Chile

Employment income

Items such as reimbursements of travel expenses and housing provided in the employer’s sole interest, moving expenses, and a reasonable relocation allowance are considered non-taxable income and are excluded from the tax calculation.

Items such as cost-of-living allowance, area allowances, car allowance, vacation travel expenses, and utilities are taxable.

Capital gains

There is no capital gains tax in Chile. Capital gains are taxed as normal income unless they are qualified by law as non-taxable income.

Certain gains on the sale of traded shares of Chilean corporations are tax exempted.

Dividend income

Dividend income is taxed as normal income.

Interest income

In the case of interest, only ’real interest’ (i.e. interest effectively paid less cost-of-living increase) is taxed as normal income.

Exempt income

Specific tax treatment of exemption could be applied for share sales, dividends, mutual funds withdrawals, voluntary pension contributions (APV) withdrawals, and other capital gains obtained by a resident if the employee has only obtained dependant salary income.

As of 1 January 2017, the Tax Reform eliminates all benefits established under Article 57 bis of the Chilean Income Tax Law.

However, as of 1 October 2014, new Article 54 bis of the Chilean Income Tax Law is in force, providing a series of benefits that encourage savings by individuals, as it provides that the profits obtained due to the investment in certain securities are not subject to taxation as long as they (i) are not withdrawn, (ii) continue invested in such instruments or are reinvested in instruments of the same type, and (iii) other requirements are met.