Countries › Chile › Guide › 6. Taxes › Corporate income tax in Chile: the first category tax, its regimes, the rate cut to 23 percent, deductions and monthly prepayments

Corporate income tax in Chile: the first category tax, its regimes, the rate cut to 23 percent, deductions and monthly prepayments

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

Chilean companies and branches pay the first category tax on taxable profit: 27 percent for 2026, falling to 25.5 percent in 2027, 24 percent in 2028 and 23 percent from 2029 under Ley Nº 21.850 of 17 October 2026. Qualifying SMEs in the Pro Pyme regime pay 12.5 percent for 2025 to 2027 and 15 percent in 2028, or can opt out of corporate tax entirely under the transparency regime. Taxable profit is accounting profit adjusted by the tax rules on necessary expenses and depreciation, the tax is prepaid monthly and settled in the April return, and expenses that benefit owners or are not proven bear a 40 percent penalty tax.

USD figures use the Central Bank exchange rate of CLP 986.58 per US dollar published in the Diario Oficial of 23 October 2026 (Ley Nº 18.840 art. 44). Tax units use the SII values of UTM CLP 72,151 and UTA CLP 865,812 for October 2026 and UF CLP 41,221.08 for 26 October 2026. Conversions are for orientation only.

Key facts

Corporate income tax, general first category rate (commercial year 2026)	27 %Ley Nº 21.850, sixth transitory article, as of 2026-10-26 · in force
Corporate income tax, general rate for commercial year 2027	25.5 %Ley Nº 21.850, sixth transitory article, as of 2026-10-26 · pending
Corporate income tax, general rate for commercial year 2028	24 %Ley Nº 21.850, sixth transitory article, as of 2026-10-26 · pending
Corporate income tax, general rate legislated from commercial year 2029	23 %Ley Nº 21.850, sixth transitory article, as of 2026-10-26 · pending
Pro Pyme regime rate, commercial years 2025 to 2027	12.5 %Ley Nº 21.755, art. 25, as of 2026-10-26 · in force
Pro Pyme regime rate, commercial year 2028	15 %Ley Nº 21.755, art. 25, as of 2026-10-26 · pending
Pro Pyme eligibility, maximum average annual gross income over three years	75000 UFDL Nº 824, art. 14 letter D Nº 1, as of 2026-10-26 · in force
Single tax on rejected expenses benefiting owners or not proven	40 %DL Nº 824, art. 21, as of 2026-10-26 · in force

The rule

1. The first category tax (impuesto de primera categoría) applies to business income, and its rate is set by commercial year: 27 percent for income accrued or received in 2026, 25.5 percent for 2027, 24 percent for 2028 and 23 percent from 2029. Ley Nº 21.850 also rewrites the art. 20 heading so that a single 23 percent rate remains in the permanent text, deleting the separate 25 and 27 percent sentences. The 2026 and 2027 rates do not apply to entities under art. 14 letter G (such as foundations, corporations and wholly state owned companies).
Cost to do it: The tax on taxable profit, prepaid through monthly provisional payments.
Example: On taxable profit of CLP 986,580,000: CLP 266,376,600 for 2026, CLP 251,577,900 for 2027, CLP 236,779,200 for 2028 and CLP 226,913,400 from 2029. / On US$1,000,000: US$270,000, US$255,000, US$240,000 and US$230,000.Decreto Ley Nº 824, Ley sobre Impuesto a la Renta, as amended by Ley Nº 21.850, DL 824 art. 20 heading; Ley Nº 21.850 art. 8 Nº 3 and sixth transitory article, 2026-10-17 official text · verified 2026-10-26 · changed: Ley Nº 21.850 (Diario Oficial 17 October 2026) cuts the general rate from 27 percent to 25.5 percent for commercial year 2027, 24 percent for 2028 and 23 percent from 2029.

2. Companies whose effective capital at start of activities did not exceed 85,000 UF and whose average annual gross income over the prior three years does not exceed 75,000 UF (never above 85,000 UF in any single year) can use the Pro Pyme regime of art. 14 letter D. Ley Nº 21.755 temporarily sets its rate at 12.5 percent for commercial years 2025 to 2027 and 15 percent for 2028, conditional on the employer pension contribution of Ley Nº 21.735 standing at the scheduled level at each year end.
Cost to do it: Saving of 14.5 points against the 27 percent general rate in 2026.
Example: The 75,000 UF average income limit equals about CLP 3,091,581,000 and the 85,000 UF single year cap about CLP 3,503,791,800 (UF of 26 October 2026). / About US$3.13 million and US$3.55 million.Decreto Ley Nº 824; Ley Nº 21.755, DL 824 art. 14 letter D Nº 1; Ley Nº 21.755 art. 25, 2025-07-11 official text · verified 2026-10-26 · changed: Ley Nº 21.755 (Diario Oficial 11 July 2025) cut the Pro Pyme rate from 25 percent to 12.5 percent for 2025 to 2027 and 15 percent for 2028.

