Retiring in Chile
Chile: the tax picture for FIRE
Chile taxes resident individuals on a progressive scale (the Global Complementary Tax): roughly the first CLP 11.2 million is tax-free, then six bands run from 4% to a top rate of 35.5% on income more than about CLP 88.5 million above the allowance. Those cutoffs are fixed multiples of the inflation-indexed tax unit (UTA) and reprice monthly, so Ember's mid-2026 peso figures will drift from the live values. For investors the split matters: gains on Chilean-listed shares and funds attract a flat 10% single tax, while non-listed and foreign assets are taxed as ordinary income at up to 40% — though new residents are taxed on Chilean-source income only for their first three years.
Chile levies a progressive inheritance and gift tax, but Ember does not yet model it, and no UK-pension treaty position is coded. Living costs are modelled at 0.52 of UK levels (illustrative, low confidence). The income pack is a low-confidence draft: Chile's dividend imputation credit and deductible social contributions are unmodelled, over-stating tax on Chilean dividends and wages.
Income tax (2026)medium confidence
Tax-free allowance: CLP 11,607,138 (then bands apply to income above it).
| Band (above allowance) | Rate |
|---|---|
| CLP 0 – CLP 14,186,502 | 4% |
| CLP 14,186,502 – CLP 31,382,262 | 8% |
| CLP 31,382,262 – CLP 48,578,022 | 13.5% |
| CLP 48,578,022 – CLP 65,773,782 | 23% |
| CLP 65,773,782 – CLP 91,567,422 | 30.4% |
| CLP 91,567,422 – CLP 254,927,142 | 35% |
| above CLP 254,927,142 | 40% |
What this model doesn’t capture (11)
- Integrated corporate/personal tax system: dividends and business income carry a first-category corporate-tax credit (partial or full, depending on the SME/semi-integrated regime) against the Global Complementary Tax (IGC) — a credit mechanism, NOT modelled here (this pack treats income as if fully IGC-taxable with no imputation credit, over-stating tax on Chilean dividend/business income)
- Dividends flow into the IGC carrying the first-category credit and are handled by the bands above. Chilean-listed shares and mutual/investment-fund units are NOT taxed that way — Art. 107 LIR imposes a separate flat 10% impuesto unico on the mayor valor (SII Circulares 39/2022 and 31/2023, declared on Linea 66) — and that flat rate is carried in the engine's CGT dataset, not in this pack. The 10 UTA per year non-habitual and 8,000 UF real-estate exemptions are not modelled anywhere.
- UTA/UTM indexing: the IGC cutoffs are fixed multiples of the Unidad Tributaria Anual (13.5/30/50/70/90/120/310 UTA) and reprice monthly with CPI, so the peso figures depend on which vintage you anchor to. This pack uses the IN-FORCE income-year-2026 reading (owner ruling 2026-08-03): UTA CLP 859,788, the latest published 2026 value annualised (UTM agosto 2026 = 71,649 x 12), corroborated by SII's Agosto-2026 monthly Segunda Categoria table whose limits x 12 reproduce every cutoff exactly. The alternative vintage is SII's published ANNUAL Art. 52 table for Ano Tributario 2026, anchored on UTA diciembre 2025 = CLP 834,504 (2.9% lower), which governs income year 2025. The anchor is a single constant and every threshold is derived from it, so the refresh is one line: UTA diciembre 2026 is not yet published, and these figures are re-based on it when SII publishes the AT-2027 table.
- Bracket-level fixed statutory deductions (rebaja) that Chile applies per band are folded into the equivalent progressive-band representation here; the marginal-rate shape is preserved but the exact per-band subtraction constant is not carried separately
- Mandatory social/pension contributions are deductible before IGC and are NOT modelled, so the pre-tax base is over-stated: AFP approximately 10% plus the administrator commission and health (Fonasa or Isapre) 7%, both applied up to the tope imponible of 90.0 UF for 2026 (up from 87.8 UF in 2025, effective from February 2026 remunerations); unemployment insurance has a separate 135.2 UF cap.
- Impuesto Unico de Segunda Categoria (the monthly withholding tax on employment income) has the same rate scale but a monthly UTM base; only the annual IGC scale is modelled
- Foreign-tax-credit and non-resident Additional Tax (Impuesto Adicional, flat 35%) regimes not modelled
- Inheritance/gift tax (progressive, exists) and VAT (19%) out of scope for income-tax pack
- selfEmployment: no regime module — self-employed social contributions / business-income surcharges for this jurisdiction are not modelled
- The 7% mandatory health contribution is deducted from PENSIONS as well as wages and is not modelled here, so projected net pension income is over-stated for a Chilean-resident retiree. The state bonification that covers it is narrow: automatic only for PBSI/APSV/APSI recipients, and otherwise conditional on receiving PGU/BAC/CEV, being in the 80% most vulnerable by Puntaje de Focalizacion Previsional, age 65+, AFP or equivalent affiliation, and at least 20 years' residency in Chile including four of the last five. Members on an Isapre plan costing more than 7% also fund the excess themselves.
