Chile corporate tax - guide for international expansion

Are you planning to expand your business operations to Chile? Understanding the country's corporate tax landscape is essential for any international business looking to establish a presence in this South American market.

Chile offers one of the most stable economic environments in Latin America, with a well-established tax system overseen by the Servicio de Impuestos Internos (SII). Whether you're setting up a new subsidiary or expanding existing operations, grasping your corporate tax obligations will help ensure compliance and smooth business operations. Wise Business can help streamline your international payments and currency management as you navigate Chile's corporate tax requirements.

💡 Learn more about Wise Business

This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Chile Corporate tax rate in 2026

The standard corporate income tax rate in Chile is 27% for large companies under the Partially Integrated System (PIS). This rate applies to companies that exceed certain revenue thresholds and represents one of the higher corporate tax rates in Latin America.¹

For small and medium-sized enterprises (SMEs) with annual sales up to approximately USD 2.8 million, Chile offers a significantly reduced corporate tax rate of 12.5% for fiscal years 2025, 2026, and 2027 under the SME regime. This temporary reduction is part of Chile's economic recovery measures, with the rate scheduled to increase to 15% in 2028 and eventually return to 25% thereafter.¹

Chile operates under a unique integrated tax system where corporate taxes paid can be credited against shareholders' personal income taxes. Under the PIS system, only 65% of the corporate tax is creditable for domestic shareholders, while foreign shareholders from double taxation treaty countries are entitled to full credit.¹

The country's corporate tax system is designed to balance revenue generation with economic competitiveness, particularly supporting smaller businesses through preferential rates while maintaining higher rates for larger corporations.¹

How to pay corporate tax in Chile

Corporate taxes in Chile must be paid in Chilean pesos (CLP) to the Servicio de Impuestos Internos (SII), Chile's national tax authority. Companies are required to file their annual corporate income tax returns by April 30th of the year following the tax year, with payment due simultaneously.²

The SII operates a comprehensive online platform where businesses can file returns, make payments, and manage their tax obligations electronically. Companies must register with the SII and obtain a RUT (Rol Único Tributario) number before commencing operations.³

Monthly provisional payments (Pagos Provisionales Mensuales - PPM) are required throughout the tax year. For SMEs benefiting from the reduced tax rate, these monthly payments are halved during fiscal years 2025, 2026, and 2027. These advance payments help spread the tax burden and ensure regular revenue collection.²

Chile imposes penalties for non-compliance, including late filing and late payment. If the annual tax return is filed late, fines are generally imposed based on a percentage of the tax due. Crucially, late payment of taxes now incurs a daily penalty interest, calculated on the inflation-adjusted outstanding tax amount.⁴

Let's calculate the annual tax liability for a company with a turnover of 1.5 million Chilean pesos. Assuming a profit margin of 10%, the taxable profit would be 150,000 CLP:

For a large company under PIS (27% rate):

150,000 CLP × 27% = 40,500 CLP

For an SME under the reduced rate (12.5% for 2025-2027):

150,000 CLP × 12.5% = 18,750 CLP

When expanding your business to Chile, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

Get started with Wise Business 🚀

Tax compliance in Chile

Some key points to help your company stay compliant with Chilean tax regulations:

• Understand the corporate tax system: Chile has two main regimes. The Pro Pyme system for small and medium enterprises has a reduced rate of 25%, while the Partially Integrated system applies a 27% corporate tax rate. VAT is levied at 19% on most goods and services. Strategic tax planning is important to optimize costs, especially when using investment incentives and tax treaties.⁵
• Meet annual filing obligations: Companies must file a yearly income tax return for the fiscal year ending December 31. Returns and payments are submitted electronically through the SII portal between April 8 and April 30. Missing these deadlines can trigger penalties or delays in refunds.⁶
• Manage monthly payments: Businesses must make Monthly Provisional Payments (PPM), calculated from gross revenue or prior income, and file monthly VAT returns. These are typically due by the 12th of each month.⁶
• Follow compliance rules: Companies must adopt IFRS accounting standards, prepare annual declarations, and maintain proper records for labor and social security filings. Cross-border businesses must also comply with transfer pricing rules, ensuring intercompany transactions reflect fair market value.

Keeping these obligations in check helps companies maintain good standing and avoid unnecessary penalties in Chile.

