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ARTICLE · 04 MAY 2016

Taxation Of Foreign Engineering Services In Chile

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Payments that are made out of Chile for technical services are regulated by Article 59 Nº 2 of the Income Tax Law, which is the general rule on this matter.

ChileTax
Rodrigo Schönherr
Rodrigo Schönherr

Payments that are made out of Chile for technical services are regulated by Article 59 Nº 2 of the Income Tax Law, which is the general rule on this matter. It establishes an Additional Tax, which is a unique income withholding tax with a 15% rate, applied on the total of the remittance without any possible deduction.

Payments done to any company with residency outside of Chile are subject to the unique Additional Tax of 15%, as it would be technical advice. However, for the engineering services to qualify as a technical advisory, it must exist as a document, which can be a guidance, report or a plan.

However, this rate is higher (20%) if the foreign company that is providing the services is related to the company that requests or pays for this services.

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