent effects on the balance sheet, payment of taxes and cash flow, and will be valued at 1 peso.

How have the nurseries been prepared in relation to this Law?

• In our case, we have sent mails informative to all our clients, on how this Law operates, since it is relevant that farmers inform themselves and choose varieties contained in the Registry of Protected Varieties of the SAG (over those that are not in the Registry) to qualify for the benefits of this Law.

As information, Nanjarí continues, the SAG Variety Registry contains almost 700 different varietal options, of over 25 different fruit species, in such a way that farmers have a great variety of options to make an informed decision.

How has the initial response of farmers to this benefit been?

• There have been many questions about how the Law operates, which is a very good sign. We have had to hold meetings with accountants and lawyers to understand it ourselves, and to be able to better explain to farmers with examples that show them on paper the benefits they will obtain.

"The good thing is that the benefits are for companies of all sizes, so we hope that this will translate into important plant sales, and that it will serve to accelerate the necessary varietal replacement in Chile for new varieties," concludes the Viveros executive Sunnyridge.