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Taxes in Chile: the core system for foreign investors, from corporate tax and the integrated dividend regime to withholding, VAT and the tax calendar

Last verified: 2026-10-25 · Status: Changing

Chile taxes company profits under a first category tax of 27 percent for commercial year 2026, which Ley Nº 21.850 of 17 October 2026 cuts to 25.5 percent in 2027, 24 percent in 2028 and 23 percent from 2029, while qualifying SMEs under the Pro Pyme regime pay a temporary 12.5 percent. Profits paid to foreign owners bear a 35 percent additional tax with a credit for the corporate tax, so treaty country owners carry a 35 percent total burden and others a higher one until the restitution of part of the credit is phased out by 2029. Payments abroad for interest, royalties and services are withheld at 4 to 35 percent, VAT is 19 percent, monthly taxes are due by the 12th, the annual return is filed in April, and the SII can generally reassess for three years, or six when no return was filed or it was maliciously false.

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). 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 2026-10-25 · in force
Corporate income tax, general rate for commercial year 2027	25.5 %Ley Nº 21.850, sixth transitory article, as of 2026-10-25 · pending
Corporate income tax, general rate for commercial year 2028	24 %Ley Nº 21.850, sixth transitory article, as of 2026-10-25 · pending
Corporate income tax, general rate legislated from commercial year 2029	23 %Ley Nº 21.850, sixth transitory article, as of 2026-10-25 · pending
Pro Pyme (SME) regime rate, commercial years 2025 to 2027, conditional on pension contribution schedule	12.5 %Ley Nº 21.755, art. 25, as of 2026-10-25 · in force
Additional tax on dividends and remitted profits to non residents (before first category tax credit)	35 %DL Nº 824, art. 58 Nº 1 and Nº 2 and art. 63, as of 2026-10-25 · in force
Total tax on distributed profit for a treaty country shareholder (corporate plus additional tax)	35 %DL Nº 824, art. 58 and art. 63, as of 2026-10-25 · in force
Total tax on 2026 profit distributed to a non treaty shareholder, including 35 percent restitution	44.45 %DL Nº 824, art. 58 and art. 63; Ley Nº 21.850 art. 9 and fifth transitory article, as of 2026-10-25 · in force
Withholding on interest paid abroad, general rate	35 %DL Nº 824, art. 59 Nº 1, as of 2026-10-25 · in force
Withholding on interest on loans from foreign banks and financial institutions	4 %DL Nº 824, art. 59 Nº 1 b), as of 2026-10-25 · in force
Withholding on royalties for trademarks and similar	30 %DL Nº 824, art. 59 first paragraph, as of 2026-10-25 · in force
Withholding on patents, industrial designs and non standard software	15 %DL Nº 824, art. 59 first paragraph, as of 2026-10-25 · in force
Withholding on engineering, technical and professional advice paid abroad	15 %DL Nº 824, art. 59 Nº 2, as of 2026-10-25 · in force
Thin capitalization threshold, total debt to tax equity	3:1 ratioDL Nº 824, art. 41 F Nº 3, as of 2026-10-25 · in force
Single tax on related party interest on excess debt	35 %DL Nº 824, art. 41 F, as of 2026-10-25 · in force
VAT standard rate	19 %DL Nº 825, art. 14, as of 2026-10-25 · in force
Monthly VAT payment and return deadline (day of following month)	12 dayDL Nº 825, art. 64, as of 2026-10-25 · in force
Annual income tax return month	April monthDL Nº 824, art. 69, as of 2026-10-25 · in force
General statute of limitations for SII assessments	3 yearsDL Nº 830 (Código Tributario), art. 200, as of 2026-10-25 · in force
Extended statute of limitations (no return or maliciously false return)	6 yearsDL Nº 830 (Código Tributario), art. 200, as of 2026-10-25 · in force

