Chile’s status as a regional pioneer of free-market economics has converted it into one of Latin America’s most globalized economies, with the highest level of human development in the region.
National tax policies have been a crucial aspect of that development and continue to foster a positive environment for doing business in Chile.
Alongside rich natural resources and a capable and educated workforce, Chile’s corporate tax rate positions the country as an attractive candidate for commercial expansion.
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Chile’s corporate tax rate and compliance requirements
The “Internal Taxes Service” is the national tax authority, overseeing Chile’s corporate tax rate. That rate is centralized and imposed on a national level, as are Chile’s other taxes.
National tax ID – Registry
All individuals or entities must obtain a local Tax Identification number or “RUT.” To be issued with a RUT, you must provide the following documents:
- Proof of power of attorney for the person overseeing the process
- Articles of incorporation
- A certificate of good standing
- A tax residence certificate
Import/export compliance requirements in Chile
Chile’s customs authority is the National Customs Service. It allows the importation of goods with a value below $1,000 (USD) ras long as the following documents can be provided:
- An entry summary declaration
- An original bill of loading (maritime), consignment note (road), or airway bill (air)
- An original commercial invoice — highlighting the item for sale and its value
- Proof of power of attorney for the person overseeing the process
- A certificate of free sale (Sanitary and Phytosanitary certificate)
- A travel certificate
When importing goods above $1,000 (USD), you must import through a customs agency.
Import tariffs
Chile applies a general tariff of 6%, while imports are subject to the payment of an ad-valorem duty that is calculated based on the CIF value (cost of goods + insurance coverage + freight transfer value).
All imported products must pay VAT based on the CIF value plus the ad-valorem duty. For some products, regional trade agreements or treaties ensure exemption from ad-valorem tariffs or offer preferential rates. All imports to Chile from the European Union enter tariff-free.
Chile’s local taxes
Chile’s Corporate Income Tax
For entities with a gross income below $2,300,000 (USD) or equity below $2,800,000 (USD), zero corporate tax is imposed, with the company solely paying a tax at a rate of around 35% at the point of withdrawal.
For small and medium-sized businesses, a 25% rate is imposed with the possibility to credit costs and expenses to lower the taxable base.
Entities with a gross income above $2,300,000 (USD) or equity above $2,800,000 (USD) pay a 27% rate with a similar opportunity to credit costs and expenses to lower the taxable base.
Monthly Provision Payments
Each newly registered entity must pay a monthly rate of 1% of the total gross sales as a provision of its Corporate Income Tax responsibilities.
Final/Withdrawal tax for shareholders
For Chilean tax residents, income tax is banded as follows (all $ values in USD):
| Income | Rate |
| $ 0 — 9,659 | 0% |
| $ 9,659 — 21,464 | 4% |
| $ 21,464 — 35,773 | 8% |
| $ 35,773 — 50,082 | 13,5% |
| $ 50,082 — 64,391 | 23% |
| $ 64,391 — 85,855 | 30% |
| $ 85,855 — 107,319 | 35% |
| Above $ 107,319 | 40% |
For non-Chilean tax residents, it is generally a 35% tax rate, while the standard rate of VAT is 19%.
Employers must also pay social security and “payroll taxes” for their employees, which include:
- Accident fund: 0.93%
- Disability fund: 1.53%
- Unemployment fund: 2.4%
Other taxes according to Chile’s corporate tax rate
Fuel Tax:
VAT (19%) + $1 (USD) per liter of Diesel fuel or $2 (USD) per liter of regular fuel.
Real Estate Tax:
Paid in 4 stages throughout the year, with rates between 0.9% and 1.3% of the value of the property.
Other Taxes:
Tax on bank loans is set at 0.6% of the amount being loaned.
International taxes
Chile – Argentina treaty:
When distributing dividends from Argentina to Chile, the paying entity will withhold a 10% tax.
Chile – Colombia treaty:
There is a 0% to 7% income tax withholding rate when making payments from Chile to Colombia.
Transfer prices
The increase of the taxable base is subject to a 35% tax.
Understand Chile’s corporate tax rate with professional support
Chile’s corporate tax rate makes the country attractive to businesses looking to expand in Latin America. But understanding it and managing it to your advantage is best done with locally-based professional support. At Biz Latin Hub, we have legal and accounting professionals throughout Latin America, who can support you through all aspects of your business venture in the region.
Reach out today for personalized and professional advice from our team.
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