Countries › Chile › Guide › 6. Taxes › Tax losses in Chile: indefinite carryforward with inflation adjustment, no carryback, and the change of ownership rule

Tax losses in Chile: indefinite carryforward with inflation adjustment, no carryback, and the change of ownership rule

Argentina. For full detail on Argentina, go to The Argentine Thread.

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

A Chilean company can deduct tax losses of prior years without any time limit, applying them to the next year and so on, and the loss is adjusted for consumer price inflation each year. There is no cap on the share of profit a loss can absorb and no carryback in the law; since Ley Nº 21.210, dividends received from other companies no longer absorb losses. Losses are forfeited when 50 percent or more of the ownership changes and the company also changes or loses its business or becomes a passive holding.

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

Tax loss carryforward period	Unlimited textDL Nº 824, art. 31 Nº 3, as of 2026-10-26 · in force
Cap on share of taxable income that carried forward losses can absorb	None textDL Nº 824, art. 31 Nº 3, as of 2026-10-26 · in force
Loss carryback	Not provided; losses are applied to following years textDL Nº 824, art. 31 Nº 3, as of 2026-10-26 · in force
Carried forward losses adjusted by consumer price index	Yes textDL Nº 824, art. 31 Nº 3, as of 2026-10-26 · in force
Ownership change that, with a business change, forfeits losses	50 %DL Nº 824, art. 31 Nº 3, as of 2026-10-26 · in force

The rule

1. Losses of previous years may be deducted from taxable income, provided they meet the general requirements for deductible losses, and must be applied to the immediately following year and so on in later years, with no time limit stated. Losses are computed by applying the taxable income rules to the year's results.
Cost to do it: No fee; reduces first category tax at the rate of the year of use (27 percent in 2026, 23 percent from 2029).
Example: A loss of CLP 986,580,000 used against 2026 profit saves CLP 266,376,600 of tax; used in 2029 or later it saves CLP 226,913,400. / A US$1,000,000 loss saves US$270,000 in 2026 or US$230,000 from 2029.Decreto Ley Nº 824, Art. 31 fourth paragraph Nº 3, fifth paragraph, 2020-02-24 official text · verified 2026-10-26

2. When a loss is carried to later years it is adjusted by the change in the consumer price index between the last day of the month before the close of the year in which it arose and the last day of the month before the close of the year in which it is deducted.
Cost to do it: None; protects the real value of the loss.Decreto Ley Nº 824, Art. 31 fourth paragraph Nº 3, 1976-07-29 official text · verified 2026-10-26

3. Withdrawals or dividends received from other companies are not applied against the recipient's losses. The first category tax credit attached to them is instead tracked in the recipient's SAC credit register.
Cost to do it: Loss making holding companies no longer obtain refunds by absorbing dividends.Decreto Ley Nº 824, as amended by Ley Nº 21.210, Art. 31 fourth paragraph Nº 3; art. 14 letter A Nº 2 letter d), 2020-02-24 official text · verified 2026-10-26 · changed: Ley Nº 21.210 (Diario Oficial 24 February 2020) ended the absorption of dividends received by tax losses.

4. A company that had a change of 50 percent or more of its ownership (shares, quotas or profit rights, acquired directly or indirectly by new owners in the year) cannot deduct losses generated before the change from income earned after it, if in addition, because of the change or in the twelve months before or after it, the company changed or extended its line of business unless it keeps its main business, or at the time of the change lacks capital assets of a size that allows it to carry on its business or of a value proportional to the price paid, or comes to earn only income from holdings in other companies or reinvestment of profits. The rule does not apply to changes between related companies under Código Tributario art. 8 Nº 17.
Cost to do it: Loss of the accumulated tax shield if triggered.Decreto Ley Nº 824, Art. 31 fourth paragraph Nº 3, last paragraph, 2001-06-19 official text · verified 2026-10-26

5. Under the new tax stability contracts available from 1 January 2027 for investments of at least USD 50 million, the SII resolutions, administrative interpretations and circulars in force at signing on loss carryforwards, depreciation and organisation and start up costs are frozen for the stability term.
Cost to do it: The stability regime costs an extra 1.5 points of first category tax on the covered income.Ley Nº 21.850, Art. 26 Nº 2 letter B, letter a), 2026-10-17 official text · verified 2026-10-26 · changed: New tax stability statute created by Ley Nº 21.850 (Diario Oficial 17 October 2026), effective from 1 January 2027.

Year loss is used	Rate	Tax saved	Tax saved in CLP
2026	27 percent	US$270,000	CLP 266,376,600
2027	25.5 percent	US$255,000	CLP 251,577,900
2028	24 percent	US$240,000	CLP 236,779,200
2029 onward	23 percent	US$230,000	CLP 226,913,400

Value of a US$1,000,000 tax loss by the year it is used, at the first category rates of Ley Nº 21.850 sixth transitory article (CLP at 986.58 per US dollar).

Worked example

A Chilean SpA has a tax loss of US$2,000,000 (CLP 1,973,160,000) at the end of 2025 and profits of US$1,200,000 in 2026 and US$1,500,000 in 2027. It deducts the inflation adjusted loss in full against 2026 profit, leaving an adjusted balance of about US$800,000 plus inflation, which it uses in 2027; it pays 25.5 percent only on the remaining 2027 profit.
If, during 2026, a buyer acquired 60 percent of the SpA and within twelve months the company switched to a new line of business, the losses generated before the purchase could not be used against profits earned after it.

Step by step

Compute each year's tax result under the taxable income rules, not the accounting result.
Keep a schedule of each year's loss and its consumer price index adjustment.
Before selling or buying 50 percent or more of a loss company, test the business continuity and asset conditions of art. 31 Nº 3.
Remember dividends received do not absorb losses, so plan holding company cash flows without loss refunds.

Common traps

Since the rate is falling to 23 percent by 2029, losses used later save less tax per peso.
The ownership change rule counts indirect acquisitions through related companies.
Pre 2020 practice of recovering tax by absorbing dividends with losses no longer works.

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

← Thin capitalization in Chile: the 3 to 1 excess indebtedness tax on related party interest, what counts as debt and equity, and the exemptionsChile's tax treaties: the 37 double taxation conventions in force, how treaty rates are claimed, the restitution exception and the multilateral instrument →