{.img-desktop](https://wise.com/imaginary-v2/a26f326fdf0665c24b7b0a511ea9d864.png)

International Expansion to Chile

Chile is one of Latin America’s most stable and business-friendly economies. The World Economic Forum consistently ranks it the most competitive nation in Latin America. It combines strong institutions with forward-looking economic policies. Its GDP per capita ranks third in the region, and foreign investors benefit from a solid legal framework, respect for private property, and low levels of corruption compared to regional peers.⁷

The country has earned international recognition for transparency and macroeconomic stability. Sovereign bond ratings remain among the highest in Latin America, while Chile’s commitment to capital transparency and fair treatment of foreign investors fosters confidence. In 2023, foreign direct investment inflows rose by 24.5%, reaching USD 21 billion.⁸ This is an indicator of renewed global confidence.

Furthermore, Chile also provides global market access on a scale unmatched in the region. Free trade agreements cover 65 countries. Special tariff regimes link local businesses to 88% of global GDP, connecting investors to nearly five billion consumers. Santiago has been recognized as the smartest city in Latin America, and the government continues to strengthen the entrepreneurial ecosystem, making Chile the most innovative country for early-stage entrepreneurs in the region.⁹

Education and talent add to the country’s appeal. Over 1.3 million university students and nearly 300,000 graduates each year contribute to a highly skilled workforce, keeping labour costs competitive yet capable of supporting advanced industries.⁹ These advantages, combined with a transparent Chile corporate tax rate and clear procedures for corporate tax submission, position Chile as a premier hub for companies seeking stability and growth.

If you plan to start a business in Chile, here’s what you need to do:¹⁰

1. Conduct market research to understand the local environment.
2. Develop a solid business plan tailored to the Chilean market.
3. Choose a business location and legal entity type.
4. Secure a business name and register with the Chilean Chamber of Commerce for a company authentication number.
5. Obtain a RUT tax identification number from the Internal Revenue Service (SII).
6. Acquire a patente municipal working license.
7. Open a corporate bank account and set up bookkeeping systems to manage your corporate tax bill and financial obligations.

Strong financial stability makes it easier for investors to manage their money in Chile. The initial steps may take some time and research, but the outcomes could be highly favorable if you familiarise yourself with this region's economic and political policies.

Incorporation of Business in Chile

To incorporate a business in Chile, you must follow a series of legal and administrative steps overseen by the Ministry of Economy, Development, and Tourism. Incorporation is formalized through a public deed before a notary, and the process is structured to provide clarity for both local and foreign investors, particularly in the context of global corporate tax rates and regional competitiveness.

When setting up your entity in Chile, the following information and requirements are needed:¹¹

• Constitution of the company: A public deed drafted by a lawyer must state the owner’s personal details, the company name, and, if applicable, a fantasy name. The name must conclude with Empresa Individual de Responsabilidad Limitada (EIRL) for sole ownership.
• Initial capital: The deed should state the effective capital contribution, which should have a defined value, whether in cash or in kind.
• Corporate purpose: The company’s business activity and specific operations sector must be outlined.
• Registered address: A local address must be provided.
• Company duration: This can be set as fixed or indefinite. If not specified, it defaults to indefinite.
• Publication and registration: A deed extract must be published in the Official Gazette (www.diariooficial.cl) within 60 days and registered with the Commercial Registry in the same timeframe.
• Tax registration: The company must obtain a RUT (Tax ID Number) with the Internal Revenue Service (SII) within 60 days of starting business, followed by a sworn declaration of business commencement.

This process ensures the company is fully compliant before commencing operations.

Business Entities in Chile

Chilean legislation (Corporations Act -Law Nr. 18,046) provides different legal structures to suit businesses of varying sizes and objectives:^{5 12}

Corporation (Sociedad Anónima, S.A.)

• Best suited for larger companies or businesses in regulated industries.
• Requires at least two shareholders and registration through a public deed.
• Shareholders’ liability is limited to their subscribed capital.
• Publicly traded corporations must publish annual financial statements and are subject to the Comisión para el Mercado Financiero (CMF).

Simplified Shares Company (Sociedad por Acciones, SpA)

• Introduced in 2007 to promote entrepreneurship and investment.
• Allows incorporation by a single shareholder, providing flexibility for startups and small businesses.
• No minimum capital requirement and limited liability applies to subscribed shares.
• Unlike corporations, SpAs are not required to publish financial statements, making them easier to manage.

