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Legal ReferenceArticle 41 E of the Chilean Income Tax Law

Legal ReferenceCircular No. 10

Circular No. 10 of January 30, 2025, which instructs on transfer pricing rules contained in the Income Tax Law, includes references to the OECD Transfer Pricing Guidelines (TPG): methods, comparability analysis, and use of ranges and definition of transfer prices. However, OECD TPG do not have any administrative or legal status over domestic law.

Legal ReferenceChilean Income Tax Law Circular No. 10

The taxpayer domiciled and resident in Chile will be considered related to its counterpart in the following cases: a) When one of the parties participates directly or indirectly in the direction, control, capital, profits or income of the other party; b) When the same person or persons participate directly or indirectly in the direction, control, capital, profits or income of both parties, all of them being related to each other; c) When the operations are carried out between an agency, branch or any other form of permanent establishment with its parent company; with other permanent establishments of the same parent company; with related parties of the latter and permanent establishments of those; d) When, whether exists or not a direct or indirect relationship between the parties, the operations are carried out with resident, domiciled, established or incorporated parties in a listed country or territory, regardless of whether or not they are part of the same business group. e) Among the parties involved, when a party carries out one or more transactions with a third party which carries out, directly or indirectly, with a related party, one or more operations similar or identical to those carried out with the first, whatever the quality in which said third party and the parties intervene in such operations.

Legal ReferenceArticle 41 E, Number 2, of the Chilean Income Tax Law Circular No. 10

Other Methods, when the characteristics and circumstances of the case are met, it is not possible to apply any of the aforementioned methods (CUP, Resale Price, Cost Plus, TNMM or Profit Split), the taxpayer may determine the prices or values of his operations using other methods that reasonably allow to determine or estimate the prices or normal values of market that have or would have agreed to independent parties in comparable transactions and circumstances. In such qualified cases, the taxpayer must justify that the characteristics and special circumstances of the operations do not allow applying the foregoing methods.

• CUP (provided)
• Resale Price (provided)
• Cost Plus (provided)
• TNMM (provided)
• Profit Split (provided)
• Other (provided)

Legal ReferenceArticle 41 E, Number 2, of the Chilean Income Tax Law Circular No. 10

In Chilean legislation, the taxpayer must use the most appropriate method considering the characteristics and circumstances of the particular case.

• Hierarchy of methods (not selected)
• Most appropriate method (selected)

For controlled transactions involving commodities, the guidance contained in paragraphs 2.18-2.22 of the TPG is followed.

Legal ReferenceCircular No. 10, Paragraph 5.1: Comparability analysis.

Paragraph 5.1 of Circular 10 of 2025 states that for further information on conducting comparability analysis, please refer to paragraph 3.4 of the 2022 OECD TPG.

Legal ReferenceArticle 41 E, Number 4, of the Chilean Income Tax Law

Chile’s legislation allows the use of an arm´s length range and statistical measures for determining arm´s length remuneration.

The use of comparability adjustments is allowed if they improve comparability.

Chile follows the recommendations of Chapter VI of the OECD TPG.

Chile follows the recommendations of Chapter VII of the OECD TPG.

Chile follows the recommendations of Chapter X of the OECD TPG.

Legal ReferenceArticle 59 of the and Article 41 F of the Chilean Income Tax

A 35% withholding tax normally applies to the gross interest payment, i.e. without any deductions allowed. However, under Article 59 of the LIR, a 4% rate is applicable in the case of loans granted from abroad by foreign or international banking or financial institutions. The Chilean taxpayer should maintain a threshold of debt to equity of 3:1.

Chile follows the recommendations of Chapter VIII of the OECD TPG.

Chilean legislation requires a specific transfer pricing affidavit, Form 1907.

• Master file consistent with Annex I to Chapter V of the TPG (selected)
• Local file consistent with Annex II to Chapter V of the TPG (selected)
• Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
• Specific transfer pricing returns (separate or annexed to the tax return) (not selected)
• Other (specify): (selected)

Legal ReferenceResolución Exenta N° 96, 2025 Master File Instructions as of 2020 Local File Instructions as of 2025 CbC File Instructions as of 2025 Transfer pricing affidavit file as of 2025

Master File (Form 1950) - Threshold: a) if the revenues of entities of an MNE Group that are part of said group in Chile and abroad, exceeded the amount of EUR 750 million... or well b) to the entity that integrates or belongs to the GEM, that has residence in Chile for tax purposes, and that has been designated by the parent or controlling entity... Local File (Form 1951) - Threshold: must be submitted by the taxpayers who, as of December 31 of the reporting year, meet the following copulative conditions: a) Belong to the Large Companies segment; b) Its parent or controlling entity of the MNE has had to submit the Country-by-Country Report... and, c) That in said year they have carried out one or more operations with related parties that do not have domicile or residence in Chile... for amounts greater than CLP 200 000 000... CbC (Form 1937) - Threshold: a) if the revenues of the set of entities of an MNE Group that are part of said group in Chile, exceeded the amount of EUR 750 million... or well b) to the entity that integrates or belongs to the MNE, that has residence in Chile for tax purposes, and that has been designated by the parent or controlling entity... Transfer pricing affidavit (Form 1907) - Threshold: a) Taxpayers who... belong to the Medium-Sized or Large-Sized Enterprise segments and who... have carried out transactions with related parties that are not domiciled or resident in Chile... b) Taxpayers who... have carried out transactions... that together exceed CLP 500 000 000... Timing: the timing to submit the Master/Local/CbC/ Transfer pricing file sworn statements and their annexes, will expire on the last business day of the month of June of each year... Language: the documentation must be submitted in Spanish or English, and the Internal Revenue Service may expressly require their translation into Spanish... In the case of Form 1907 Transfer pricing affidavit, must be submitted in Spanish.

Legal ReferenceArticle 41 E, Number 6, of the Chilean Income Tax Law Circular 29 of 2022

Chilean legislation has specific penalties regarding transfer pricing documentation. Article 41E N°6 mentions that non-submission, erroneous, incomplete or late submission will be sanctioned with a fine. Specific penalties are found in Circular 29 of 2022.

Legal ReferenceArticle 41 E, Number 3, of the Chilean Income Tax Law

All thresholds are detailed in question N°30. Additionally, in the case of transfer pricing studies or reports, Article 41E, N° 3 of the Income Tax Law establishes that submitting a transfer pricing study for transactions with related parties is not an obligation. Taxpayers are required to keep supporting information on their transactions and make them available to the tax authority upon request.

Legal ReferenceChile’s MAP Profile

Specific information about APA programme is published in Chile MAP profile.

• Rulings (not selected)
• Enhanced engagement or cooperative compliance programmes (not selected)
• Advance Pricing Agreements (APA) (selected)
• Unilateral APAs (selected)
• Bilateral APAs (selected)
• Multilateral APAs (selected)
• International Compliance Assurance Programme (ICAP) (selected)
• Mutual Agreement Procedures (selected)

• N/A (selected)

• N/A (selected)

Chile follows the AOA to the extent that it is compatible with the wording of Article 7 OECD MTC prior to the changes in 2010.

• Article 7 as it read before 2010. (selected)
• Article 7 as it reads after 2010. (not selected)

Chile has reserved its right to use the previous version of Article 7. All Chilean tax treaties (37) thus include rules for the allocation of business profits based on the “old” Article 7 OECD MTC.

Legal ReferenceIncome tax law Circular 40/2021

The domestic regulation for permanent establishments is mainly contained in the articles 2 and 38 of the Chilean Income Tax Law (LIR) and in Circular No. 40 of 2021 of the Internal Revenue Service.