3. A Pro Pyme company whose owners are themselves final taxpayers (paying global complementario or additional tax) may opt into the transparency regime of art. 14 letter D Nº 8: the company is freed from first category tax and its owners are taxed directly on the taxable base the company determines. It is also freed from full accounting, inventories, balance sheets, depreciation, monetary correction and the business income registers, and controls income and expenses through the electronic purchase and sales register.
Cost to do it: No corporate tax; owners pay their final taxes on the company's taxable base in the year it is earned, whether or not distributed.Decreto Ley Nº 824, Art. 14 letter D Nº 8 letters (a) (i) to (iii), 1974-12-31 official text · verified 2026-10-26

4. Taxable profit (renta líquida) is gross income less all expenses necessary to produce it, meaning those able to generate income in the same or future years and linked to the interest, development or maintenance of the business, paid or owed in the year and proven to the SII. Expenses on assets not used in the business and on cars and similar vehicles outside the habitual business are not deductible. Salaries are deductible, but pay to owners or persons able to influence their own pay is accepted only to the extent the SII considers it reasonably proportionate.Decreto Ley Nº 824, Art. 31 first paragraph and Nº 6, 1974-12-31 official text · verified 2026-10-26

5. Expenses rejected because they benefit owners or related parties directly or indirectly, or because the taxpayer cannot prove their nature and reality, bear a single 40 percent tax that is not a category tax, declared with the annual return. The same tax applies to transfer pricing adjustments under art. 41 E and to SII appraisals under art. 64 and art. 65 of the Código Tributario. Paid first category tax, the 40 percent tax itself, property tax and interest and fines paid to the state are excluded.
Cost to do it: 40 percent of the rejected amount, on top of losing the deduction.
Example: A CLP 10,000,000 expense that pays for an owner's personal costs bears CLP 4,000,000 of single tax. / About US$10,136 of expense and US$4,054 of tax.Decreto Ley Nº 824, Art. 21 first and second paragraphs, 1974-12-31 official text · verified 2026-10-26

6. Fixed assets are depreciated in annual instalments over the useful lives set by the SII. New or imported assets with a useful life of three years or more can instead use accelerated depreciation over one third of that life; the taxpayer may leave the accelerated regime at any time but cannot return to it. A fully depreciated asset stays on the books at one peso.Decreto Ley Nº 824, Art. 31 Nº 5, 1974-12-31 official text · verified 2026-10-26

7. Companies make monthly provisional payments (pagos provisionales mensuales, PPM) as a percentage of monthly gross income, recalculated each year from the ratio of the prior year's first category tax to its gross income and applied from the month the annual return is filed. To reflect the rate cuts, Ley Nº 21.850 requires the percentage to be recalculated with each year's rate for April 2027 to March 2030, and reduces the rate applied to January, February and March gross income by 5.56 percent in 2027, 5.88 percent in 2028 and 4.17 percent in 2029.Decreto Ley Nº 824; Ley Nº 21.850, DL 824 art. 84 letter a); Ley Nº 21.850 seventh transitory article, 2026-10-17 official text · verified 2026-10-26 · changed: Ley Nº 21.850 (Diario Oficial 17 October 2026) adjusts the PPM rates for the transition to the lower corporate rates.

8. The annual income tax return is filed in April for the prior calendar year (October for June year ends). Monthly taxes, including PPM, VAT and withholding, are paid by the 12th of the following month.Decreto Ley Nº 824, Art. 65 Nº 1, art. 69 and art. 79, 1974-12-31 official text · verified 2026-10-26

Commercial year	General regime (art. 14 A)	Tax on US$100,000	Pro Pyme (art. 14 D Nº 3), if conditions met	Tax on US$100,000
2026	27 percent	US$27,000 (CLP 26,637,660)	12.5 percent	US$12,500 (CLP 12,332,250)
2027	25.5 percent	US$25,500 (CLP 25,157,790)	12.5 percent	US$12,500 (CLP 12,332,250)
2028	24 percent	US$24,000 (CLP 23,677,920)	15 percent	US$15,000 (CLP 14,798,700)
2029 onward	23 percent	US$23,000 (CLP 22,691,340)	No reduced Pro Pyme rate legislated beyond 2028	n/a

First category tax rates by commercial year (DL 824 art. 20; Ley Nº 21.850 sixth transitory article; Ley Nº 21.755 art. 25). Tax on CLP 98,658,000 (US$100,000) of taxable profit.

Worked example

A foreign owned SpA in the general regime books CLP 1,100,000,000 of accounting profit in 2026. The SII rejects CLP 10,000,000 of expenses paid for a director's family travel and CLP 3,420,000 of non deductible car costs, so taxable profit is CLP 1,113,420,000.
First category tax at 27 percent is CLP 300,623,400 (about US$304,713). The rejected travel also bears the 40 percent single tax of art. 21: CLP 4,000,000 (about US$4,054). Both are settled in the April 2027 return, net of the monthly provisional payments made during 2026.
If the same profit were earned in 2029, the first category tax would be 23 percent, CLP 256,086,600 (about US$259,570).

Step by step

At start of activities, choose the regime: general (art. 14 A) or, if within the UF limits, Pro Pyme (art. 14 D Nº 3) or Pro Pyme transparency (art. 14 D Nº 8).
Each month by the 12th, pay PPM on gross income at the rate set from the prior year (DL 824 art. 84), applying the Ley Nº 21.850 reductions for January to March 2027, 2028 and 2029.
Keep proof for every expense (invoices, contracts, payment records); foreign expenses need supporting documents as well (DL 824 art. 31).
Choose normal or accelerated depreciation for each new asset when it enters service (art. 31 Nº 5).
In April, file the annual return, settle the first category tax and any art. 21 single tax, and reconcile PPM (art. 69).

Common traps

Use the rate of the year income accrues: deferred tax balances and budgets built on 27 percent will be wrong for 2027 onward.
The 12.5 percent Pro Pyme rate depends on the employer pension contribution being at the scheduled level at each year end, and on staying within the UF income limits; one year above 85,000 UF ends eligibility.
Owner benefits paid by the company, even small ones, attract the 40 percent single tax as well as losing the deduction.
Accelerated depreciation lowers first category tax but the resulting difference is tracked for owners' taxation; check the effect on distributions before choosing it.
Pro Pyme transparency taxes owners on profit whether or not it is distributed, which can create tax without cash for foreign owners.

Sources

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