Xile flag Xile: Entorn econòmic

Impostos a Xile

Tax Rates

Consumption Taxes

Nature of the Tax
Impuesto al Valor Agregado o IVA (Value-Added Tax or VAT, in English).
Tax Rate
19%
Reduced Tax Rate
No reduced rates apply; however, certain products/services are exempt of VAT (see above).
Other Consumption Taxes
Specific items are subject to taxes imposed under the VAT law ranging from 10% to 50%, including jewelry (15%); alcoholic beverages (from 20.5% for fermented to 31.5% for distilled); soft drinks with high sugar content (18%); other natural or artificial soft drinks, including energy or hypertonic drinks (10%); and 50% over the first sale or import of pyrotechnic items.
 
Find out more about Taxes and Accounting in Chile on GlobalTrade.net, the Directory for International Trade Service Providers.
 

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Corporate Taxes

Company Tax
27%
Tax Rate For Foreign Companies
Resident companies are taxed on their worldwide income, whereas non-domiciled or non-resident companies are taxed only on their Chilean-sourced income.
Final shareholders are subject to a 35% flat rate applied by way of withholding upon receipt of a taxable distribution. The tax on corporate income is totally creditable against final tax in the SME regime, but only 65% is creditable in the partially integrated system. Nevertheless, foreign owners of a partially integrated system entity that are resident in a double taxation treaty jurisdiction are entitled to full credit as well.
Capital Gains Taxation
Capital gains are subject to standard corporate tax but may be exempt based on certain criteria: the length of time the shares are held, the usual or occasional nature of the purchase or resale of shares and the relationship between the seller and the buyer. Gains derived certain securities are subject to a preferential tax treatment (i.e. investment funds’ quotas listed on an authorised stock exchange market, stock of listed local companies, mutual funds’ quotas if the fund invests in stock trade values, etc.).
Main Allowable Deductions and Tax Credits
In general, expenses incurred to generate taxable income can be deducted.
Deductible expenses include net operating losses, payments to foreign affiliates, taxes (not including income taxes). Subject to conditions, interest expenses can be deducted. Under certain circumstances, bad debts and charitable donations (up to 5% of the company's net taxable income) can be deductible. The deductibility of payments made abroad for the use of trademarks, patents, formulas, and consulting and other similar services is limited to a maximum of 4% of the income derived from sales and services in the corresponding year. Start-up expenses can be amortised over a six-year period. Fines, penalties and the respective legal costs incurred are deductible, subject to conditions.
Losses can be carried forward indefinitely, while carrybacks are not allowed.
Other Corporate Taxes
Other taxes include a stamp tax (maximum 0.8%), municipal license fee, real property tax (0.514% on agricultural property, 1.088% on non-agricultural property, 0.933% on residential property up to a cadastral value of USD 150,000, and 1.088% on the excess; plus a progressive surcharge ranging from 0.075% to 0.275% on the taxpayer's immovable properties with a total fiscal value above USD 500,000 approximately), payroll taxes (ranging from 0% to 40% of employees' remuneration), social security contributions, as follows:

- a monthly 0.93% premium on remuneration for labour-related accident insurance
- 2.4% of the worker’s gross salary for compulsory unemployment insurance contribution
- a 1.99% premium for life and disability insurance
- additional contributions depending on the risk of the employment activity, at rates of up to 3.4%.

Other Domestic Resources
Internal Taxes Service (SII)
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Chile Latin America & Caribbean United States Germany
Number of Payments of Taxes per Year 7.0 28.2 10.6 9.0
Time Taken For Administrative Formalities (Hours) 296.0 327.5 175.0 218.0
Total Share of Taxes (% of Profit) 34.0 46.8 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Personal Income tax (employment income) Progressive rates up to 40%
The rate depends on the annual tax units (ATU), whose value in CLP is revalued each month (click here).
ATU 0-13.5 Exempt
ATU 13.5-30 4%
ATU 30-50 8%
ATU 50-70 13.5%
ATU 70-90 23%
ATU 90-120 30.4%
ATU 120-310 35%
Beyond ATU 310 40%
Allowable Deductions and Tax Credits
In general, all expenses incurred in the employer’s sole interest are duly deductible (for example travel and lodging expenses and documented entertainment).
Individuals resident in the country may deduct the interest paid for mortgage loans destined to the purchase or construction of one or more dwellings (capped at 8 annual tax units). A deduction for voluntary pension contributions is also applicable for resident employees, within a limit of 600 annual tax units. Furthermore, parents are granted a tax credit against their personal taxes for expenses related to the primary and high school studies of their children.
Special Expatriate Tax Regime
Foreigners working in Chile are subject to taxation only on their Chilean-source income during the first three years in Chile, after which worldwide income is taxed.
Resident foreigners are taxed on their salary, deducting social security contributions. Non-resident foreigners cannot deduct social security contributions before acquiring Chilean residence. Foreign individuals may be exempt from some local social security payments, provided they belong to a foreign social security entity system covering at least pension, disability, illness, and death.
A non-resident flat tax can also apply for technical or engineering work or professional services that an individual renders through a report, advice, or plan development, at a rate of 15%.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the conventions signed (in Spanish)
Withholding Taxes
Dividends paid by Chilean entities to resident individuals are subject to a global complementary income tax at progressive rates that range from 0% to 40%.  Profits distributed abroad to non-resident/non-domiciled taxpayers are subject to an additional withholding income tax of 35%
Interest: 35% (4% in some cases, like for interest on loans granted by a foreign bank or international financial institution and by an insurance company or pension fund that complies with certain registration requirements)
Royalties: 15% (invention patents, computer programs, utility models, industrial designs and drawings, blueprints or topography of integrated circuits, and of new vegetable varieties)/30% (trademarks, patents, formulae, and other similar services; and in case the beneficiary is resident in a jurisdiction with a preferential tax regime).

Special interest and royalties rates apply to residents of countries with which Chile has signed a double taxation treaty.
Bilateral Agreement
Chile and Spain are bound by a Double Taxation Agreement since 7 July 2003.
Withholding tax rates under the tax treaty are: 5%/10% for dividends, 5%/15% for interest and 5%/10% for royalties.
Download the treaty in Spanish.

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Find out more about Taxes and Accounting in Chile on GlobalTrade.net, the Directory for International Trade Service Providers.

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Actualitzacions: May 2022

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