This Chile tax guide covers the rules in force from 1 January 2026. Residents pay 0–40% income tax, companies a 27% First Category Tax (12.5% for qualifying SMEs) and VAT is 19%. There is no wealth tax, but inheritance tax applies. The signature hook is the three-year rule: new foreign residents are taxed only on Chilean-source income for three years. The 2026 Reconstruction Law cuts the corporate rate to 23% by 2029 and scraps capital gains tax on listed shares from 2027.
Introduction
Chile is a 4,300 km strip of land between the Andes and the Pacific, bordering Peru, Bolivia and Argentina, with around 20 million people and its capital in Santiago. It is a presidential republic with a civil-law system, an OECD member since 2010 and one of Latin America’s most stable economies, although politics has swung sharply since the 2019 protests and two rejected constitutional drafts (2022 and 2023). President José Antonio Kast took office on 11 March 2026. Spanish is the language; the climate runs from the Atacama desert to Patagonian fjords, with a Mediterranean central valley around Santiago. Living costs are moderate by OECD standards but among the highest in South America.
For internationally-mobile investors, this Chile tax guide matters because the country combines a deep treaty network and solid institutions with a genuinely useful arrival window: three years of tax only on Chilean-source income. The Ley para la Reconstrucción Nacional y el Desarrollo Económico y Social, approved by Congress on 4 August 2026 and cleared by the Constitutional Court on 2 October 2026, adds a falling corporate rate, full integration of company and shareholder taxes by 2030 and a 0% capital gains rate on listed Chilean shares from 1 January 2027. At the time of writing it was awaiting promulgation and publication in the Diario Oficial.
Direct Taxes
Chilean residents and domiciled individuals are taxed on worldwide income; non-residents only on Chilean-source income. Residence arises after more than 183 days in Chile within any 12-month period, or by establishing domicile (the intention to stay). Personal income tax is progressive: each slice of income is taxed at its own band, with bands set in UTA (Unidad Tributaria Anual), an inflation-indexed unit. Companies incorporated in Chile are resident. The key concept for investors is the three-year rule in Article 3 of the Income Tax Law: a foreigner who becomes resident or domiciled pays Chilean tax only on Chilean-source income for the first three years after arrival, a period the SII can extend in qualifying cases.
Personal income tax (2026 bands)
| Annual taxable income (CLP, USD) | Rate |
|---|---|
| Up to 13.5 UTA — CLP 11,688,462 (~$11,900) | 0% |
| 13.5–30 UTA — CLP 11,688,462–25,974,360 (~$11,900–$26,500) | 4% |
| 30–50 UTA — CLP 25,974,360–43,290,600 (~$26,500–$44,100) | 8% |
| 50–70 UTA — CLP 43,290,600–60,606,840 (~$44,100–$61,700) | 13.5% |
| 70–90 UTA — CLP 60,606,840–77,923,080 (~$61,700–$79,400) | 23% |
| 90–120 UTA — CLP 77,923,080–103,897,440 (~$79,400–$105,800) | 30.4% |
| 120–310 UTA — CLP 103,897,440–268,401,720 (~$105,800–$273,400) | 35% |
| Over 310 UTA — above CLP 268,401,720 (~$273,400) | 40% |
The bands apply to the Global Complementario (annual tax on all income) and, in monthly UTM terms, to the Impuesto Único withheld from salaries. Peso amounts use the October 2026 UTA of CLP 865,812 (~$882); the final 2026 bands use the December 2026 UTA, so they will be slightly higher. The 40% top band dates from the 2020 Modernisation Law (Ley 21.210), which raised the old 35% ceiling; the Reconstruction Law leaves personal rates unchanged. Freelancers issuing fee receipts (boletas de honorarios) suffer a 15.25% withholding in 2026 (16% in 2027, 17% in 2028), credited against their annual tax and social contributions.
