Chile's tax authority, the Servicio de Impuestos Internos (Internal Revenue Service of Chile), has introduced expanded reporting obligations that take effect for the 2025 tax year. Foreign entities with income sourced in Chile – or with a permanent establishment on Chilean territory – must now comply with stricter disclosure rules. Companies that miss the compliance deadline risk automatic penalties, suspension of tax residency benefits, and loss of access to reduced withholding tax rates under applicable tax treaties.
Chile's new tax reporting requirements oblige foreign entities earning Chilean-sourced income to file expanded informational returns with the tax authority, disclosing beneficial ownership structures, related-party transactions, and the basis for any treaty benefits claimed. The rules apply to entities that cross defined activity or revenue thresholds during the 2025 fiscal year. The primary compliance deadline falls in April 2026, aligned with Chile's standard corporate income tax filing calendar.
This alert explains which business categories are affected, what the threshold criteria are, and what foreign companies should do right now to avoid exposure.
What has changed and when it takes effect
Chile's tax legislation has been amended to broaden the informational reporting regime for cross-border structures. The changes were formally enacted in late 2024 and apply retroactively to income earned during the 2025 calendar year.
Three categories of change are most significant for foreign entities.
First, the beneficial ownership disclosure requirement has been extended. Foreign companies holding Chilean assets or receiving Chilean-sourced income must now identify their ultimate beneficial owners to the tax authority. This applies regardless of whether the entity holds a permanent establishment in Chile or operates through a local subsidiary.
Second, related-party transaction reporting has been tightened. Cross-border payments – including royalties, management fees, and intra-group loans – must be reported with supporting documentation demonstrating arm's-length pricing. Chilean tax legislation has long required transfer pricing documentation, but the new rules expand the scope of transactions subject to mandatory disclosure.
Third, entities claiming reduced withholding tax rates under a tax treaty must now file a separate certification confirming their tax residency status in the treaty partner jurisdiction. The tax authority will not apply reduced rates automatically. Entities that fail to submit the certification before the payment date will be subject to the standard withholding tax rate.
For a detailed overview of how these rules interact with Chile's broader corporate income tax system, see our advisory on tax law services in Chile.
Which foreign entities are affected
The new obligations apply to a broad range of business structures. Affected categories include the following.
- Foreign corporations with a permanent establishment registered in Chile
- Non-resident entities receiving royalties, dividends, or interest from Chilean sources
- Foreign holding companies with Chilean subsidiaries that engage in intra-group transactions
- Investment funds and asset managers with Chilean portfolio investments above the disclosure threshold
- Entities claiming treaty benefits under any of Chile's active tax treaty network agreements
The threshold for the expanded beneficial ownership report is triggered when Chilean-sourced gross income exceeds a defined level during the fiscal year, or when the entity holds Chilean assets above a separate asset-value threshold. Entities below both thresholds remain subject to standard withholding tax rules but are exempt from the expanded informational filings.
A non-obvious risk applies to holding structures. A foreign parent company that does not itself trade in Chile may still be caught by the beneficial ownership rules if its Chilean subsidiary makes dividend remittances or intra-group payments above the threshold. Many international groups overlook this exposure because the Chilean-registered entity – not the foreign parent – handles local filings. The new rules place an affirmative duty on the foreign entity to self-report.
Tax residency is also a live issue. An entity that claims treaty benefits based on tax residency in a third jurisdiction must now provide a current-year certificate of residence issued by that jurisdiction's competent authority. Certificates from prior years will not be accepted.
Foreign entities operating through Chilean corporate structures should also review their position under corporate law. Governance and ownership changes at the parent level may trigger separate disclosure obligations under corporate law in Chile.
To receive an expert assessment of your entity's exposure under Chile's new reporting rules, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
Companies with Chilean tax exposure should act before the April 2026 filing deadline. The following steps address the most critical risk areas.
- Map all Chilean income streams. Identify every payment received from Chilean sources during 2025 – dividends, royalties, interest, service fees – and confirm whether each stream crosses the disclosure threshold.
- Obtain current tax residency certificates. If your entity claims reduced withholding tax rates under a tax treaty, request an updated residence certificate from your home jurisdiction's tax authority now. Processing times vary and can take several weeks.
- Document beneficial ownership. Prepare a complete ownership chart tracing beneficial owners to the ultimate individual level. The tax authority may request supporting corporate records during review.
- Review transfer pricing documentation. Confirm that all related-party transactions during 2025 are supported by arm's-length analysis. Gaps in documentation are among the most frequently cited deficiencies in Chilean tax audits.
- Confirm permanent establishment status. Assess whether any commercial activity conducted in Chile during 2025 – including digital services, agent arrangements, or project work – has created a permanent establishment requiring separate registration and corporate income tax filing.
Companies with exposure across multiple Latin American jurisdictions should also review the regulatory alert on 2025 tax reporting requirements in the United States for context on how cross-border reporting obligations interact in a multi-jurisdictional structure.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our tax law practice covers corporate income tax planning, withholding tax structuring, tax treaty analysis, and cross-border compliance for foreign entities operating in Chile and across Latin America. Engaging a lawyer in Chile with cross-border experience is essential when new reporting rules alter established compliance positions. our team combines civil law expertise with practical knowledge of Chilean and Iberian tax systems to help international clients respond to regulatory change efficiently. As an international law firm with deep Americas coverage, Ferraz & Whitmore works with multinational groups, investment funds, and in-house counsel who need results-oriented advice across multiple legal systems. To discuss your compliance position under Chile's new tax reporting rules, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.