Chile Personal Tax Guide 2026 — Impuesto Global Complementario

Overview of the Global Complementario Tax

The Impuesto Global Complementario (IGC) is Chile's progressive personal income tax that consolidates all taxable income earned by a resident individual — including salaries, business profits, investment income, rental income, and capital gains. It is administered by the Servicio de Impuestos Internos (SII). The tax is calculated on an annual basis (calendar year, January–December) and filed through the annual Operación Renta process each April.

Chile uses a semi-integrated system: the Impuesto de Primera Categoría (Corporate Tax) paid at the company level is partially creditable against the Global Complementario for resident individual shareholders. This avoids full double taxation of corporate profits. For 2026, the corporate tax rate is 25%, and resident individuals may claim a credit for the corporate tax attributed to their distributed dividends.

2026 Tax Brackets — Impuesto Global Complementario

The IGC brackets are expressed in UTM (Unidad Tributaria Mensual), which is inflation-indexed. For 2026, 1 UTM is approximately CLP 66,000 (value adjusted monthly by the CPI). The brackets and marginal rates are:

• 0% — Up to 13.5 UTM (approx. CLP 891,000 annual)
• 4% — 13.5 to 30 UTM (approx. CLP 891,001 to CLP 1,980,000)
• 8% — 30 to 50 UTM (approx. CLP 1,980,001 to CLP 3,300,000)
• 13.5% — 50 to 70 UTM (approx. CLP 3,300,001 to CLP 4,620,000)
• 23% — 70 to 90 UTM (approx. CLP 4,620,001 to CLP 5,940,000)
• 30% — 90 to 120 UTM (approx. CLP 5,940,001 to CLP 7,920,000)
• 35% — 120 to 310 UTM (approx. CLP 7,920,001 to CLP 20,460,000)
• 40% — Over 310 UTM (over approx. CLP 20,460,000)

The brackets and UTM values are updated annually by the SII. The tax is progressive — each portion of income within a bracket is taxed at that bracket's marginal rate. The effective rate is the weighted average of the marginal rates applied to each bracket.

Personal Exemptions and Allowances

• Personal allowance: A basic exemption (rebaja) is available for all taxpayers. For 2026, the annual exemption is approximately 13.5 UTM (the zero-rate bracket). This means the first ~CLP 891,000 of annual income is tax-free.
• Family allowances: Taxpayers may claim additional allowances for dependents (spouse, children, parents) subject to specific conditions. The allowances reduce the tax base or provide direct credits depending on the taxpayer's circumstances.
• Social security contributions: Mandatory contributions to AFP (pension), FONASA/ISAPRE (health insurance), and the solidarity fund are deductible from taxable income. These contributions typically total 17–20% of salary.
• Voluntary pension savings (APV): Contributions to Apoyo Previsional Voluntario (APV) accounts are deductible up to certain limits, providing both an immediate tax deduction and long-term retirement savings. The maximum annual deduction is approximately 600 UTM or 50% of total contributions, whichever is lower.

Monthly Withholding — Retención en la Fuente

Employers are required to withhold monthly provisional payments from employee salaries based on SII tables (Tabla de Impuesto Único de Segunda Categoría). The withholding is calculated considering the employee's annual projected income, personal allowances, and social security contributions. The amounts withheld during the year are credited against the final IGC liability when filing the annual Operación Renta.

For self-employed individuals and those with non-salary income, the SII may require Pagos Provisionales Mensuales (PPM) — monthly provisional payments based on the previous year's income or estimated current-year income. These PPMs are also credited against the final IGC liability.

Annual Reconciliation — Operación Renta

The Operación Renta is Chile's annual tax filing process, typically running from 1 April to 30 April each year (for the previous calendar year's income). Taxpayers file Form 22 (F22) electronically through the SII website. The process reconciles all income earned during the year, credits for taxes already withheld or paid (PPM), and any applicable deductions or credits.

