Taxation Of Individuals

Chilean nationals who are resident in Chile are liable for Chilean taxes on their worldwide income. These taxes are principally the withholding tax on employment income, known as second category tax (impuesto de segunda categoria), and complementary tax (impuesto global complementario). Foreigners who are resident or domiciled in Chile are liable for the same taxes as resident Chilean nationals, but for their first three years in the country (sometimes longer if the tax authorities grant an extension), they are taxed only on their Chilean-source income. Thereafter, they are taxed on their worldwide income.

As a rule, nonresidents are liable for Chilean taxes only on their Chilean-source income. Chilean-source income is income derived from services rendered in Chile or assets located there. However, nonresidents are also liable for Chilean withholding tax on income from services rendered abroad to a Chilean resident individual or entity.