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Offshore sales of holding companies with Chilean assets: the indirect transfer tax, its thresholds and the buyer's exposure

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Last verified: 2026-10-26 · Status: Stable

Selling a foreign company abroad can still be taxed in Chile if a large enough part of its value comes from Chilean companies, a Chilean branch or Chilean assets. The tax is 35 percent on the Chilean portion of the gain, triggered when Chilean assets are at least 20 percent of value or worth 210,000 UTA or more and at least 10 percent of the foreign entity changes hands, with tighter rules for tax havens. The buyer must withhold 20 percent of the price or 35 percent of the gain, and if nobody pays the SII can assess the buyer and hold the Chilean company jointly liable.

USD figures use the Central Bank exchange rate of CLP 986.58 per US dollar published in the Diario Oficial for 23 October 2026 (CNCI Chapter I, Title VII). UF and UTA values are the SII figures for October 2026 (UF 41,221.08 on 26 October; UTA CLP 865,812). Conversions are for orientation only.

Key facts

Tax on indirect transfer of Chilean assets by non residents	35 %DL Nº 824, art. 10 and art. 58 Nº 3, as of 2026-10-26 · in force
Indirect transfer test: share of value from Chilean underlying assets	20 %DL Nº 824, art. 10 letter a), as of 2026-10-26 · in force
Indirect transfer test: value of Chilean underlying assets	210000 UTADL Nº 824, art. 10 letter b), as of 2026-10-26 · in force
Minimum stake of the foreign entity sold in 12 months (group wide)	10 %DL Nº 824, art. 10 letters a) and b), as of 2026-10-26 · in force
Buyer's provisional withholding on price in an indirect transfer	20 %DL Nº 824, art. 74 Nº 4, as of 2026-10-26 · in force
Look back period for the value and stake tests	12 monthsDL Nº 824, art. 10, as of 2026-10-26 · in force

The rule

1. A non resident that sells shares, quotas, convertible bonds or other rights representing the capital of a foreign entity is taxed in Chile when (a) at least 20 percent of the market value of what it holds in that entity, at the sale date or in any of the 12 prior months, comes from Chilean underlying assets: shares or interests in Chilean companies, funds or entities, a Chilean branch or permanent establishment, or any movable or immovable asset in Chile owned by a non resident entity; or (b) the Chilean underlying assets, in proportion to the seller's indirect interest, are worth 210,000 UTA or more at the sale date or in the prior 12 months. In both cases at least 10 percent of the foreign entity must be sold, counting all sales by the seller and other non resident members of its business group in the 12 months before the last sale.
Cost to do it: 35 percent of the Chilean portion of the gain, under art. 58 Nº 3.
Example: 210,000 UTA at the October 2026 UTA of CLP 865,812 is CLP 181,820,520,000; the test uses the UTA value at the sale date. / 210,000 UTA is about US$184.3 million at October 2026 values.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, Art. 10, third paragraph, letters a) and b), 1974-12-31 official text · verified 2026-10-26

2. If the foreign entity sold is domiciled or incorporated in a preferential tax regime under art. 41 H, any percentage of Chilean value triggers the tax, unless the seller, its Chilean representative or the buyer proves to the SII that no Chilean resident holds 5 percent or more of what is sold and that the owners controlling 50 percent or more of its capital or profits are not resident in a preferential regime; in that case only tests (a) and (b) apply.
Cost to do it: 35 percent of the Chilean portion of the gain; cost of the ownership evidence for the exception.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, Art. 10, third paragraph, letter c), 1974-12-31 official text · verified 2026-10-26

3. In valuing the Chilean underlying companies and branches, foreign investments held by them at the sale date and liabilities incurred to acquire those investments still unpaid are excluded. Sales made abroad within a reorganization of the business group, as defined in art. 96 of Ley Nº 18.045, are not taxed provided they produce no income or gain for the seller computed under art. 58 Nº 3.
Cost to do it: No tax on a qualifying group reorganization that produces no gain.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, Art. 10, fifth and final paragraphs, 1974-12-31 official text · verified 2026-10-26

4. The tax is a single 35 percent tax. The seller chooses the taxable income between (a) the price less its acquisition cost, multiplied by the share of the price represented by the market value of the Chilean underlying assets, or (b) the part of the price corresponding to the Chilean underlying assets less their tax cost to their direct foreign owners, computed as if they had been sold directly. If the seller cannot reliably prove its acquisition cost, the SII uses method (b) with the information it has. The seller may instead opt for the tax treatment that a direct sale of the Chilean assets would have had, including any non taxable income rule.
Cost to do it: 35 percent of the taxable income chosen.
Example: Holding sold for CLP 49,329,000,000 with acquisition cost CLP 19,731,600,000; Chilean assets are 60 percent of value. Method (a): (CLP 49,329,000,000 less CLP 19,731,600,000) times 60 percent is CLP 17,758,440,000; tax CLP 6,215,454,000. / Price US$50,000,000, cost US$20,000,000, Chilean share 60 percent: taxable income US$18,000,000, tax US$6,300,000.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, Art. 58 Nº 3, first, second, third and final paragraphs, 1974-12-31 official text · verified 2026-10-26