- Statutory IGC deductions and credits are not modelled, so tax is over-stated for anyone who qualifies (AT-2026 annual limits): the Art. 55 bis mortgage-interest deduction, up to 8 UTA (CLP 6,676,032) at the 0-90 UTA income bracket with income-dependent limits above it; the Art. 42 bis voluntary-pension-saving (APV) deduction, up to 600 UF (CLP 23,836,776); the Art. 50 presumed-expenses deduction for independent workers, up to 15 UTA (CLP 12,517,560); and the Art. 55 ter education credit of 4.4 UF (CLP 174,803) per child.
Capital gainsmedium confidence
Capital gains are taxed at 10%–40%.
Chilean-listed shares/funds: 10% flat single tax (Art 107, since Sep 2022). Non-listed and FOREIGN assets = ordinary income, progressive to 40% — the engine's conservative 'higher' slot (two-slot approximation, MX-style). 10 UTA/yr and 8,000 UF real-estate exemptions not modelled. New residents taxed on Chilean-source income only for first 3 years.
Inheritance & estate taxmedium confidence
Tax is charged on each recipient, scaled by their relationship to the deceased.
Recipient-level per-heir tax (asignación) on a 1–25% eight-band UTA-denominated scale (80/160/320/480/640/800/1200 UTA, then 25%), converted at UTA 2026 = CLP 859,788. No unlimited spouse exemption — spouse gets only the 50-UTA allowance. The 50-UTA class is cónyuge, conviviente civil sobreviviente (Ley 20.830, in force 21.10.2015), each ascendiente/adoptante and each hijo/adoptado or their descendencia — so the 'parent' relationship class (first-degree ascendiente/adoptante) carries exactly the spouse/child treatment here: the same 50-UTA mínimo exento and the same unsurcharged base scale. Grandparents and remoter ascendientes are in the same statutory class but are outside the engine's first-degree-only 'parent' class and still route to 'other' (see gaps). The statutory sibling +20% and unrelated +40% surcharges surcharge THE SCALE itself (art. 2: 'se aplicará la escala indicada en el inciso primero recargada en un 20%'); being fixed multipliers they are encoded here exactly by scaling every band rate ×1.2 (sibling) and ×1.4 (other).
When should you claim your Chile state pension?medium confidence
Chile Pensión Garantizada Universal (PGU)
Normal pension age 65. There is no actuarial claiming-age lever — the amount doesn't change with when you claim.
No claiming-age lever: the PGU (Ley 21.419) is a flat, non-contributory, residency-based floor with no early claim and no actuarial deferral uplift. NOT modelled: the means test (must be in the poorest 90%; tapers to zero above a base pension of CLP 1,252,602/mo, full amount only below CLP 789,139/mo), the eligibility rules (≥20 years' Chile residence from age 20, ≥4 of the last 5 years before applying), the higher CLP 250,275/mo rate at age 82+, and the annual February uprating of the peso amounts. The gender-differentiated AFP capitalisation pillar (DL 3.500, 65M/60F) is a separate, unmodelled scheme.
The best age to claim isn’t just about these factors — it depends on your life expectancy, your other income, and which country you’re tax-resident in when the money lands. Deferring into a lower-tax country can flip the answer entirely. Optimise your claim age →
Cost of living
52%
of a UK baseline (100%) — a rough, illustrative comparison, not a forecast.
UK private pension
Under the UK treaty, a UK-sourced private pension paid to a resident here is generally taxed only in the UK.
Common questions
How are capital gains taxed in Chile?
It depends on the asset. Gains on Chilean-listed shares and funds are taxed at a flat 10% single tax (in force since September 2022). Non-listed and foreign assets are treated as ordinary income and taxed progressively at up to 40% — Ember uses a conservative two-rate approximation for this split, and reliefs such as the 10 UTA annual exemption and the 8,000 UF real-estate exemption are not modelled (medium confidence).
Is there inheritance tax in Chile?
Yes — Chile levies a progressive inheritance and gift tax, but it sits outside Ember's current data: there is no Chilean estate pack coded, so death transfers are not modelled for Chile. Estate figures in a Chilean scenario therefore exclude Chilean inheritance and gift tax.
Is Chile cheaper to live in than the UK?
In Ember's data, yes: Chile carries a cost-of-living factor of 0.52 against the UK's 1.0 — roughly half UK costs. That 0.52 is illustrative and low confidence, a starting point for a Chilean FIRE budget rather than a substitute for a personal one.
What does Chile do to your FIRE date?
The free calculator compares your number across every covered country; the full planner models your actual accounts, pensions, residency moves and these exact tax rules — with the maths behind every figure shown.