The rule

1. Company profits pay the first category tax (impuesto de primera categoría), creditable against the owners' final taxes under art. 56 Nº 3 and art. 63. On the text in force today the rate is 27 percent for companies in the general semi integrated regime of art. 14 letter A and 25 percent under the Pro Pyme regime of art. 14 letter D. Ley Nº 21.850 sets the rate by commercial year: 27 percent for 2026, 25.5 percent for 2027, 24 percent for 2028 and 23 percent from 2029, and replaces the art. 20 wording with a single 23 percent rate, deleting the separate 25 and 27 percent sentences. The 2026 and 2027 steps do not apply to entities with no direct or indirect link to final taxpayers under art. 14 letter G, such as foundations, corporations and wholly state owned companies.
Cost to do it: The tax itself on taxable profit; no separate fee.
Example: On taxable profit of CLP 986,580,000 the tax is 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 of profit: US$270,000 for 2026, US$255,000 for 2027, US$240,000 for 2028 and US$230,000 from 2029.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 2026-10-25 · 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. Monthly provisional payment rates for January to March of 2027, 2028 and 2029 are reduced by 5.56, 5.88 and 4.17 percent respectively to reflect the cuts (seventh transitory article).

2. Companies in the Pro Pyme regime pay a temporarily reduced first category rate of 12.5 percent on income of commercial years 2025, 2026 and 2027 and 15 percent for 2028, provided that at each year end the employer pension contribution of the fourth transitory article of Ley Nº 21.735 stands at 1, 3.5 and 4.25 percent respectively for 2025 to 2027, and 5 percent for 2028. Their monthly provisional payment rate is halved for 2025 to 2027. A company qualifies as a Pyme only if its effective capital at start of activities did not exceed 85,000 UF and its average annual gross business income over the prior three years does not exceed 75,000 UF; that average may be exceeded once, but gross income in any single year may never exceed 85,000 UF. The SII applies these rules in Circular Nº 53 of 2025.
Cost to do it: Tax saving for an eligible company of 14.5 points against the 27 percent general rate in 2026.
Example: A Pro Pyme company with taxable profit of CLP 98,658,000 in 2026 pays CLP 12,332,250 instead of CLP 26,637,660 at the general rate. / On US$100,000 of profit: US$12,500 instead of US$27,000.Ley Nº 21.755; Decreto Ley Nº 824, Ley Nº 21.755 art. 25; DL 824 art. 14 letter D Nº 1, 2025-07-11 official text · verified 2026-10-25 · 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, subject to the pension contribution schedule. From 1 January 2029 Ley Nº 21.850 also lowers the Pro Pyme provisional payment rates in art. 14 letter D Nº 3 literal (k) from 0.25 percent to 0.23 percent.

3. Non residents pay additional tax (impuesto adicional) at 35 percent on dividends from Chilean companies and on profits withdrawn or remitted by a Chilean branch or other permanent establishment. The base is grossed up by the first category tax credit, which is then credited against the 35 percent, so for a fully taxed profit the total burden is 35 percent. Under art. 63 as in force today, a shareholder that uses a credit subject to restitution must also pay back 35 percent of that credit, unless resident in a country with a tax treaty in force under which the first category tax is deductible from the additional tax, or with a clause to the same effect. Capital brought into Chile can be returned free of this tax up to the amount actually brought in. The payer withholds the tax and pays it by the 12th of the following month.
Cost to do it: 35 percent total for treaty country owners; 44.45 percent on 2026 profits for others, falling to 35 percent for profits from 2029.
Example: Profit of CLP 98,658,000 taxed at 27 percent leaves CLP 72,020,340; additional tax is CLP 7,892,640, so a treaty country parent nets CLP 64,127,700, while a non treaty parent also restitutes CLP 9,323,181 and nets CLP 54,804,519. / On US$100,000 of 2026 profit: US$27,000 corporate tax, US$8,000 additional tax, US$65,000 net to a treaty country parent; US$9,450 more and US$55,550 net for a non treaty parent.Decreto Ley Nº 824, as amended by Ley Nº 21.850, DL 824 art. 58 Nº 1 and Nº 2, art. 63, art. 74 Nº 4 and art. 79; Ley Nº 21.850 art. 9 and fifth transitory article, 2026-10-17 official text · verified 2026-10-25 · changed: Ley Nº 21.850 (Diario Oficial 17 October 2026) repeals the restitution rule from 1 January 2027, but keeps a restitution of 30 percent for first category credits generated in tax year 2028 (commercial year 2027) and 20 percent for those of tax year 2029 (commercial year 2028), with the treaty country exception preserved. Credits accumulated up to 31 December 2026 are allocated first, in the form and order in force on that date.

