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Hedging peso risk in Chile: FX forwards, swaps and options, Central Bank reporting of derivatives, and the tax rules for residents and non residents

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

Chilean companies and foreign investors can hedge the peso freely with forwards, swaps, options and futures, settled by delivery or by compensation in dollars or pesos. Derivatives with non residents, and derivatives with Chilean banks or other formal FX market entities that involve a foreign currency or rate, are reported to the Central Bank, and their payments go through the formal market. For tax, derivative income earned by non residents is generally not taxed in Chile, while Chilean companies recognize results at fair value and can deduct payments to foreign counterparties only if the contract meets conditions on venue, documentation and the counterparty's jurisdiction.

USD figures use the Central Bank exchange rate of CLP 986.58 per US dollar published in the Diario Oficial for 23 October 2026 (Ley Nº 18.840 art. 44 and CNCI Chapter I, Section VII). UF values use UF 1 = CLP 41,205.16 (23 October 2026) and UTM values use UTM 1 = CLP 72,151 (October 2026), both as published by the Servicio de Impuestos Internos. Conversions are for orientation only.

Key facts

Derivatives reported to the Central Bank	With non residents, and with formal market entities when a foreign currency or rate is involved textCNCI Chapter I, Annex Nº 2, as of 2026-10-26 · in force
Chilean income tax on derivative income of non residents	None, except derivatives settled by physical delivery of Chilean shares textLey Nº 20.544 art. 3, as of 2026-10-26 · in force
Tax recognition for full accounting taxpayers	Fair value at signing and at each year end textLey Nº 20.544 art. 5 Nº 4, as of 2026-10-26 · in force

The rule

1. Operations with derivatives with persons domiciled or resident abroad, and derivatives on foreign underlyings carried out in Chile with formal market entities, are among the operations that must go through the formal market and be reported, using the reporting system of Chapter III.D.3 of the Central Bank's Financial Regulations Compendium (CNF).FX Compendium (CNCI) approved by Central Bank Agreement Nº 2617-03-240125, in force from 1 January 2026, CNCI Chapter I, Section V Nº 3 and Annex Nº 2, Nº 1 and 2, 2024-01-30 official text · verified 2026-10-26

2. With non residents, the operations arising from futures, forwards, swaps, options, credit derivatives and combinations of them, on any underlying, must be reported. In Chile, formal market entities report forwards, swaps, options and futures on interest rates or currencies (including the peso and the UF) that they sign with Chilean residents when the contract gives or may give rise to a payment in foreign currency, or when at least one currency or rate is foreign, stating whether settlement is by physical delivery or by compensation. Compensation differences may be paid in foreign currency or in pesos at the rate the parties agree. Payments to be made or received must go through the formal market.FX Compendium (CNCI) approved by Central Bank Agreement Nº 2617-03-240125, in force from 1 January 2026, CNCI Chapter I, Annex Nº 2, Nº 2, 4 and 5, 2024-01-30 official text · verified 2026-10-26

3. Derivatives settled by physical delivery of pesos may be contracted, settled and paid in pesos under the Central Bank's authorization. If a derivative leads to acquiring a foreign asset or liability payable in foreign currency, that asset or liability is reported under the general rules for foreign assets and liabilities.FX Compendium (CNCI) approved by Central Bank Agreement Nº 2617-03-240125, in force from 1 January 2026, CNCI Chapter I, Annex Nº 2, Nº 7 and Annex Nº 3, Nº 3 a), 2024-01-30 official text · verified 2026-10-26

4. For tax purposes, derivatives are forwards, futures, swaps and options and combinations of them, and other contracts whose value depends on one or more variables that are recognized or regulated as derivatives by Chilean regulators. Derivative income, including premiums, is Chilean source only when earned by Chilean residents or by permanent establishments in Chile, or when the derivative is settled by physical delivery of shares or interests in Chilean companies. Otherwise, derivative income of persons without domicile or residence in Chile is not subject to any income tax.
Example: A foreign fund that gains CLP 493,290,000 on a peso dollar forward with a Chilean bank pays no Chilean income tax on it. / US$500,000 gain to a non resident on a cash settled FX forward: no Chilean tax under Ley Nº 20.544 art. 3.Ley Nº 20.544, tax treatment of derivatives, Art. 1, art. 2 and art. 3, 2011-10-22 official text · verified 2026-10-26

