Taxes in Chile
Chile has a straightforward tax system with an important benefit for new residents: a multi-year exemption on foreign-source income. Understanding the tax rules helps with financial planning.
Tax Residency
You become a Chilean tax resident if you stay in Chile for 183+ days in any 12-month period.
Tax residents: Subject to tax on worldwide income
Non-residents: Only taxed on Chilean-source income
The Foreign Income Exemption
Key benefit for newcomers:
- First 3 years: Only Chilean-source income is taxed
- Extension available: Can request 3 additional years
- Total: Up to 6 years before worldwide income is taxed
This makes Chile attractive for those with foreign investments, pensions, or remote work income.
Income Tax Rates (Global Complementary Tax)
| Annual Income (UTM) | Approximate USD | Rate |
|---|---|---|
| 0-13.5 UTM | $0-10,800 | 0% |
| 13.5-30 UTM | $10,800-24,000 | 4% |
| 30-50 UTM | $24,000-40,000 | 8% |
| 50-70 UTM | $40,000-56,000 | 13.5% |
| 70-90 UTM | $56,000-72,000 | 23% |
| 90-120 UTM | $72,000-96,000 | 30.4% |
| 120-150 UTM | $96,000-120,000 | 35% |
| 150+ UTM | $120,000+ | 40% |
UTM (Unidad Tributaria Mensual) = ~$80 USD, adjusts for inflation
Other Taxes
VAT (IVA): 19% on most goods and services
- Included in displayed prices
- Some exemptions (basic food, healthcare)
Social security contributions (if employed in Chile):
- Pension (AFP): ~10% of salary
- Health: 7% of salary
- Unemployment insurance: Small percentage
Property tax:
- ~1% of assessed value annually
- Paid in installments
US-Chile Tax Treaty
For Americans, the tax treaty helps prevent double taxation:
- Dividends: 15% withholding (5% if 10%+ ownership)
- Interest: 15% (drops to 10% after 5 years)
- Royalties: 2-10% depending on type
Important: US citizens must file US taxes regardless of residence. Use Foreign Earned Income Exclusion or Foreign Tax Credit.
Filing Requirements
Annual tax return: Due in April for previous calendar year income
Forms:
- Form 22 (Formulario 22) - main tax return
- Filed online through SII (Servicio de Impuestos Internos) website
Who must file:
- Anyone earning above the exempt threshold
- Those with multiple income sources
- Foreign residents with Chilean income
Tax Planning Tips
- Time your move: If arriving late in year, you may not trigger 183-day rule until following year
- Document foreign income: Keep clear records during exemption period
- Use the exemption period: Structure foreign investments to maximize 6-year benefit
- Consider retirement income: Pension income often qualifies for exemption
- Get professional help: Tax laws can be complex - worth consulting an accountant familiar with expat situations
Tax Calendar
| Date | Event |
|---|---|
| April | Annual tax return deadline |
| Monthly | Social security payments (if employed) |
| Quarterly | Provisional payments (if self-employed) |
Finding Help
Tax advisors: Several firms specialize in expat taxes
- Look for those familiar with US-Chile treaty
- Costs: $200-500 for basic returns
Online resources:
- SII website (www.sii.cl) has English information
- Expat tax forums and Facebook groups
Pro Tips
- •New residents get 3-6 years exemption on foreign income - major benefit
- •File taxes in April for the previous calendar year
- •US citizens must file US taxes too - use Foreign Tax Credit to avoid double taxation
- •Keep detailed records of foreign income during exemption period
- •VAT (19%) is included in displayed prices - no surprise at checkout
Have questions about taxes in Chile?