Corporate income tax
| Item | Rate |
|---|---|
| First Category Tax, general regime (commercial year 2026) | 27% |
| General regime under the Reconstruction Law (2027 / 2028 / from 2029) | 25.5% / 24% / 23% |
| Pro Pyme SME regime (2025–2027, transitional) | 12.5% |
| Pro Pyme SME regime (2028 / from 2029) | 15% / 23% |
| Pro Pyme transparent regime | 0% at company level — profits taxed in owners’ hands |
| Combined company + top-band owner burden, general regime (2026) | ~49.45% |
Chile runs a semi-integrated system: the 27% First Category Tax is a prepayment, but resident owners of general-regime companies may credit only 65% of it against their personal tax (35% must be “restituted”). The Reconstruction Law phases restitution out (30% in tax year 2028, 20% in 2029, nil from 2030), so the combined top burden falls towards 40%. The Pro Pyme regime, open to firms with average annual turnover of up to 75,000 UF (~CLP 3.08bn, ~$3.14m), is already fully integrated; its 12.5% rate, set by Ley 21.755, is conditional on paying the new employer pension contributions. Withholding tax (Impuesto Adicional) on dividends to non-residents is 35% with a credit for corporate tax: an effective 35% for treaty residents and 44.45% for non-treaty residents until full integration. Interest paid abroad generally bears 35% (4% on qualifying loans from foreign banks) and royalties 30%, both commonly reduced by Chile’s 37 treaties, including with the US (applied since 1 January 2024). There is no participation exemption, tax losses carry forward indefinitely, and statutory rates sit well above the OECD Pillar Two 15% floor for groups with revenue of €750m (~$840m) or more.
Social security and health contributions
| Contribution | Employee | Employer | Self-employed |
|---|---|---|---|
| Pension (AFP individual account) | 10% + AFP fee (~0.5–1.5%) | — | 10% + AFP fee |
| Employer pension contribution (Ley 21.735, incl. disability and survivors insurance) | — | 3.5% (from August 2026) | — |
| Health (Fonasa or Isapre) | 7% | — | 7% |
| Unemployment insurance (AFC) | 0.6% (open-ended contracts) | 2.4% open-ended / 3% fixed-term | — |
| Work-accident insurance + SANNA | — | 0.93% + 0–3.4% risk surcharge | 0.93% + risk surcharge |
Pension, health and work-accident contributions are capped at a monthly salary of 90 UF (~CLP 3.70m, ~$3,770); the unemployment-insurance cap is 135.2 UF (~CLP 5.56m, ~$5,670). The 2025 pension reform raises the employer contribution each August — 4.25% in 2027, 5% in 2028 — until it reaches 8.5% in August 2033. The self-employed contribute on 80% of their annual gross fees through the honorarios withholding. Foreign professionals covered by a home-country pension scheme can, under conditions, be exempted from Chilean pension contributions (Ley 18.156 — confirm eligibility case by case).
Indirect Taxes
Chile’s VAT (Impuesto al Valor Agregado, DL 825) is a single-rate system with no reduced rates and is the country’s largest tax. Since 2023 it applies to most services as well as goods; foreign digital services have been taxed since 2020.
Value-added tax (VAT)
| Rate | Applies to (examples) |
|---|---|
| 19% (standard) | Most goods and services, digital services from abroad, first sale of new property by developers |
| Exempt | Education, passenger transport, unfurnished residential rent, most financial interest |
| 0% (exports) | Exported goods and qualifying exported services |
| Temporary exemption | First sale of completed new homes for 12 months from the second month after the Reconstruction Law is published |
There is no reduced rate for food, medicines or hospitality, which makes 19% one of the higher VAT burdens in the region. The temporary new-home exemption applies regardless of value or size, provided the property had its final building permit when the law was published.
