One of the advantages of investing in Chile is the legal and tax framework that applies to foreign investors. In general, the framework is transparent, nondiscriminatory, and predictable.
From a tax standpoint, Chile has an attractively low corporate marginal tax rate. The tax on businesses of 17% is less than comparable rates in the majority European countries and the lowest in Latin America.
Additionally, the Chilean tax system is efficient, has a low rate of evasion, and offers various incentives to investors, international businesses, and cross border services. In addition, the internal tax administration service (SII) operates with a high level of transparency. This is demonstrated in its pioneering use of the internet to deliver the annual tax declaration, as well as, the high quality of information available to businesses.
The impact of taxes on Chilean residents and resident aliens
In Chile, residents and resident aliens must pay taxes on all income regardless of whether it originates in Chile or abroad.
The business tax of 17% on net income is the lowest in Latin America.
Individuals pay a progressive tax of between zero and 40% on total income minus required pension contributions and health insurance.
Resident aliens: are all foreigners that demonstrate an intention of residing in Chile
Residents: are those individuals that reside for more than 6 months continuously or for a total of at least 6 months during a two-year period.