5. The non resident seller declares and pays the tax on an accrual basis under art. 65 Nº 1 and art. 69, and may treat the income as sporadic under art. 69 Nº 3. This filing is not required if the buyer withheld the full tax. If the tax is not declared and paid, the SII may, after a summons, assess the buyer of the foreign shares, and the Chilean company whose shares are the underlying asset, or the Chilean branch, is jointly liable. The SII may require the seller, its Chilean representative, the Chilean entity or the buyer to file a declaration with the price and the market value of the Chilean assets.
Cost to do it: The buyer and the Chilean company are exposed for the unpaid tax plus interest and penalties.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, Art. 58 Nº 3, fourth, fifth and sixth paragraphs, 1974-12-31 official text · verified 2026-10-26

6. In these offshore sales the buyer withholds a provisional 20 percent of the total amounts paid to the seller, with no deduction, or 35 percent of the taxable income determined under art. 58 Nº 3 letter (b), and declares the withholding under art. 65 Nº 1 and art. 69 or under art. 79, at the taxpayer's choice.
Cost to do it: 20 percent of the price or 35 percent of the method (b) income, withheld by the buyer.
Example: On a CLP 49,329,000,000 price the gross withholding is CLP 9,865,800,000. / On a US$50,000,000 price, 20 percent is US$10,000,000, against US$6,300,000 at 35 percent of an US$18,000,000 method (b) income.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, Art. 74 Nº 4, final paragraph, 1974-12-31 official text · verified 2026-10-26

Test	Chilean value trigger	Stake sold	Notes
a) Share of value	20 percent or more of the market value of the seller's holding	10 percent or more over 12 months, group wide	Proportional to the seller's indirect interest
b) Absolute value	Chilean underlying assets worth 210,000 UTA or more	10 percent or more over 12 months, group wide	About US$184.3 million at October 2026 UTA
c) Preferential tax regime entity	Any percentage	Not required	Exception if no Chilean holder of 5 percent and 50 percent controllers outside preferential regimes

Indirect transfer tests (DL Nº 824 art. 10). All value tests are measured at the sale date or in any of the 12 prior months.

Item	US$	CLP
Price of the foreign holding	50,000,000	49,329,000,000
Seller's acquisition cost	20,000,000	19,731,600,000
Market value of Chilean subsidiary (60 percent of value)	30,000,000	29,597,400,000
Method (a) taxable income: (50M less 20M) x 60%	18,000,000	17,758,440,000
Tax cost of the Chilean subsidiary to its direct owner	12,000,000	11,838,960,000
Method (b) taxable income: 30M less 12M	18,000,000	17,758,440,000
Tax at 35 percent	6,300,000	6,215,454,000
Buyer's gross withholding at 20 percent of price	10,000,000	9,865,800,000

Worked example: method (a) versus method (b) (DL Nº 824 art. 58 Nº 3). CLP at 986.58.

Worked example

A foreign group sells all the shares of an offshore holding for US$50,000,000 (CLP 49,329,000,000). The holding's main asset is a Chilean operating company worth US$30,000,000 (CLP 29,597,400,000), 60 percent of total value, so test (a) is met and the 10 percent stake test is met by the sale of 100 percent.
Under either method the taxable income here is US$18,000,000 (CLP 17,758,440,000) and the tax is US$6,300,000 (CLP 6,215,454,000) (DL Nº 824 art. 58 Nº 3).
Unless the seller declares and pays, the buyer should withhold 20 percent of the price, US$10,000,000 (CLP 9,865,800,000), or 35 percent of the method (b) income (art. 74 Nº 4); otherwise the SII may assess the buyer and the Chilean company is jointly liable.
If the seller is resident in a treaty country, the treaty's capital gains article decides whether Chile keeps this right. Where an Argentine holding or seller is involved, check the Chile Argentina treaty listed by the SII; Argentine tax on the same sale is covered in the Argentine guide.

Step by step

1. Map every Chilean underlying asset of the group being sold, with market values at the sale date and for each of the prior 12 months (DL Nº 824 art. 10).
2. Exclude foreign investments held by the Chilean entities and the unpaid debt used to buy them, under the SII rules (art. 10).
3. Count all sales of the foreign entity by the seller's group in the prior 12 months for the 10 percent test.
4. Check whether the entity sold is in a preferential tax regime under art. 41 H and, if so, gather the 5 percent and 50 percent ownership evidence.
5. Choose method (a) or (b), or the direct sale regime, and document acquisition cost; without proof the SII applies method (b) (art. 58 Nº 3).
6. Agree in the purchase agreement whether the buyer withholds 20 percent of the price or 35 percent of the method (b) income, or whether the seller files and pays itself, and give the Chilean company an indemnity because it is jointly liable.

Common traps

The tests look back 12 months, so a pre sale restructuring that dilutes the Chilean share of value may not help (DL Nº 824 art. 10).
Group members' sales are aggregated for the 10 percent stake test, so selling in small slices does not avoid it (art. 10).
The Chilean target company is jointly liable for the seller's tax even though it is not a party to the sale (art. 58 Nº 3).
Without proof of acquisition cost the seller loses the choice of method (art. 58 Nº 3).
The group reorganization exemption applies only if the reorganization produces no gain for the seller (art. 10, final paragraph).

Sources

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