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Retained

  • Statutory Tax Rate 27
  • Surtax Based on Taxable Income 0
  • Surtax Based on Statutory Tax 0
  • Surtax Deductible from Taxable Income 0
  • Statutory Tax Deductable 0
  • Effective Tax Rate 27

Statutory Tax Rate

Effective 1 January 2020, Chile’s dual corporate tax system has been replaced with a single tax system with a corporate tax rate of 27% (except for SMEs). A reduced 25% rate applies for SMEs having an average annual revenue of up to UF 75,000 in the previous three years, without restriction on the tax credit for distributions. The UF is an indexed unit equal to CLP 28,341.91 as on 4 February 2020.

An additional withholding tax of 35% is payable upon distribution of profits to non-residents with a credit for the corporate tax paid. In case of distributions to non-treaty countries, the credit is limited to 65% of the corporate tax paid (the U.S. will be treated as a treaty country until 31 December 2026).

A temporary substitute flat tax at a rate of 30% applies for accrued profits up to 31 December 2016, against which corporate tax paid is creditable. Companies that exercise the option to pay the substitute tax can remit or distribute the profits without being subject to the 35% withholding tax.

Till 2019, following dual corporate tax regime system was applicable:

  • The standard attribution regime (AIS), under which final owners were subject to corporate tax rate of 25% and additional withholding tax of 35%, whether distributed or not with full credit for the corporate taxes paid; or
  • The alternative regime (PIS), under which an increased corporate tax rate of 27% was applicable, but was not subject to the additional withholding tax until profits were distributed. Further, tax credit was limited to 65% in certain cases.

Effective Tax Rate

Under Chile's 2014 tax reform, the general corporate income tax rate (first category income tax FCT) is as follows.
• 2014 - 21%
• 2015 - 22.5%
• 2016 - 24%
• 2017 - 25% (The rate for the alternative regime (PIS) is 25.5%)
• 2018 - 25% (The rate for the alternative regime (PIS) is 27%)
An additional withholding tax of 35% is payable upon distribution of profits to non-residents (and to resident individuals). The FCT paid is creditable against this withholding tax.
From 2017, two regimes will apply:
• The standard attribution regime (AIS), under which final owners are subject to the additional withholding tax of 35% whether distributed or not with full credit for FCT; or
• The alternative regime (PIS), under which an increased FCT rate applies but the additional withholding tax does not apply until profits are distributed (FCT credit may be limited to 65% - see below)
Under the PIS regime, if the non-resident is resident in a country with which Chile does not have a tax treaty in force, the FCT credit is limited and the effective rates are calculated as follows:
• In 2017 the effective rate is 43.925% = 25.5% FCT + 35% WHT - 16.575% (65% FCT credit); and • In 2018 the effective rate is 44.45% = 27% FCT + 35% WHT - 17.55% (65% FCT credit)
However, if the relevant country of residence does have a tax treaty in force with Chile, a full FCT credit is available, resulting in an effective rate of 35%.

Capital Gains

  • Statutory Tax Rate 20
  • Surtax Based on Taxable Income 15
  • Surtax Based on Statutory Tax 0
  • Surtax Deductible from Taxable Income 0
  • Statutory Tax Deductable 0
  • Effective Tax Rate 35