International Tax 2026

CHILE Law and Practice Contributed by: Javier Cortés, Juan Pablo Márquez and Gonzalo Pérez, Cortés Del Río Tax & Legal

An individual is considered to have “residence” in Chile if they remain in Chile, whether continuously or not, for a period or periods which in total add up to more than 183 days within any 12-month period. The concept of “domicile” is more subjective, as it refers to the place where a person demonstrates the intent to remain. The existence of domicile or lack thereof must be evidenced before the Chilean IRS, which mainly interprets this concept based on eco - nomic factors. Either residence or domicile suffices to trigger world - wide tax liability. The ITL provides a three-year grace period for newly resident individuals who are not Chil - ean nationals: during the first three years following the establishment of domicile or residence in Chile, only Chilean-source income is subject to Chilean tax. The tax authority may extend this period in exceptional circumstances. This rule has significant implications for inbound assignment planning and for individuals relocating to Chile. Individuals moving away from Chile have an obligation to file a declaration informing the IRS of this situation. In this regard, the Chilean IRS is reluctant to consider that an individual is no longer domiciled or resident in Chile and to release them from their domestic tax obligations. 2.3 Taxation of Resident Individuals Individuals must file an annual income tax return in April each year. Individuals resident or domiciled in Chile are subject to progressive annual personal income tax with rates ranging from 0% to 40% (the top marginal rate of 40% is applicable to annual income exceeding approximately USD200,000). This tax applies to all income received during the tax year from worldwide sources. Employment income is subject to withholding on a monthly basis at the same progressive rates as annu - al income; at financial year-end, the taxpayer may use the employment tax withheld by their employer against their personal income tax. Resident individuals who are shareholders or partners in Chilean entities must include within their personal

taxable income dividends or profits distributed by local companies, according to the following rules: • The corporate income tax paid at the company lev - el can be fully or partially offset against the person - al income tax due by the shareholder. Under the general regime (partially integrated regime), only 65% of the corporate tax paid is creditable against their personal income tax, and this may result in an effective overall tax burden of approximately 44.45% on distributed profits. The new administra - tion that took office in Chile sent a tax bill of law in April 2026, which among other measures, propos - es to fully integrate the tax system. This means that the corporate tax paid at the company level will be fully creditable against shareholders’ personal income taxes. • On the other hand, individuals who receive profits paid out of a company subject to the special small and medium enterprise (SME) regime may use 100% of the corporate income tax paid at a com - pany level against their personal income tax. Regarding foreign income, as explained above, it is taxable, as a general rule, on a cash basis, unless the CFC rules apply. Foreign tax credits are available, subject to limitations. Chile does not contemplate a participation exemption regime for resident individuals. 2.4 Taxation of Non-Resident Individuals Non-resident individuals that obtain Chilean-source income are subject to withholding tax (WHT). The Chil - ean payer is responsible for withholding and paying the tax to the Chilean IRS through form No 50. The tax must be declared and paid no later than the 12th day of the month following that in which the payment was made to the foreign beneficiary. The general WHT rate is 35%, but specific reduced rates apply to particular categories of income: • Dividends – these are generally subject to 35% WHT. Against the 35% WHT, it is possible to credit all or part of the corporate income tax paid at the company level, depending on the tax regime appli - cable to the company paying out the dividend.

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