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5.1. Tax Base for Resident Entities

A resident company is subject to corporate tax (also referred to as first category tax - FCT) in Chile on its worldwide income, unless specifically exempt or otherwise relieved from tax.

The starting point for the determination of taxable income is generally the taxpayer’s accounting records. The tax base is defined as gross income less direct costs of goods and services and expenses necessary for the production of the income, as adjusted for inflation and for specific tax law measures. Chilean-source income is recognized on accrual basis, whilst foreign-source income is generally recognized on a received basis, except for foreign permanent establishment income which is generally recognized on an accrual basis.

The same rules apply to SMEs (i.e., companies with average annual sales between 2400 UF* and 100,000 UF, with the following variations:

  • SMEs may elect to declare income on a simplified accounting basis;
  • Chilean source income is taxed on a cash basis; and
  • Fixed assets may be fully depreciated in the year of acquisition.

Note - The Unidad de Fomento (UF) is an indexed unit equal to CLP 31,619.9 as on 6 March 2022. The current and historical UF values can be accessed here Spanish].


Dividends received from Chilean residents are exempt from tax. Dividends received from non-resident subsidiaries are treated as ordinary income.

Capital Gains

Capital gains are generally treated as ordinary income, but taxation at a final fixed rate or exemption is available in certain circumstances.

Mining Tax

Mining companies are subject to a specific mining tax (called operational tax) at progressive rates ranging from 0% to 14%, depending on the amount of the sales and the operating margin of the taxpayer.. The mining tax is over and above the corporate tax, and is deductible for corporate tax purposes.