Excise and other indirect taxes
| Tax | Notes |
|---|---|
| Luxury goods tax | 15% on items such as jewellery, gold and platinum articles and fine furs, on top of VAT |
| Alcohol | 31.5% on spirits; 20.5% on wine and beer |
| Sugary drinks | 18% (high sugar) or 10% |
| Tobacco and fuels | Specific taxes; tobacco also ad valorem |
| Green tax | One-off levy on new light vehicles based on emissions and price |
| Stamp duty (Timbres y Estampillas) | 0.066% per month of term, capped at 0.8%, on loans and credit documents; 0.332% on sight instruments |
| Property transfer | No transfer tax on resales — only notary and registry fees |
Other Taxes Worth Knowing
| Tax | Chile treatment |
|---|---|
| Capital gains tax | Listed shares with stock-market presence: 10% single tax, 0% from 1 January 2027 (Reconstruction Law). Property sold by individuals: first 8,000 UF (~CLP 329m, ~$335,200) of lifetime gains exempt; excess at Global Complementario rates or a 10% single tax (residents). Other assets: ordinary rates |
| Dividends (resident individual) | Global Complementario 0–40%, with credit for 65% of corporate tax (100% from Pro Pyme companies; 100% for all from 2030) |
| Interest (resident individual) | Global Complementario 0–40% |
| Rental income | Global Complementario 0–40%; DFL-2 small-home regime; new 5% single tax on rents from small homes (≤90 m²) from 2027 for third and later properties |
| Wealth / net worth tax | None — but see property surcharge below |
| Inheritance / estate tax | 1%–25% progressive per heir; spouse, parents and descendants exempt up to 50 UTA (~CLP 43.3m, ~$44,100); +20% surcharge for siblings and cousins, +40% for others |
| Gift tax | Same 1%–25% scale; 5 UTA (~CLP 4.33m, ~$4,400) exemption for close family; temporary 50% cut for 12 months under the Reconstruction Law |
| Immovable property tax (annual) | 0.893% of fiscal value up to CLP 220.4m (~$224,500), 1.042% above; first CLP 61.7m (~$62,900) of a home exempt; surcharge 0.075%–0.425% on aggregate holdings above 670 UTA (~CLP 580m, ~$591,000) |
The capital gains picture is the most investor-friendly part of the system: the property exemption is generous and, once the reform applies, Chilean listed equities and qualifying fund units become tax-free on disposal. Inheritance tax is the main sting, and Chilean-domiciled estates must include assets held abroad. From 1 January 2027 owners aged over 65 will pay no property tax on their main home. A typical resident investor with a foreign portfolio pays nothing in Chile on it during the three-year window and ordinary progressive rates afterwards.
Disadvantages & Risks
Chile’s institutions are strong but its politics are polarised. The 2019 unrest, two failed constitutional processes and an opposition challenge to the Reconstruction Law before the Constitutional Court show that tax policy can swing with each government: today’s cuts could be reversed by a future majority. The economy is concentrated in copper and lithium, which ties growth and public finances to commodity cycles, and the peso is volatile — the official rate moved from around CLP 854 per dollar in February 2026 to about CLP 982 in October 2026. The country also faces real earthquake and wildfire risk; the January 2026 fires in Biobío and Ñuble are what the Reconstruction Law’s spending is meant to repair.
On the compliance side, Chile is not on the EU list of non-cooperative jurisdictions or the FATF grey list, and as an OECD member it exchanges information automatically. The SII is a capable, data-driven tax authority with a general anti-avoidance rule and controlled foreign company rules for passive income held offshore. The system itself is complex: semi-integration, inflation-indexed units (UF, UTM, UTA) and multiple corporate regimes make good local advice essential. The three-year window ends abruptly, after which worldwide income is taxed at up to 40%, and the inheritance tax applies to worldwide assets of domiciled individuals.
Strategy & Ideal Profile
The structure that works best for a newcomer is to keep foreign investment income and foreign companies outside Chile during the three-year window, while running any Chilean business through a Pro Pyme company. At 12.5% until 2027 (15% in 2028), and with an optional deduction of up to 50% of profits kept invested in the business (capped at 5,000 UF, ~CLP 206m, ~$209,500), retained earnings are taxed lightly and are fully creditable when distributed. Large projects of US$50m (~CLP 49.1bn) or more can lock in today’s tax regime for 10, 15 or 20 years (for investments of at least US$50m, US$100m or US$350m) in exchange for a 1.5-point premium on the corporate rate. Residents with undeclared foreign assets also get a one-off window to regularise them at 10%, or 7% if the money is brought to Chile for at least five years.
It suits foreign entrepreneurs relocating with an established business abroad, who get three years of source-only taxation; company owners building a Chilean operating company under Pro Pyme; investors in Chilean equities, who will pay 0% on listed gains from 2027; and property buyers, thanks to the 8,000 UF (~$335,200) exemption on gains. In practice, the residency rule is purely day-based: spend more than 183 days in Chile in any rolling 12 months and you are resident, and you stop being taxable only once you have lost both residence and domicile.
It does not suit long-term passive investors with large foreign portfolios, since worldwide income is taxed at up to 40% after year three, nor estate planners who want to avoid inheritance tax, which reaches 25% plus surcharges. Retirees gain little, as foreign pensions become taxable after the window. The headline corporate cuts also phase in slowly — 27% still applies in 2026 — and depend on the reform surviving future governments.
