Starting January 1, 2025, workers in Chile who issue electronic invoices will see an increase in their withholding tax rate. According to the Internal Revenue Service (SII), the withholding rate will rise from 13.75% to 14.5%.
What does this withholding system consist of?
The gradual increase in the withholding is part of Law No. 21,133, which was enacted on February 2, 2019. This law ensures that fee-paid workers are included in Social Protection regimes, granting them to the same benefits as salaried employees. These benefits include:
- Family allowances
- Social Insurance against Occupational Accident Risks and Occupational Diseases (ATEP)
- Disability, survivorship, and old age pensions
- Mortuary quota
- Health system
Objectives of this measure
According to the regulations, contributions will continue to gradually be increased by 0.75% for each year, reaching a limit of 17% in 2028. However, it should be noted that this change will not affect the special case of company directors’ invoices, whose withholding has been frozen at 10%.
In order to help taxpayers adjust to this change, the SII has introduced an online tool on its sii.cl portal. Therefore, Individuals issuing invoices (either personally or via a third party) can use this system to ensure accurate withholding calculations, simplifying compliance with the new regulations.
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All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.