Tax Advisory for Foreign Companies in Chile

A first map of the Chilean tax system

This page offers general information, not personalized tax advice. Taxes in Chile are administered by the Servicio de Impuestos Internos (SII). Foreign companies that operate here must obtain a tax identification number, the RUT, and generally need a representative in Chile with sufficient authority to deal with the SII. In many cases they also have to notify the SII that they have started activities.

The structure you choose matters. A Chilean subsidiary is a separate taxpayer. A branch or other form of permanent establishment is taxed on its Chilean activity. A foreign company with no presence may still face Chilean withholding tax when it receives certain payments from Chilean customers. Each route has different filings and cash-flow effects.

Our role as attorneys is to explain the legal framework, build it into your contracts and corporate structure, and represent you in administrative or tax-court proceedings if needed. Numerical calculations, bookkeeping and annual returns are normally handled together with a Chilean accountant, and we coordinate with them so that the legal documents and the tax treatment tell the same story.

The main taxes foreign companies meet

Chile applies value added tax (IVA, Decree Law 825) to most sales of goods and services, at a flat rate of 19%. Companies generally pay First Category corporate income tax on profits, at a general rate that has been 27% for companies in the standard regime, with a lower rate available to eligible small and medium businesses. Invoices are issued electronically through the SII's systems.

Under Law 21.210, certain foreign providers of digital services to Chilean consumers must also register and charge VAT. Whether a particular supply of services is taxed, exempt or treated as an export needs to be reviewed contract by contract.

What we handle

Paying money out of Chile and the role of treaties

Profits sent to foreign owners and payments such as royalties, interest and certain service fees to non-residents can trigger withholding tax. For payments to non-residents, the additional tax is generally 35% on Chilean-source income, though specific categories have their own rates and treaties can reduce them.

Chile has a network of tax treaties, and the treaty with the United States has applied since 2024. Using a treaty usually requires documents proving residence in the treaty country. Transfer pricing, thin capitalization and controlled foreign company rules can also apply to related-party structures.

Common mistakes foreign companies make

Foreign sellers often start invoicing Chilean clients without checking whether they need a local registration, or assume that a US tax residence certificate automatically removes withholding. Others sign service or license contracts that do not say who bears Chilean taxes, which leads to disputes at the first payment.

Tax clauses, documentation of treaty residence and the right invoicing process are all easier to fix before the first payment than after an SII notice. This page is general information, so ask your accountant and us to review the structure together.