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Octubre 3, 2026 · Tributario

Over 183 days in Chile under a tax treaty: who taxes your salary, and how double tax is relieved

By Izquierdo Deramond Consultores

If you work in Chile for more than 183 days and your home country has a double taxation treaty with Chile, the treaty does not switch off Chilean tax. Chile can tax the salary attributable to work performed on its territory. What the treaty does is allocate taxing rights between the two countries and require relief from double taxation.

This is one of the most common assumptions among executives and professionals relocating to Chile: that a treaty means tax is paid only at home. Below we explain how the rules actually work, using the treaty between Chile and the United Kingdom as a worked example.

What is a double taxation treaty?

It is an agreement between two countries that allocates the right to tax each type of income and sets out how double taxation is eliminated. According to the official list published by Chile's tax authority, the Servicio de Impuestos Internos (SII), Chile has treaties in force with countries including Argentina, Brazil, Canada, China, France, Mexico, Peru, Spain, the United Kingdom and the United States.

The list changes over time, so always check the SII page before assuming a treaty applies. We cover these treaties in more depth in a dedicated article.

What does a treaty say about employment income?

Most of Chile's treaties follow the OECD Model. In the Chile–UK treaty, the rule is in Article 14, "Income from Employment". Numbering varies between treaties; in the OECD Model it is Article 15.

The rule has two parts:

  1. General rule. Salary is taxed in the employee's country of residence, unless the work is performed in the other country. If it is, that other country may also tax it.
  2. Short-stay exception. Salary for work performed in the other country is taxed only in the country of residence if three conditions are all met: the employee is present there for no more than 183 days in any 12-month period that begins or ends in the fiscal year concerned, the employer is not resident there, and the salary is not borne by a permanent establishment the employer has there.

So if you work in Chile for more than 183 days in a 12-month period, the exception no longer applies. Chile may tax the salary for the work you perform in Chile, even if a foreign company pays it.

Note that crossing 183 days is not the only way to lose the exception. If your employer is resident in Chile, or your salary is borne by a branch or establishment in Chile, Chile may tax it even for a shorter stay.

What if I am self-employed?

The Chile–UK treaty has no separate article for independent professional services. Instead, Article 5(3) sets two separate service permanent-establishment tests: independent services carried on in the other country for more than 183 days in any 12-month period, and services provided by an individual who is present there for more than 183 days in that period.

When that happens, Article 7 allows that country to tax the profits attributable to the permanent establishment. Other Chilean treaties have a dedicated article on these services. Article 14 of the Chile–Peru treaty, for example, generally caps the tax at 10% of the gross amount, but allows taxation in the other country where the individual has a fixed base there or stays there for 183 days or more in any 12-month period. A self-employed professional's position therefore has to be checked against the specific treaty.

Which country am I resident in for treaty purposes?

A treaty only applies to residents of one or both countries. Article 4 defines a resident as a person who, under that country's law, is taxed there by reason of domicile, residence or a similar criterion. It excludes people taxed there only on income from sources in that country.

That last sentence is decisive for foreign nationals in Chile. For the first three years after arrival, a foreign national with residence or domicile in Chile is taxed only on Chilean-source income, under Article 3 of the Income Tax Law. For that reason, the SII's Circular No. 63 of 2021 states that during this period they cannot be treated as Chilean residents for treaty purposes.

During those three years, the individual may be a treaty resident of the other country if they meet that country's domestic-law and treaty requirements; this should not be presumed from nationality alone. Chile may tax work performed on its territory, subject to domestic law and any applicable treaty limitations. We explain this further in our article on the three-year rule.

What if both countries treat me as resident?

When someone is resident in both countries under their domestic laws, the treaty applies tie-breaker tests in sequence. In the Chile–UK treaty, Article 4 sets this order:

  1. The country where you have a permanent home available to you.
  2. If you have one in both, the country with which your personal and economic relations are closer (centre of vital interests).
  3. If that cannot be determined, the country where you have a habitual abode.
  4. If you have a habitual abode in both or neither, the country of which you are a national.
  5. If none of these resolves it, the two tax authorities decide by mutual agreement.

The outcome turns on facts: where your family lives, where your home is, where your income and investments are concentrated. It pays to document these from the start.

How is double taxation relieved?

The treaty requires both countries to provide relief. Under Article 21 of the Chile–UK treaty, Chilean residents may credit UK tax against the corresponding Chilean tax, in accordance with Chilean law. The UK, in turn, gives credit for Chilean tax paid on Chilean-source income, in accordance with UK law.

In Chile, that credit is governed by Article 41 A of the Income Tax Law, which sets requirements and limits (SII Circular No. 31 of 2021). For individuals, it depends on the category of income: for employment income (Article 42 No. 1) it is credited against the reassessed Second Category Single Tax, subject to an individual cap; for independent income (Article 42 No. 2) it is credited against the Global Complementary Tax. Unused credit is not refundable and cannot be carried forward. The credit does not always offset the full amount of foreign tax, so the final outcome depends on the rates in both countries and the type of income.

Does the treaty apply automatically?

Not always. Depending on the case, proof of residence in the other country may be required. For example, for a Chilean payer to apply a treaty rate instead of standard withholding, SII Resolution No. 151 of 2020 requires a tax residence certificate issued by the other country's competent authority. In addition, for treaties covered by the OECD Multilateral Instrument (MLI), a principal purpose test may deny benefits where obtaining them was one of the main purposes of an arrangement, subject to each treaty's effective dates and reservations.

If you believe you are being taxed contrary to the treaty, you can request a mutual agreement procedure between the two tax authorities. Under the Chile–UK treaty, the procedure is in Article 23 and, as modified by the MLI, the case must be raised within three years of the first notification of the measure resulting in taxation not in accordance with the treaty.

At a glance

Situation Example: Chile–UK treaty, subject to all its conditions
Work in Chile up to 183 days, foreign employer with no establishment in Chile Generally taxed only in the country of residence
Work in Chile over 183 days in 12 months Chile may tax the salary for work performed in Chile
Employer resident in Chile, or salary borne by an establishment in Chile Chile may tax, even for stays under 183 days
Foreign national in first 3 years in Chile Not a Chilean resident for treaty purposes
Resident of both countries Article 4 tie-breaker tests apply

Two different tests: Chile’s domestic residency threshold must not be confused with the treaty’s short-stay exception. All conditions of that exception must be met; the measurement period and article numbering must be checked in each treaty. The table above uses the Chile–UK treaty as an example, not a universal rule.

Frequently asked questions

Not necessarily. Under the Chile–UK treaty example, exceeding 183 days within the specified period prevents use of the short-stay exception, and Chile may tax work performed there. Check the specific treaty and its double-tax relief mechanism.

It is one condition, but is not sufficient. Under the Chile–UK treaty, the presence limit must also be met and pay must not be borne by the employer’s Chilean permanent establishment. Other treaties require individual review.

No. Most follow the OECD Model, but each has its own numbering, thresholds and rules for independent services. The specific treaty must always be checked.

Need to know how your country's treaty applies?

The outcome depends on your country, your employer, your dates in Chile and the applicable treaty. At Izquierdo Deramond Consultores we prepare tax opinions for foreign nationals working in Chile, including an analysis of the treaty that applies to their case.

This article is for general information only and does not constitute tax or legal advice. The Chile–UK treaty is used purely as an example. Each person's situation depends on their particular facts, the applicable treaty and the law in force at the time of the analysis.

OFFICIAL SOURCES CONSULTED

Explore our international tax advice and written opinions service in Chile. Editorial review: 6 October 2026.

Izquierdo Deramond Consultores
This publication provides general information and is not professional advice.
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