International Tax 2026

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

which does not exceed 140 square metres and is destined for residential purposes. • Capital gains arising from immovable property acquired prior to 2004 may be fully exempt from taxation, subject to requirements. For non-residents, rental income and capital gains from Chilean immovable property are subject to WHT at 35%. Under Chile’s DTAs, gains on immovable property are generally taxable in the state where the property is situated (consistent with Article 6 of the OECD Model), affirming Chile’s right to tax these gains as the source state. 3.2 Business Profits If a legal entity is resident in Chile it will be subject to corporate income tax on its worldwide income. Under the general tax regime (partially integrated tax regime) a company is subject to 27% corporate tax on its accrued and perceived income. Expenses are deductible when paid or accrued, as long as they are necessary or have the potential to generate taxable income. Taxpayers subject to this regime have the obligation to carry full accounting records in Chile for tax purposes. According to the text of a bill of law sent to Congress, if approved, the corporate tax rate will gradually be reduced from the current 27% to 23% as from 2029 onwards. Under the SME tax regime, a company is subject to a transitory 12.5% corporate tax on its perceived income. Such transitory reduced tax rate applies for financial years 2026 and 2027 and increases to 15% for year 2028. As from 2029, the statutory corporate tax rate for SMEs will increase to 23%. Under this regime, expenses are deductible when paid. In other words, legal entities declare income on a cash basis. Additionally, taxpayers may carry full or simplified accounting records. Business profits obtained by non-resident entities are generally taxable in Chile at a 35% rate. Reduced rates may apply in the case of interest and royalty pay - ments, technical assistance, lease of movable fixed assets, and insurance, etc.

Under the treaties signed by Chile, business profits are only taxable in the residence state, unless the tax - payer also triggers a PE in Chile. 3.3 Passive Income Dividends Dividends distributed by Chilean companies to non- resident shareholders are subject to WHT at a rate of 35%. The company paying the dividend has the obligation to withhold and declare the tax before the Chilean IRS. A credit is available for corporate tax paid at the com - pany level. Shareholders resident in non-treaty countries Shareholders who receive dividends paid out of a company subject to the general tax regime are enti - tled to use 65% of the corporate tax paid as a credit against the 35% WHT, thus, the total tax burden on profits sourced in Chile amounts to 44.45%. It is important to note that the new administration that took office in March 2026 sent a tax reform bill to Congress that proposes to fully integrate the tax sys - tem. If approved, the corporate tax paid will be 100% creditable against shareholder taxation, regardless of the residence of the shareholder, reducing the total tax burden to 35%. Shareholders resident in tax-treaty countries If the shareholder is resident in a country with a tax treaty with Chile, 100% of the corporate income tax is creditable against the 35% WHT – in other words, the total tax burden on Chilean profits amounts to 35%. Chile’s tax treaties do not reduce the rate of withhold - ing tax on dividends, as they contain a special clause which states that, as long as Chile provides a credit for the corporate income tax paid, no reductions will apply (the so-called “Chile Clause”). Interest Interest paid to non-residents is subject to WHT, at a general rate of 35%.

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