ES
ENIllustrative, fictional case. An independent lawyer, habitually resident in the United Kingdom, moves to Chile and keeps serving his British clients from his home in Santiago, by video call and email. He is paid in pounds into a UK account; part of the money he transfers to Chile through Wise. He assumes that, since his clients and his account are abroad, the SII has no interest in that income.
Why that assumption is wrong
SII Ruling No. 275 of 2022 examined the case of a radiologist who moved to Chile from Spain and teleworked from the country, distinguishing between services provided as an employee and as an independent contractor under the Chile–Spain tax treaty. It is a useful reference on the article 10 LIR test — which looks at where the activity is carried out, not where the payer is domiciled or which account receives the money —, but it does not, on its own, resolve the treatment of an independent lawyer under the Chile–UK treaty, which has its own text and rules. The payment channel — Wise, a UK account, a direct transfer — does not, in any case, change the source of the income.
Classification of the case
| Element | Classification |
|---|---|
| Source of income | Chilean (art. 10 LIR): the service is physically provided from Chile, even though the client and payment are in the UK |
| Tax residency | Depends on actual days spent in Chile; if he exceeds 183 days in 12 months, he is a resident from day 184 (art. 8 No. 8 Tax Code) |
| First 3 years | If he is a foreigner and established domicile or residence in Chile, he is taxed only on Chilean-source income during that period — which in his case still includes this income, since it is already Chilean-source. This is a fact that needs confirming: the article 3, second paragraph, LIR benefit applies to foreigners; having been a "habitual resident" of another country before moving is not enough on its own |
| Applicable treaty | Chile–UK, in force since 01.01.2005; relevant if he is also taxed in the UK on the same income |
The foreign account argument doesn't protect him
Chile has participated since 2018 in the CRS standard for automatic exchange of financial information, now with over 140 jurisdictions, including the UK. Under that standard, it is the financial institutions subject to identification and reporting rules that inform the SII about accounts of people with foreign tax residency. The existence of this mechanism does not mean a specific Wise or UK bank account is automatically reported — that depends on whether the institution is subject to the standard and on its due-diligence procedures —, but it does show that being paid abroad is no guarantee of invisibility to the Service.
Related articles
- Start with the central guide to Chile's 183-day tax residency rule.
- Continue with a related article in this series.
Frequently asked questions
No, it does not change the Chilean-source classification; article 10 LIR does not require full-time dedication, only that the activity be carried out in the country.
That portion of income, generated while physically working outside Chile, could qualify as foreign-source; it is worth keeping a record of actual work days and locations.
Whether to claim the 3-year benefit for other income (dividends, investments) that is genuinely foreign-source, and how to correctly report the Chilean-source income from day one.
Do you need an assessment of your situation?
Each case depends on the dates, income types, country of origin and any applicable treaty. Izquierdo Deramond Consultores prepares tax opinions for foreigners who work or settle in Chile.
- Book a meeting: calendly.com/izquierdoconsultores
- WhatsApp: +56 9 8892 5401
- Email: gregorio@consultoresid.cl
This case is fictional and for informational purposes only. It does not constitute tax advice and does not reflect a real client's situation. The tax classification of any situation depends on its specific facts, the applicable treaty, and the law in force at the time of the transaction. To assess your case, request a tax opinion with IDC.
OFFICIAL SOURCES CONSULTED
- SII Ruling No. 275 of 2022
- art. 8 No. 8 Tax Code
- art. 3 and 10 of the Income Tax Law
- Chile–UK tax treaty
- SII — CRS standard for automatic exchange of financial information.