5. Full accounting taxpayers record derivatives at fair value when signed and recognize the difference to fair value at the close of each year as taxable profit or deductible loss; other taxpayers recognize results when received. Commissions and premiums are deductible if they meet the general expense rules, even if outside the taxpayer's business line. Derivative income is not subject to monthly provisional payments.Ley Nº 20.544, tax treatment of derivatives, Art. 5 and art. 15, 2011-10-22 official text · verified 2026-10-26

6. Amounts a Chilean taxpayer pays or owes abroad on derivatives with foreign counterparties are deductible only if (1) the counterparty or intermediary is not in a jurisdiction on the list referred to in art. 41 D Nº 2 of the income tax law, unless that jurisdiction has an information exchange agreement in force with Chile, and (2) the derivative was contracted on a recognized Chilean exchange or a foreign exchange affiliated to IOSCO, or through supervised intermediaries, or outside exchanges under internationally used master agreement models or confirmations referring to them. Non deductible amounts are treated under art. 21 of the income tax law.Ley Nº 20.544, tax treatment of derivatives, Art. 6, 2011-10-22 official text · verified 2026-10-26

7. Derivatives with related parties must be at normal market prices and the SII may assess prices that are notoriously off market. Taxpayers must file the SII sworn statements on derivatives and keep a register of operations; derivatives not declared on time, or declared incorrectly, lose the deduction of their losses and expenses.Ley Nº 20.544, tax treatment of derivatives, Art. 11, art. 13 and art. 14, 2011-10-22 official text · verified 2026-10-26

Contract	Central Bank report	Tax for a Chilean company	Tax for a non resident
Peso dollar forward with a Chilean bank	Yes, by the bank	Fair value result taxed or deducted	Not taxed (art. 3)
Cross currency swap with a foreign bank under a master agreement	Yes	Deductible if art. 6 conditions met	Not taxed
Peso UF swap between two Chilean residents with no foreign element	No	Fair value result taxed or deducted	Not applicable
Option settled by delivery of shares of a Chilean company	Depends on counterparty	Taxed under the general rules	Chilean source income

Central Bank reporting and tax treatment of FX derivatives in Chile (CNCI Chapter I, Annex Nº 2; Ley Nº 20.544).

Worked example

A Chilean importer buys a 6 month dollar forward of US$2,000,000 (CLP 1,973,160,000) from its Chilean bank to fix its peso cost. The bank reports the contract to the Central Bank. At year end the importer books the change in fair value as taxable profit or deductible loss (Ley Nº 20.544 art. 5).
A foreign fund that holds Chilean peso bonds hedges with a non deliverable forward against a foreign bank under a master agreement. Its gains are not taxed in Chile (art. 3); the Chilean resident side, if any, reports the contract and routes payments through the formal market.

Step by step

1. Sign a master agreement with the bank or counterparty; for foreign counterparties it supports the art. 6 deduction.
2. Check that the foreign counterparty is not in a jurisdiction on the art. 41 D Nº 2 list without an information exchange agreement.
3. Make sure the contract is reported to the Central Bank (by the bank, or by the company for contracts with non residents).
4. Route settlements through the formal market.
5. Value open contracts at fair value at year end and file the SII derivatives sworn statements on time.

Common traps

Missing the SII derivatives sworn statement. Late or wrong statements cost the deduction of the related losses.
Hedging with a counterparty in a listed jurisdiction. Payments are not deductible unless there is an information exchange agreement in force.
Assuming related party hedges are free of scrutiny. They must be at market prices and the SII can reassess them.
Settling a derivative with a non resident offshore without reporting it. The Chilean party must report the contract and route payments through the formal market.

Sources

Related: Chile country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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