This paper analyzes the effects of the 2014-2015 Chilean tax reform on firms' valuation and incentives to retain earnings and finance their operations with equity versus debt. By analyzing the effects of the reform on total taxes paid and cash flows received by investors, the paper concludes that in general the reform reduces the value of firms and lessens the incentives to retain earnings. Also, simulations show that the majority of firms would choose the accrual or 'attributed' tax based

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... m. However, if the latter is not permitted firms will choose debt over equity. The cash-based or semi-integrated system becomes the preferred option only when tax avoidance is possible. JEL Classification: D92, G32, G35, H24, H26. Resumen Este trabajo estudia los efectos de la reforma tributaria 2014-2015 en Chile sobre el valor económico de las firmas y los incentivos a retener utilidades y financiar sus operaciones con patrimonio versus deuda. Al analizar los efectos de la reforma sobre los impuestos pagados y los flujos de caja de los inversionistas se concluye que, en general, la reforma disminuye el valor económico de las firmas y los incentivos a retener utilidades. Además, la Palabras clave: Impuestos corporativos, impuesto a la renta, dividendos, elusión, financiamiento corporativo. Clasificación JEL: D92, G32, G35, H24, H26.