4. Payments to persons without domicile or residence in Chile bear additional tax withheld at source on the gross amount. Royalties for trademarks, patents, formulas and similar are taxed at 30 percent, reduced to 15 percent for patents, utility models, industrial designs, integrated circuit layouts, new plant varieties and non standard software, while payments for standard software are exempt; the 30 percent rate applies again when the recipient is in a preferential tax regime under art. 41 H. Interest is taxed at 35 percent, or 4 percent on loans from foreign or international banks and financial institutions and certain other lenders, subject to an anti back to back declaration. Engineering or technical work and professional or technical advice, provided in Chile or abroad, is taxed at 15 percent, or 20 percent for recipients in preferential tax regimes.
Cost to do it: Withholding of 4 to 35 percent of the gross payment, borne by the foreign recipient unless the contract grosses it up.
Example: On CLP 98,658,000 of payments: interest to a foreign bank CLP 3,946,320, interest to a non bank parent CLP 34,530,300, software licence CLP 14,798,700, trademark royalty CLP 29,597,400, technical advice CLP 14,798,700. / On US$100,000: US$4,000 (bank interest), US$35,000 (parent loan interest), US$15,000 (software), US$30,000 (trademark), US$15,000 (technical advice).Decreto Ley Nº 824, Art. 59 first and fourth paragraphs, Nº 1 and Nº 2; art. 74 Nº 4; art. 79, 1974-12-31 official text · verified 2026-10-25

5. Interest, commissions, service fees and other financial charges paid to related parties abroad that correspond to excess indebtedness are subject to a single 35 percent tax. Excess indebtedness exists when the taxpayer's total annual debt exceeds three times its equity at year end, equity being tax equity at 1 January (or at start of activities) adjusted for capital contributions, reductions and distributions during the year and excluding contributions financed with related debt. The tax is declared and paid with the annual return.
Cost to do it: 35 percent single tax on the share of related party interest that corresponds to the excess.
Example: With tax equity of CLP 986,580,000, total debt above CLP 2,959,740,000 at year end triggers the excess indebtedness tax. / With US$1,000,000 of equity, debt above US$3,000,000 triggers it.Decreto Ley Nº 824, Art. 41 F Nº 1 to Nº 4, 1974-12-31 official text · verified 2026-10-25

6. VAT (impuesto al valor agregado) is levied at 19 percent on the taxable base of sales and services. VAT accrued in a month is paid by the 12th of the following month together with a sworn return of all operations of that month, including exempt ones; Pro Pyme and other companies whose average annual business income over the last three calendar years does not exceed 100,000 UF can defer payment by up to two months if they meet the conditions of art. 64. Non residents that sell services or goods to Chilean persons who are not VAT taxpayers fall under a simplified regime with no input VAT credit and no obligation to issue tax documents.
Cost to do it: 19 percent on the taxable base, generally recovered through input VAT credit by registered businesses.
Example: A service invoiced at CLP 10,000,000 carries CLP 1,900,000 of VAT, total CLP 11,900,000. / About US$10,136 plus US$1,926 of VAT, total about US$12,062.Decreto Ley Nº 825, Ley sobre Impuesto a las Ventas y Servicios, Art. 14, art. 64 and art. 35 A to 35 C, 1974-12-31 official text · verified 2026-10-25

7. Annual income tax returns are filed in April for income of the previous calendar or commercial year; companies whose balance sheet closes in June file in October. Withholdings under art. 73 and art. 74 Nº 4, including additional tax on payments abroad, are declared and paid by the 12th of the month after payment.
Cost to do it: No tax beyond the amounts due; late filing and payment carry interest and penalties under the Código Tributario.Decreto Ley Nº 824, Art. 65 Nº 1, art. 69 and art. 79, 1974-12-31 official text · verified 2026-10-25

