Blog

Chile Tax Overview

Read

Chile Tax Overview
0
(0)

Every country has their own tax system and code by which individuals and corporations must abide. The tax policy of individual countries is one of the main determining factors for whether it is considered viable for businesses and friendly to foreigners doing business in or relocating to that country. Let’s take a look at Chile’s tax overview in three main categories: Personal Taxes, Corporate Taxes, and VAT Taxes. 

SERVIAP can help with your global expansion needs. Contact us today to learn how you can expand your business with PEO in Chile. 

Chile Personal Taxes 

Here’s everything you need to know about personal taxes in Chile: 

Who is Taxed? 

Both residents and non-residents of Chile are subject to taxes in the country. Individuals are deemed to be a resident of Chile if they stay in the country for more than six months over two tax years in a row.  

What is the Tax Rate? 

Chile has a progressive tax rate that ranges from 4% to 35.5%. Some individuals will pay on the higher end of taxes in Latin America, while others will pay on the lower end. As a whole, the average individual tax rate in Latin America for 2021 is 31.89%. 

The tax rates are based upon what are called monthly units of levy, the value of which are revalued every month.  

National vs International Income 

Residents of Chile are taxed on all income they earn, no matter where it comes from. Non-residents are taxed only on income generated within Chile.  Foreigners who are establishing a residence within Chile will pay taxes only on their income generated in Chile for the first three years they’re establishing the residence. After that, they’ll be taxed on all of their income—from both within the country and external sources.  

Capital Gains, Exemptions & Other Considerations 

Chile treats capital gains as ordinary income. Some capital gains are exempt from taxes if they are determined to be occasional. Individuals may also deduct any business expenses that are termed to be necessary, as long as they prove that they are necessary.  

The only non-business expenses Chile allows individuals to deduct are contributions to social security. This is only allowed if employees make additional contributions to their pension fund. 

Chile Corporate Taxes 

Here’s everything you need to know about corporate taxes in Chile: 

Who is Taxed? 

Companies that are considered residents of Chile pay corporate taxes on their worldwide income. Non-resident companies only pay corporate taxes on the income that they generate in Chile. 

What is the Tax Rate? 

Chile has a progressive tax rate for corporate taxes as well, ranging from 0% to 40%. With some exceptions (as noted below), the business income is taxed at a flat rate of 17%. 

The average corporate tax rate in South America for 2020 was 27.54%, meaning Chile is on the lower end of corporate taxes in the region, for most income.  

What is Taxable Income? 

Chile has five tax categories for business income, including: 

  • First Category: Income derived from activities in agriculture, industrial and commercial within Chile; fishing, mining and other “extractive” activities; real estate and investments. The tax rate for this category is 17%. 
  • Second Category: Income that comes from salaries, wages, overtime, fees, bonuses, profit sharing, gratuities and other remuneration. This applies to the 0%-40% progressive tax rate. 
  • Complementary: Income that is withdrawn or received in the year before. This is also a progressive tax rate up to 40%. 
  • Additional: Income generated in Chile that is remitted or withdrawn abroad to individuals who aren’t residents of Chile from companies not considered Chilean domiciled.  
  • Special Tax: For non-resident companies, this is a 35% tax rate on all amounts of income that aren’t subjected to being deducted. 
  • Operational Mining Income Specific Tax: Mining activity is subject to a specific tax. It’s a progressive rate that starts at 0.5% depending on the amount of the sale and the type of material. 

Tax Incentives & Deductions 

Companies can deduct any direct costs of providing services and goods they sell. They can also deduct any necessary expenses they must incur to earn the income they generate. Chile also offers incentives to business that operate in certain regions or carry out certain activities. 

Chile VAT Taxes 

Value-added taxes, better known as VAT taxes, are a common form of consumption tax. The value-added portion is the difference between a business’ sales and its cost of purchasing services or goods from another business. Here’s what you need to know about VAT taxes in Chile: 

Who is Taxed? 

Chile taxes imports based on their CIF value. Some capital goods are exempt from the VAT tax, including raw materials that are used to process, manufacture or produce some goods to be exported. All exports are exempt from the VAT tax as well.  

What is the Tax Rate? 

Chile has a standard VAT tax rate of 19%. They do offer reduced rates for things such as insurance, technical services, some financial services, transport and consultancy.  

Is Chile Right for Your Business? 

SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in Chile. 

({ , formId: “4f609ddb-8f77-426d-8e9e-de115378f21f” });

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Related Articles

Chile Tax Overview

What is Neurodiversity in The Workplace And How to Support it

Talent Acquisition

5 Read

Fostering a truly inclusive workplace means going beyond compliance and actively celebrating neurodiversity in the workplace.

Read Blog Post

PEO vs EOR Services: 2 Options to Choose

Global EOR, International PEO

5 Read

Understanding the key differences between PEO vs EOR services is crucial when choosing the right solution for your business.

Read Blog Post

New Minimum Wage in El Salvador: What it Means For Global Companies

News El Salvador

4 Read

The new minimum wage in El Salvador became effective on June 1st, 2025, and requires a varying increase across different sectors.

Read Blog Post

Serviap Global Celebrates 15 Years

Featured, News

5 (2) In 2025, Serviap Global celebrates 15 years of history, an achievement that mirrors the rapid transformation of the employer of record (EOR) industry...

Read Blog Post

How to Pay Contractors Internationally: a Quick Guide

Independent contractors, Talent Acquisition

0 (0) Hiring international contractors can help you grow your business, reduce costs, and access specialized skills, but navigating how to pay contractors across borders...

