The principal forms of tax payable by expats and workers resident in Chile are divided into three broad categories:
- Income tax
- Value-added tax
- Import duties
Other categories that may be relevant are: Inheritance, real estate, and stamp duty. (Note: Chile does not levy income tax on foreign retirement benefits, pensions or social security payments.)
To work legally in Chile all foreign employees must have registered for, and received an RUT (Rol Único Tributario) number that will effectively be their tax code and social security number, as well as a more general form of civic identification for bank accounts etc.
Income tax
With the lowest personal income tax rates of any of the OECD nations, combined with tax agreements with other countries including the USA, Chile maintains low rates of taxation and avoids the reputation of tax havens for money laundering and improper dealings. Residents and employees can expect to benefit from zero taxation by Chilean authorities on their international earnings for a period of three years upon arrival.
In the cases of commercial, industrial and agricultural activities, and those generally deemed ‘extractive’, such as mining, a separate tax rate is levied. Tax on income derived from employers: such as salaries, overtime etc is a different one. For the sake of simplicity, it is easier to consider the latter, as any expat seeking commercial opportunities in Chile ought to consult a professional tax advisor.
Earnings by employees based in Chile will be taxed according to a progressive scale of tax bands that extends up to 40% of earners’ gross incomes after deductions for social security by employers.
However, in order to maintain the ‘progressive’ nature of the tax system, frequent amendments to the conditions are an unfortunate side effect and can leave some foreign residents paying more than they expected without adequate planning and advice.
The best option for potential expats is to enlist the services of a qualified tax accountant whose job is to keep up with the shifting expectations of the financial authorities, leaving you free to enjoy life in Chile.
If you wish to try and calculate your income tax rate, the system is implemented according to the number of taxable ‘units’ you accrue with your monthly income. These units are subject to regular readjustment, but according to sources they tend to average between 1 = 35,000-40,000 CLP. So a monthly income that meets or exceeds the 150 unit upper limit will be typically be worth approximately 5.5m CLP (equivalent to roughly US $11,600 per month), and taxed according to the top rate of 40%
| Tax Unit | Tax Rate % |
| Lower than 13.5 units | 0% |
| 13.5 - 30 units | 5% |
| 30 - 50 units | 10% |
| 50 - 70 units | 15% |
| 70 - 90 units | 25% |
| 90 - 120 units | 32% |
| 120 - 150 units | 37% |
| Beyond 150 units | 40% |