8. The SII can assess a tax, review any deficiency and issue tax bills within three years from the end of the legal payment period. The period is six years for taxes subject to a return when no return was filed or the return was maliciously false. Both periods are extended by three months from a formal summons (citación) for the operations it identifies.
Cost to do it: Keep records and support for at least six years to cover the longer period.Decreto Ley Nº 830, Código Tributario, Art. 200, 1974-12-31 official text · verified 2026-10-25

Tax	Rate	Who pays or withholds	When	Rule
First category (corporate) tax	27 percent in 2026; 25.5, 24 and 23 percent for 2027, 2028 and 2029 onward; Pro Pyme 12.5 percent to 2027 and 15 percent in 2028 if conditions met	The company or branch	Monthly provisional payments; annual return in April	DL 824 art. 20; Ley 21.850 sixth transitory; Ley 21.755 art. 25
Additional tax on dividends and branch remittances	35 percent, with credit for first category tax; restitution for non treaty owners being phased out	Non resident owner; withheld by the payer	By the 12th of the month after payment	DL 824 art. 58, 63, 74 Nº 4, 79
Withholding on interest	35 percent; 4 percent for foreign bank and financial institution loans	Foreign lender; withheld by the payer	By the 12th of the following month	DL 824 art. 59 Nº 1
Withholding on royalties	30 percent; 15 percent for patents, designs and non standard software; standard software exempt	Foreign licensor; withheld by the payer	By the 12th of the following month	DL 824 art. 59
Withholding on technical and professional services	15 percent; 20 percent for preferential regime recipients	Foreign provider; withheld by the payer	By the 12th of the following month	DL 824 art. 59 Nº 2
Excess indebtedness tax	35 percent on related party interest attributable to debt above 3 times equity	The Chilean debtor	With the annual return	DL 824 art. 41 F
VAT	19 percent	Seller or service provider; simplified regime for non resident digital sellers to consumers	By the 12th of the following month	DL 825 art. 14, 64, 35 A

Main Chilean taxes for a foreign owned company, with the rule behind each (text in force on 25 October 2026 and changes legislated by Ley Nº 21.850).

Profit year	Corporate rate	Corporate tax	Additional tax after credit	Net to treaty country parent	Restitution (non treaty parent)	Net to non treaty parent	Total burden, non treaty
2026	27 percent	US$27,000 (CLP 26,637,660)	US$8,000 (CLP 7,892,640)	US$65,000 (CLP 64,127,700)	35 percent of the credit: US$9,450 (CLP 9,323,181)	US$55,550 (CLP 54,804,519)	44.45 percent
2027	25.5 percent	US$25,500 (CLP 25,157,790)	US$9,500 (CLP 9,372,510)	US$65,000 (CLP 64,127,700)	30 percent of the credit: US$7,650 (CLP 7,547,337)	US$57,350 (CLP 56,580,363)	42.65 percent
2028	24 percent	US$24,000 (CLP 23,677,920)	US$11,000 (CLP 10,852,380)	US$65,000 (CLP 64,127,700)	20 percent of the credit: US$4,800 (CLP 4,735,584)	US$60,200 (CLP 59,392,116)	39.8 percent
2029 onward	23 percent	US$23,000 (CLP 22,691,340)	US$12,000 (CLP 11,838,960)	US$65,000 (CLP 64,127,700)	None	US$65,000 (CLP 64,127,700)	35 percent

Tax on US$100,000 of pre tax profit distributed to a foreign parent, by the commercial year in which the profit is earned, assuming the credit attached is that year's first category tax (DL 824 art. 58 and art. 63; Ley Nº 21.850 sixth transitory and fifth transitory articles). CLP at 986.58 per US dollar. For 2026 profit, the 35 percent restitution is the art. 63 rule as in force until 31 December 2026; for 2027 and 2028 profit, the 30 and 20 percent restitution of the fifth transitory article of Ley Nº 21.850.