FAQ
Is Chile a tax haven?
No. Chile is an OECD member with a 27% corporate rate in 2026, progressive personal tax up to 40%, 19% VAT and inheritance tax. It is not on the EU or FATF lists and exchanges tax information automatically.
What is the corporate tax rate in Chile in 2026?
27% for the general regime and 12.5% for qualifying SMEs under Pro Pyme. Under the Reconstruction Law the general rate falls to 25.5% in 2027, 24% in 2028 and 23% from 2029, while the SME rate goes to 15% in 2028 and 23% from 2029.
How does the three-year rule for foreigners work?
A foreign national who becomes resident or domiciled in Chile is taxed only on Chilean-source income for the first three years after arrival, extendable by the SII in qualifying cases. After that, worldwide income is taxed. During the window the person is not treated as a Chilean resident for treaty purposes.
What is the 183-day rule?
You become tax resident once you have spent more than 183 days in Chile, continuously or not, within any 12-month period. Domicile (intention to settle) can also make you resident, and leaving requires losing both residence and domicile.
Does Chile tax capital gains?
Yes, but with major exemptions. Listed shares with stock-market presence bear a 10% single tax until 31 December 2026 and 0% from 2027. Individuals’ gains on Chilean property are exempt up to 8,000 UF (~CLP 329m, ~$335,200) over their lifetime.
Is there inheritance or wealth tax in Chile?
There is no wealth tax, though owners of property worth more than 670 UTA (~CLP 580m, ~$591,000) pay a surcharge. Inheritance and gift tax apply at 1%–25%, with a 50 UTA (~CLP 43.3m, ~$44,100) exemption per close heir on inheritances.
How are dividends taxed for a non-resident investor?
Through 35% Impuesto Adicional with a credit for the corporate tax already paid. Residents of treaty countries bear 35% in total; residents of non-treaty countries bear 44.45% until full integration removes the difference by 2030.
Sources
All figures should be checked against the primary government sources below.
- Servicio de Impuestos Internos (SII) — UTM/UTA values 2026, income tax tables — sii.cl
- SII — Circular N° 53 of 2025, Pro Pyme transitional rates (Ley 21.755) — sii.cl
- SII — property tax rates and exemptions, second half 2026 — sii.cl
- SII — fee-receipt withholding 2026 — sii.cl
- SII — tax treaties in force — sii.cl
- SII — inheritance and gift tax (Ley 16.271) — sii.cl
- Superintendencia de Pensiones — 2026 contribution ceilings and employer contribution schedule — spensiones.cl
- Dirección del Trabajo — unemployment insurance ceiling 2026 — dt.gob.cl
- Superintendencia de Seguridad Social (SUSESO) — work-accident and SANNA contribution rates — suseso.gob.cl
- Ministerio de Hacienda — tax policy and Reconstruction Law — hacienda.cl
- Biblioteca del Congreso Nacional (LeyChile) — Income Tax Law (DL 824), VAT Law (DL 825), Ley 21.210, 21.420, 21.735, 21.755 — bcn.cl
- Banco Central de Chile — dólar observado and UF used for USD conversions — bcentral.cl
USD figures are indicative conversions at ~CLP 982 = US$1 (1 CLP ≈ US$0.00102; Banco Central de Chile dólar observado, 9 October 2026) and rounded. UF and UTA amounts use October 2026 values (UF CLP 41,131, ~$41.90; UTA CLP 865,812, ~$882).
Last verified: 10 October 2026.
This is general information, not personal tax or legal advice. Tax outcomes depend on your specific facts; consult a qualified Chile tax adviser before acting.
Related guides: Andorra · Argentina · Australia · Bahamas · Botswana · Brunei · Bulgaria · Ceuta and Melilla · China · Costa Rica · Cyprus · Denmark · Dominican Republic · El Salvador · Estonia · Florida · Georgia · Gibraltar · Greece · Hawaii · Hong Kong · Iceland · Indonesia · Isle of Man · Italy · Jersey · Kuwait · Latvia · Macau · Malta · Mauritius · Monaco · Montenegro · Morocco · New Zealand · Panama · Paraguay · Philippines · Portugal · Puerto Rico · Romania · Sark · Seychelles · Singapore · South Korea · Taiwan · Thailand · Ticino · UAE · Uruguay · Zug