• Information return: The SII pre-fills the tax return with information from employers, banks, financial institutions, and other third parties. Taxpayers must verify and adjust the pre-filled data.
• Tax result: If total credits (withholdings + PPMs + corporate tax credits) exceed the calculated IGC liability, the taxpayer receives a refund. If the liability exceeds the credits, the taxpayer must pay the difference.
• Deadlines: The standard deadline is the last business day of April. Extensions are not generally granted, though the SII may announce special schedules. Late filing carries penalties starting at 10% of the tax due.

Semi-Integrated System

Chile's tax system is semi-integrated, meaning corporate-level tax (Impuesto de Primera Categoría) is partially creditable against personal income tax (Global Complementario) when profits are distributed as dividends. For 2026:

• Corporate tax rate: 25% on taxable profits.
• Shareholder integration: Resident individuals who receive dividends may claim a credit for the corporate tax paid on the distributed profits. The credit is calculated as the corporate tax attributable to the dividend (25% of the grossed-up dividend).
• Effective tax on dividends: For a resident individual in the top 40% bracket, the combined corporate + personal tax on distributed profits is approximately 35–40%, depending on the credit mechanism. The integration reduces the effective rate compared to a classical double-taxation system.
• Non-resident shareholders: Non-residents are subject to a separate withholding tax regime (Impuesto Adicional) on dividends, typically 35%, with a partial credit for the corporate tax paid (varies by tax treaty).

Special Tax Regimes

• Second Category Tax (Impuesto Único de Segunda Categoría): This is the withholding tax on employment income, applied at progressive rates identical to the IGC brackets. It is a final tax for salary earners who have no other income — they do not need to file an annual IGC return if all tax was correctly withheld.
• Simplified regime for small taxpayers: The Pro-Pyme regime allows qualifying small businesses (annual sales under approximately 75,000 UTM) to pay reduced First Category Tax rates of 10–20% and simplified tax compliance.
• Rental income: Rental income from real estate is included in the IGC base. A deemed expense deduction of 10% of rental income is allowed, plus actual maintenance costs and mortgage interest.

FAQs

What is the difference between Global Complementario and Second Category Tax?

Second Category Tax (Impuesto Único de Segunda Categoría) is the withholding tax on salary and pension income only, applied at the same progressive rates as the IGC. For employees with no other income, the Second Category Tax is final — no annual return is needed. The IGC applies when the taxpayer has income from multiple sources (salary + investments + rental income, etc.). The Second Category Tax withheld during the year is credited against the final IGC liability.

How is UTM different from UF?

UTM (Unidad Tributaria Mensual) is used for tax brackets, fines, and monthly tax values. UF (Unidad de Fomento) is used for financial transactions, mortgages, and long-term contracts. Both are inflation-indexed, but UF is adjusted daily while UTM is adjusted monthly. For 2026, 1 UTM ≈ CLP 66,000 and 1 UF ≈ CLP 38,000 (approximate values — they change monthly/daily).

Can I deduct mortgage interest from my income?

Mortgage interest on a primary residence is not directly deductible from personal income for IGC purposes. However, if the property generates rental income, mortgage interest can be deducted against that rental income. The lack of mortgage interest deduction for owner-occupied housing is a notable difference from many other tax systems.

What is the deadline for filing Operación Renta?

The standard deadline is the last business day of April each year. The SII typically opens the filing system on 1 April. Taxpayers who are due a refund can file earlier (from mid-March in some cases). Late filing penalties start at 10% of the tax due, increasing over time. The SII may announce staggered filing schedules based on the taxpayer's RUT (tax ID number) last digit.

Are foreign taxes creditable?

Yes, Chile provides a foreign tax credit (Crédito por Impuestos Pagados en el Extranjero) for income taxes paid abroad on foreign-source income. The credit is limited to the Chilean IGC attributable to that foreign income. Chile has double tax treaties with over 30 countries, including the US, UK, Canada, Mexico, Spain, and several Latin American nations, which govern the allocation of taxing rights and credit mechanisms.

Disclaimer

This guide provides general information about Chile's personal income tax system for the 2026 tax year. Tax laws, UTM values, brackets, and rates are subject to change. The examples provided are illustrative and may not reflect your specific circumstances. Always consult a qualified Chilean tax advisor (contador auditor) or the SII directly for advice specific to your situation. InvestmentKit does not provide tax advice.