Worked example

A US parent owns a Chilean SpA in the general regime that earns taxable profit of CLP 986,580,000 (US$1,000,000) in 2026. The SpA pays CLP 266,376,600 (US$270,000) of first category tax, partly through monthly provisional payments, and files its annual return in April 2027 (DL 824 art. 20, art. 69).
During 2026 the SpA pays its parent US$100,000 (CLP 98,658,000) of interest on an intercompany loan and US$50,000 (CLP 49,329,000) for technical advice. It withholds US$35,000 (CLP 34,530,300) and US$7,500 (CLP 7,399,350) and pays both by the 12th of the following month (DL 824 art. 59 Nº 1 and Nº 2, art. 79). If the loan had come from a foreign bank the withholding would have been US$4,000 (CLP 3,946,320). If total debt exceeds three times tax equity at year end, the related interest on the excess also bears the 35 percent tax of art. 41 F.
When the SpA distributes the after tax profit of US$730,000 (CLP 720,203,400), additional tax is 35 percent of the grossed up US$1,000,000 less the US$270,000 credit, so US$80,000 (CLP 78,926,400). Unless the parent's country has a treaty in force with Chile with a credit clause, art. 63 as in force today also requires restitution of 35 percent of the credit used, US$94,500 (CLP 93,231,810). For a distribution made on or after 1 January 2027, Ley Nº 21.850 repeals that rule but allocates credits accumulated up to 31 December 2026 first, under the form and order in force on that date, so confirm the treatment of those credits against SII instructions before remitting.
If the parent is an Argentine company, Chile's treaty with Argentina, signed on 15 May 2015 and listed by Chile with an entry date of 11 October 2016, governs; whether it removes the restitution depends on its dividend and credit clauses, which should be checked case by case. The Argentine side, including Argentine tax and FX rules on receiving the dividend, is covered in the Argentine guide.

Step by step

Before the first sale, obtain the RUT and file the start of activities with the SII (see Start here); this enrols the company for VAT and income tax.
Choose the tax regime: the general semi integrated regime of art. 14 letter A or, if the company meets the 85,000 UF capital and 75,000 UF average income tests, the Pro Pyme regime of art. 14 letter D with its reduced rate.
Every month, by the 12th: file the monthly return with VAT, provisional income tax payments and withholdings on payments abroad and to staff (DL 825 art. 64; DL 824 art. 79).
Before any payment abroad, classify it (dividend, interest, royalty, service) to set the withholding rate, and collect the documents that support a reduced rate, such as the foreign bank declaration for the 4 percent interest rate or treaty residence evidence.
At year end, test total debt against three times tax equity for the excess indebtedness tax (DL 824 art. 41 F).
In April, file the annual income tax return for the prior year (DL 824 art. 69); June year end companies file in October.
Keep accounting records and supporting documents for at least six years, the longer SII review period (Código Tributario art. 200).

Common traps

Rates are moving year by year: 27 percent applies to 2026 profits, 25.5 percent to 2027 and 24 percent to 2028 before reaching 23 percent in 2029. Budgets and deferred tax calculations need the rate of the year in which income accrues, not the current one.
The 12.5 percent Pro Pyme rate is conditional: it applies only if the employer pension contribution under Ley Nº 21.735 is at the scheduled level at each year end, and only while the company keeps within the UF income limits; exceeding 85,000 UF of gross income in any year ends eligibility.
Restitution does not disappear on 1 January 2027: credits from commercial years 2027 and 2028 still carry 30 and 20 percent restitution for non treaty owners, and credits accumulated up to 31 December 2026 must be allocated first under the form and order in force on that date, with control of each period's restitution following SII instructions.
The treaty exception to restitution requires a treaty in force with a clause making corporate tax deductible from the additional tax, or with the same effect; a treaty that is only signed does not qualify.
The 4 percent interest rate is lost if the loan is a back to back structure, and needs a declaration from the foreign lender; otherwise 35 percent applies.
Software payments split three ways: standard software is exempt, other software 15 percent, and 30 percent if the recipient sits in a preferential tax regime.
Returns of capital are free of additional tax only up to the capital actually brought into Chile, so keep the evidence of each contribution.

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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