Read Blog Post

How Can a US Company Hire a Foreign Employee?: 3 Useful Options

Recruitment, Recruitment process outsourcing (RPO)

0 (0) Even with recent tariffs and economic uncertainties, many American businesses are looking beyond borders to tap into international talent. But how can a...

Read Blog Post

Working Hours in Mexico: Country Plans 8-Hours Reduction by 2030

News Mexico

0 (0) Recent years in Mexico have been marked by recurrent discussions in labor reform, including the increase of minimum wage and the fight against...

Read Blog Post

4 Global Expansion Tips With Aaron McDaniel

Global EOR, Remote working

Expanding globally in 2025? The goal is not just about targeting the biggest markets. Read and discover global expansion tips to grow with confidence.

Read Blog Post

Serviap Global Wins at the 2025 Excellence in Customer Service Awards

Awards

The Serviap Global team has been recognized in the Exceptional Customer Experience category.

Read Blog Post

Live Webinar: What You Must Know About Global Expansion in 2025, with Aaron McDaniel

Featured

Learn insightful tips for global expansion expansion in our live webinar, featuring Aaron McDaniel.

Read Blog Post

Serviap Global is a Finalist at the 2025 TIARA Talent Solutions Awards US

Awards

Serviap Global becomes a finalist in Client Service at the 2025 TIARA Talent Solutions Awards US.

Read Blog Post

How to Use AI in Hiring International Workers

Recruitment, Recruitment process outsourcing (RPO), Talent Acquisition

How to use AI in hiring? Discover the history, benefits, and challenges of AI assistance in global talent acquisition.

Read Blog Post

How U.S. Tariffs Benefit Canada and Mexico: A Strategic Advantage in Global Trade

News

5 (1) US tariffs on other countries strengthen the position of Mexico and Canada as key partners for companies looking to expand, hire talent, and...

Read Blog Post

Borderless Talks Ep. 6: Women in Remote Work And The Evolution of The EOR Industry

Featured, Global EOR, Remote working

Episode 6 of Borderless Talks invites Brend Limón to discuss the evolution of global collaboration from the perspective of women in remote work.

Read Blog Post

Serviap Global is a Finalist at the 2025 Latin America Inspiring Workplaces Awards

Awards, Featured

Serviap Global is nomitated as a finalist among 8 other global companies at the IW Awards 2025.

Read Blog Post

How to Manage International Teams: 5 Tips for Leaders

Global EOR, Remote working

Efficient international teams take hard work and ongoing efforts in communication and culture. Here are 5 considerations to improve remote teamwork.

Read Blog Post

2 Options for Hiring Remote Foreign Employees Without a Local Entity

Global EOR, Independent contractors

The complexities of hiring remote foreign employees can be simplified with these two options: EOR collaboration and hiring independent contractors.

Read Blog Post

Infographics: Can we Overcome The Global Talent Shortage in 2025?

Recruitment, Talent Acquisition

Discover some key tips to help you beat the global talent shortage and getting ahead.

Read Blog Post

Borderless Talks Ep. 5: Advantages of Chinese companies in Latin America

Featured

Listen to the fifth episode of Borderless Talks with Serviap Global's Sales Executive from China, Sally Chen.

Read Blog Post

6 Important Documents to Hire Employees Abroad

Recruitment, Talent Acquisition, Visas and Immigration

Get to know some of the important documents and steps to hire employees abroad for global companies.

Read Blog Post

Global Hiring Trends in 2025: Which Industries Are Leading International Expansion?

Global EOR, International PEO

In 2025, many sectors will be at the forefront of international expansion and global hiring trends, from technology, to manufacturing, and so on.

Read Blog Post

Infographic: Working Hours in Latin America by Country

Infographics, International PEO

The maximum working hours in Latin America vary from country to country. Getting an overview of their work practices is essential to enter this region's...

Read Blog Post

Hiring In Colombia: 10 Key Factors To Know Beforehand

News Colombia, Talent Acquisition

Discover important aspects of the Colombian market based on the World Bank's Business Ready 2024 ranking.

Read Blog Post

How Does EOR Work?: Your 6-Steps Easy Guide

Global EOR, International PEO

An Employer of Record helps you enter new markets in a matter of weeks or even days. But do you know how does EOR work?

Read Blog Post

New “Unidad de Medida y Actualización” in Mexico: What it Means for Employers in 2025

Global EOR, News Mexico, Payroll outsourcing

The "Unidad de Medida y Actualización" index was increased by 4.21% in 2025 and reflects in the payment increase of fines and other obligations.

Read Blog Post

Borderless Talks Ep. 4: Top Global Expansion Mistakes to Avoid in 2025

Featured, Global EOR, Podcast

Listen to the fourth episode of Borderless Talks with Global Expansion Expert, Klaus Wehage.

Read Blog Post

Infographics: International Maternity Leave Standards

Global EOR

Browse our maps to discover the main differences in guidelines for international maternity leave rights.

Read Blog Post

Borderless Talks Ep. 3: Zain Ali on Global Hiring Solutions

Featured, Podcast

Listen to the third episode of Borderless Talks with Zain Ali, CEO of Centuro Global.

Read Blog Post

5 Top Digital Nomad Destinations in South America 

Uncategorized

Looking for your next place to work, live or hire? Here is our selection of top digital nomad destinations in South America for 2025.

Read Blog Post

6 Global Team Building Tips from Santa Claus Himself 

International PEO, Recruitment process outsourcing (RPO)

Santa Claus partnered with Serviap Global to give you these important tips on global team building in your company.

Read Blog Post