Limited Liability Company (Sociedad de Responsabilidad Limitada, SRL)

• Typically used by family businesses or private groups seeking controlled management.
• Requires at least two partners but no more than 50.
• Liability is limited to each partner’s contributions, with no minimum capital requirements.
• Not subject to CMF supervision or financial statement publication.

The SpA is often the preferred option for foreign investors, as it combines limited liability with flexibility in ownership and management, making it less complex than a traditional S.A.*

Clearly, it is not one of the 0 corporate tax countries. Yet, its stable system and favourable corporate tax allowance policies provide a strong foundation for international growth.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires strategic planning and adherence to international standards. Companies operating in Chile should maintain comprehensive financial records and ensure compliance with both local Chilean tax laws and international reporting requirements.

Understanding double taxation treaties is essential for businesses with international operations. Chile has signed double taxation agreements with numerous countries, which can help reduce the overall tax burden on cross-border income and prevent the same income from being taxed in multiple jurisdictions.

Companies should also stay informed about OECD initiatives, including the Base Erosion and Profit Shifting (BEPS) framework. While Chile has not yet implemented Pillar Two global minimum tax rules, international businesses should monitor developments as these rules may affect their global tax planning strategies.

Maintaining transparent and accurate financial records is crucial for tax compliance and audit preparedness. This includes proper documentation of transfer pricing arrangements, intercompany transactions, and compliance with local accounting standards that align with International Financial Reporting Standards (IFRS).

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Chile efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency
• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

Get started with Wise Business 🚀

Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

FAQs - Corporate tax in Chile

Who is liable for corporate tax in Chile?

All companies incorporated in Chile are subject to corporate income tax on their worldwide income at rates of either 27% (large companies) or 12.5% (SMEs for 2025-2027). Foreign companies with a permanent establishment in Chile are taxed only on their Chilean-source income. This includes branches, subsidiaries, and companies with significant business activities or assets in Chile.

Are there any tax incentives for businesses in Chile?

Chile offers several tax incentives, particularly for research and development activities. Companies can claim a 35% tax credit for R&D investments made under contracts with registered research centres, with annual credits limited to 15,000 monthly tax units. The country also provides regional incentives, accelerated depreciation for certain assets, and special regimes for companies in free trade zones.

What is the tax treatment of dividends in Chile?

Under Chile's integrated tax system, dividends are subject to a 35% withholding tax for non-residents. However, shareholders from double taxation treaty countries may benefit from reduced rates. Chilean resident shareholders can credit corporate taxes paid against their personal income tax liability, with SME shareholders receiving 100% credit and PIS shareholders receiving 65% credit.

What is the process for registering for corporate tax in Chile?

Companies must register with the SII and obtain a RUT (Rol Único Tributario) number before commencing operations. This involves submitting incorporation documents, appointing a legal representative domiciled in Chile, and providing detailed information about the company's activities and ownership structure. The registration process is mandatory for all entities conducting business in Chile.

What are the common pitfalls to avoid regarding corporate tax in Chile?

Common mistakes include failing to make monthly provisional payments, missing the April 30th annual filing deadline, incorrectly calculating tax liabilities under the integrated system, and inadequate documentation for transfer pricing. Companies should also ensure proper classification between the SME regime and PIS, as this significantly affects tax rates and credit availability.

Sources used in this article:

1. PwC Tax Summaries: Chile Taxes on Corporate Income
2. PwC Tax Summaries: Chile Tax Administration
3. Servicio de Impuestos Internos (SII) - Tax Service Portal (Spanish)
4. KPMG: Flash Alert - Global Mobility Services (2025)
5. Biz Latin Hub: Types of Businesses in Chile
6. Commenda: Chile Corporate Tax Rates & Annual Return Deadlines
7. U.S. Department of State: 2024 Investment Climate Statements - Chile
8. Lloyds Bank Trade: Investing in Chile
9. CACC: Why Invest in Chile
10. Biz Latin Hub: Setting up Company in Chile (Step-by-Step Guide)
11. Chile Emprende (Government Portal): Create Your Business (Spanish)
12. LEGlobal Law: Opening in Chile Guide

Sources last checked 08/10/2025