Income Tax

General aspects and rates of the income tax law in Chile

General Terms

The taxation of income in Chile is determined by two factors: the taxpayer's residency and the source of the income.

Residents

Residents, including both individuals and entities, are taxed on their worldwide income with the exception of foreign individuals who only pay taxes on Chilean-source income for the first three years, which can be extended.

Non-Residents

Nonresidents are taxed only on Chilean-source income, such as income from assets or activities within Chile, except for services provided to Chilean residents.

A Chilean-based company is taxed on its global income.

Foreign-source income is included in the taxable income, but may be subject to different computation rules depending on the circumstances, such as the application of control rules or being a branch or permanent establishment abroad.

Capital gains from the sale of shares, bonds, or securities in Chilean companies are also considered Chilean-source income, regardless of the residency of the seller, with certain requirements for indirect disposals.

Nonresident taxpayers may face a 35% profit tax on capital gains, which may be subject to variation due to double taxation treaties or exemptions, allowing discounts on this rate.

Income tax law is divided into two types: Category Taxes and final taxes.

Jump to:

Category Taxes

Learn about First and Second Category taxes

Final Taxes

Category Taxes

Final Taxes

The final taxes apply to the total income of both categories and include the Global Complementary Tax for individuals resident in Chile and the Additional Tax for nonresident companies or individuals. Profits from companies owned by nonresident shareholders or partners are subject to this tax when withdrawn, distributed as dividends, or sent abroad.