Chile, a South American country known for its strong economic growth, mining industry, and business-friendly environment, operates a comprehensive tax system that impacts both residents and non-residents. Located along the Pacific coast, Chile combines a robust economy with a stable political climate, making it an attractive destination for international professionals and businesses.

Chile's economy, one of the most stable and prosperous in Latin America, has shown resilience despite global economic challenges. The country's tax system is designed to support economic growth while maintaining social welfare. Recent reforms have focused on simplifying tax procedures and enhancing digital tax filing for foreign residents.

The expat community in Chile is growing, with many professionals drawn to sectors like mining, finance, and technology. The tax system, while detailed, offers various benefits and deductions that can significantly impact an expat's financial planning.

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Chilean Income Tax

Chile employs a progressive income tax system with rates ranging from 0% to 35.5%. Resident taxpayers are subject to taxation on their worldwide income, while non-residents are taxed only on Chile-sourced income (with flat 15% tax). The system includes various social security contributions, which fund public services like healthcare and pensions.

Tax residents face the following income tax brackets (as of 2025):

Additionally, social security contributions are generally calculated at around 7% of gross income, bringing the effective maximum tax rate to approximately 47%.

If you want to have a better understanding of the taxes you should pay on personal income in Chile, you can use the personal tax calculator in the Taxation section of the Chile page.‍

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Chilean Tax on Overseas Income‍

Chile's treatment of foreign income depends on residency status. The country recognizes two main categories of taxpayers:

1. Residents: Taxed on worldwide income
2. Non-residents: Taxed only on Chile-sourced income

This system particularly benefits non-residents, who are only taxed on income earned within Chile. However, residents must declare and pay taxes on their worldwide income, with potential relief through double taxation treaties.‍

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Chilean Tax on Investments‍

Investment income in Chile receives specific tax treatment. Dividends and capital gains from listed stocks are typically taxed at a flat rate of 35%. The system includes:

• Dividends: Taxed at 35%
• Capital Gains: Taxed at 35% for securities held for less than one year; tax-free if held longer
• Interest Income: Taxed at 35%
• Rental Income: Taxed at progressive income tax rates, with deductions for expenses

Real estate investments face both federal and municipal taxes, with potential deductions for depreciation, maintenance, and other expenses.‍

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Chilean Corporate Taxation‍

Corporate tax in Chile comprises several components:

• Federal corporate tax: 27%
• Value Added Tax (VAT): 19% standard rate, with reduced rates for certain goods and services
• Municipal business tax: Varies by municipality, typically around 1%

The effective corporate tax rate typically ranges from 27% to 28%, depending on the company's location. Small and medium-sized enterprises may qualify for certain tax reliefs and incentives.‍

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Special Tax Regimes

‍Chile offers several special tax arrangements beneficial to international professionals:

1. Research and Development (R&D) Incentives: Tax credits and deductions for companies engaged in R&D activities.
2. Foreign Income Tax Relief: Available to prevent double taxation on overseas income for residents.
3. Special Tax Benefits for Key Workers: Tax incentives for qualified foreign professionals working in Chilean companies.
4. Investment Allowances: Deductions for investments in certain regions or sectors.

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Regional Comparison

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Tax Planning for Chile‍

Effective tax planning in Chile requires attention to several key areas:

1. Residency Status Management: Strategic planning of residency status can optimize tax treatment of foreign income.
2. Investment Strategy: Utilizing tax-advantaged accounts and long-term holding periods can optimize investment income.
3. Documentation: Maintaining clear records of overseas assets and income sources is crucial.
4. Professional Advice: Engaging with tax professionals to navigate the complexities of the Chilean tax system.

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