Chile's 3-Year Tax Regime for New Residents
Discover the 3-year tax benefit available to new residents in Chile — how it works, who qualifies, and how to request an extension.
Every foreign national who becomes a tax resident in Chile gets a benefit that most people discover too late — and end up wasting through lack of planning. During the first three years, Chile taxes the new resident only on Chilean-source income, leaving salaries, rents, dividends, and gains held abroad out of scope. It’s a genuine window for wealth planning, but one with counting and extension rules that, if ignored, end the benefit without warning.
What the law says
Article 3 of the Income Tax Law (Ley sobre Impuesto a la Renta, LIR), governed by Decreto Ley 824, establishes:
“A foreign national who establishes domicile or residency in the country, during the first three years counted from their entry into Chile, shall be subject only to taxes levied on income obtained from Chilean sources. This period may be extended by the Regional Director in qualified cases.”
Outside that period, the general rule under the same article prevails: anyone domiciled or resident in Chile pays tax on income of any origin, Chilean or foreign.
Who is entitled to the benefit
- The benefit is exclusive to foreign nationals — it does not apply to Chileans returning to the country after a period abroad.
- It applies to anyone establishing domicile or residency in Chile, under the criteria of Article 8, N.° 8, of the Tax Code (residency: more than 183 days within 12 months) and Article 59 of the Civil Code (domicile: residency combined with the intention to remain).
- The three-year period is counted from the date of entry into the country, evidenced through immigration documentation — not from the date the person completes the 183 days that make them a resident.
What counts as Chilean-source income (and what doesn’t)
During the exception period, what remains taxed in Chile is only Chilean-source income, under Article 10 of the LIR: assets located in Chile and activities physically carried out in the country. This includes, for example, salary for work physically performed in Chilean territory or rent from a property located in Chile — even while the person is still within the three-year exception period.
What falls outside the exception: returns on investments held abroad, rent from properties outside Chile, dividends from foreign companies, and pensions of foreign source.
How to request an extension
The period may be extended by the SII’s Regional Director in qualified cases, but the SII’s administrative case law is clear on one point: the request must be filed before the three-year period expires. Once the period lapses without an extension request, the general rule automatically applies, and there is no way to reverse it retroactively.
There is no closed list of “qualified cases” in the law — the assessment is at the Regional Director’s discretion, which makes it all the more important to gather consistent documentation and justification before filing the request.
A little-known side effect: you’re not a “resident” for treaty purposes
A detail that’s often overlooked: during the three-year exception period, the SII considers that the person is not treated as a resident of Chile for purposes of Double Taxation Treaties — precisely because, during that period, they aren’t taxed on worldwide income in the country. This can directly affect which country has taxing priority over certain income during the transition, especially for those coming from a country with a treaty in force with Chile.
Disclaimer: the assessment of “qualified cases” for an extension is at the SII’s discretion and may vary according to recent administrative case law. Check the current circular before filing the request.
Comparison: inside vs. outside the exception period
| Situation | What’s taxed in Chile |
|---|---|
| Within the first 3 years (or an approved extension) | Chilean-source income only |
| After the period expires (without an extension) | Worldwide income — any origin |
| A Chilean national returning to the country | The general rule applies from day one — the benefit does not apply |
Frequently asked questions
Is the benefit automatic, or do I need to apply for it?
It’s automatic for foreign nationals who establish domicile or residency — no initial application is required. An extension beyond the three years does require a formal request.
Can I lose the benefit before the 3 years are up if I travel a lot outside Chile?
Losing the benefit is tied to the three-year period expiring, not to individual trips. But extended absences can interact with the rules on losing residency — see our article on how tax residency in Chile can be lost.
Does this also apply to investments I bring into Chile during the 3 years?
Assets and capital brought into Chile and invested in the country generate Chilean-source income from that point on, on the returns generated locally — the benefit only protects what continues generating income outside Chile.
Next steps
Defining the right strategy for the first three years — what to bring into Chile, what to keep abroad, and when (or whether) to request an extension — is a decision that needs to be made before the move, not after. Global & Co. structures this planning for people of many nationalities relocating to Chile. See also our complete guide on Chile-Brazil tax residency.
This content is for informational purposes only and was prepared based on the legislation in force as of its publication date. It does not constitute legal, tax, or accounting advice. Each situation should be individually assessed by qualified professionals.