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If you want to establish a company in Chile, this article explains the tax laws for a LLC (SRL) which is the most common company type in Chile.

Chile levies corporate tax on resident entities worldwide income. The established rate for income earned abroad, from our research, and these things do change, is 25.5%. Chile does not have major incentives to bring in income earned abroad. The effective CIT rate is 25.5% and will be 27% in 2018 onwards. This ranks Chile as 123rd when compared to corporate tax rate worldwide.

The valued added tax rate in Chile is 19.00%, that ranks Chile as 127th overall in terms of value added tax rate worldwide. In terms of other taxation, an employer will contribute 8.17% to the equivalent of a social security fund and an employee will contribute 17.00%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 125hours. Contributing to this is the number of yearly labor tax payments, which is 1 in CL.

Thin cap laws are in play. This refers to any sort of laws on a business and the debt-to-asset ratios. Dividends received by Chilean entities from other Chilean entities are not subject to the CIT. However, when these dividends are distributed up-stream, and the ownership chain reaches the final Chilean individual owners or the foreign shareholders, they will be taxed at 35%. Dividends are distributions of a company profit, voted on by the board, to shareholders.Dividends can be issued as stock, cash, or property. Capital Gains are generally subject to Corporate Income Tax. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 35%. This means that the taxman expects relevant legal entities to automatically withhold 35% of money remitted abroad on interests. Interests paid to a foreign financial institution may be subject to a reduced rate of 4%. The dividends withholding tax rate is 35%. This should be interpreted that usually the relevant tax authorities expects LLC (SRL)'s to pay tax on 35% of dividends paid to non-residents. The royalties withholding tax rate is 30%. This means that the tax authorities expects legal entities to pay tax on at least 30% of payments abroad on royalties. Certain royalty payments are subject to a reduced tax rate of 15%, unless recipient is resident in a listed tax haven. Withholding taxes may be reduced or exempted under tax treaties.
There is no known tax on wealth in Chile. There are inheritance and real property taxes in Chile. We are aware of commonly used credits for innovation spend that include tax relief here.

The above is not tax or legal advice for your individual facts and circumstance. can refer you to an expert in Chile who will resolve your doubts. Want to work together? Click the free consultation button above.

Country details

South America
Spanish (Chile)

Tax treaties

Country Type Date Signed
Korea, Republic of DTC  2002-04-18
Sweden DTC  2004-06-04
Canada DTC  1998-01-21
New Zealand DTC  2003-12-10
Uruguay TIEA 2014-09-12
Switzerland DTC  2008-04-02
Russian Federation DTC  2004-11-19
Ireland DTC  2005-06-02
Thailand DTC  2006-09-08
South Africa DTC  2012-07-11
Ecuador DTC  1999-08-26
Norway DTC  2001-10-26
Guernsey TIEA 2012-09-24
Peru DTC  2001-06-08
Colombia DTC  2007-04-19
Australia DTC  2010-03-10
Croatia DTC  2003-06-24
Malaysia DTC  2004-09-03
Spain DTC  2003-07-07
Brazil DTC  2001-04-03
Denmark DTC  2002-09-20
France DTC  2004-06-07
Mexico DTC  1998-04-17
Belgium DTC  2007-12-06
United Kingdom DTC  2003-07-12
Portugal DTC  2005-07-07
Poland DTC  2000-03-10
United States DTC  2010-02-04
Austria DTC  2012-12-06
Paraguay DTC  2005-08-30

Tax treaties Map



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