Legal & Tax Guide for Freelancers in Chile

Tax Regime

General Regime (Income Tax)

Second Category (independent workers):

• Bracket 1 (up to ~$11,000 USD/year): Exempt
• Bracket 2: 4%
• Progressive brackets: Up to 40% for high income

12.25% withholding:

• Chilean payer withholds 10% (tax) + 2.25% (mandatory contributions)
• Foreign client: you pay directly in April (tax filing)

14 ter Regime

For small businesses:

• Income up to ~$2,300M CLP/year
• Flat 25% on profits

Legal Structure

Boleta de Honorarios (Individual)

Most common:

Process:

1. Valid RUT
2. Start activities at sii.cl (form F4415)
3. Activity code: 620100 (Software development)
4. Electronic invoicing auto-enabled

Obligations:

• Issue boleta for each payment
• Monthly provisional payment (PPM): 10% gross income
• Annual declaration (Form 22) in April
• Mandatory pension contribution (AFP + Health): ~17%

EIRL (Individual Limited Liability)

• Limited liability
• Better for high income
• Setup cost: $250-625 USD

Banking

USD Accounts

Chilean banks:

• Banco de Chile: Dollar account, Swift transfers
• Santander: USD checking account, ~1.5% fees
• BCI: Good international transfer rates

Fintechs (recommended):

• Wise: Best exchange rate, 0.5-1% fees
• Payoneer: US/EU client payments
• Mach: Chilean digital account
• Mercado Pago: Multi-currency wallet

No currency controls:

• Chile has one of LATAM's freest FX markets
• Can hold USD in local accounts
• Voluntary CLP conversion

Setup:

1. Wise for receiving USD with low cost
2. Traditional Chilean bank for USD and CLP accounts
3. Mach or Mercado Pago for daily expenses

Invoicing

Electronic Boleta de Honorarios

Mandatory:

• SII portal: sii.cl/servicios_online
• Mobile app: SII Móvil

Data required:

• Payer's RUT (foreign: 55.555.555-5 generic)
• Gross amount in Chilean pesos
• Description: "Professional software development services"
• 12.25% withholding (you do it if client is foreign)

For foreign clients:

• No VAT (professional services exempt in Chile)
• Convert USD to CLP at day's exchange rate
• Keep proof of international transfer

PPM (Monthly Provisional Payment)

• Pay 10% of gross income each month
• Form 29 at SII
• Deducted from annual tax in April

Resources

Official Portals

• SII: sii.cl
• Start activities: sii.cl/servicios_online
• Electronic invoices: boletas-honorarios.cl

Accounting Platforms

• Nubox: Automated accounting, from $20 USD/month
• Defontana: ERP for SMEs

FAQs

Do I need municipal license?

No, if working from home providing professional services.

Can I issue boletas while employed part-time?

Yes, you can have employment contract and issue boletas simultaneously. They're independent income.

How much to save for taxes?

• Monthly PPM: 10% gross income
• Contributions: ~17% (AFP + Health)
• Total: Save ~30% to be safe

What if I don't issue boleta?

SII fines: 100% of evaded tax plus interest. Not worth the risk.

Is EIRL worth it?

If billing over $37,000 USD/year, probably yes for tax optimization. Consult accountant.

Update: February 11, 2026. Check sii.cl for regulatory changes.