This tax will be levied on the total net worth in Chile and abroad of individuals with domicile or residence in Chile, when it exceeds 6,000 UTAs (USD 4.5 million) as of December 31 each calendar year.

1. Total net worth calculation

Tax Base = Assets – Permitted Liabilities

Assets

• All the assets to which the taxpayer is directly or indirectly entitled.

The revocable or irrevocable status of trusts or other fiduciary assignments shall be taken into account. The estate of revocable trusts will be included in the tax base of the settlor, while in the case of irrevocable trusts, it will be included in the tax base of the beneficiaries.

• It includes the net wealth of un-emancipated children, who are still subject to parental authority.
• Assets acquired by inheritance or gift are only excluded in the business year that inheritance or donation tax has been paid. Individual mandatory retirement savings and individual mandatory severance savings are also excluded.
• Assets must be calculated according to their financial value and comply with the rules established by law.

Liabilities

• Liabilities may be deducted provided they are not payable to a related party and have been used to finance the acquisition or the expansion and repair of any asset included in the estate.

The IRS may challenge the method used by the taxpayer to value one or more assets or liabilities if it considers that it is inappropriate for computing their financial value and a more suitable method will be established.

2. Tax base and rates

•  If it does not exceed 6,000 UTA (USD 4.5 million) is exempt.
• The portion that exceeds 6,000 UTA (USD 4.5 million) but does not exceed 18,000 UTA (USD 13.5 million) is taxed at a rate of 1%.
• The portion that exceeds 18,000 UTA (USD 13.5 million) is taxed at a rate of 1.8%.

3. Credits against Estate Tax

The taxpayer may offset the following taxes against this tax:

1. Property tax and property tax surcharge.
2. Tax on luxury vehicles under Article 9 of Law 21,420.

• Deferral tax of 1.8% on retained earnings.

4. Tax accrual

This tax will accrue from December 31 of each calendar year and must be declared and paid in June of the following year. When filing the tax return, the taxpayer may request to defer paying this tax for up to 3 months.

5. Affidavit

Individuals whose net worth exceeds 4,000 UTA (USD 3 million) as of December each calendar year will also be required to file an affidavit, even if they are not subject to this tax.

6. Loss of domicile or residence

Individuals with a net worth that exceeds UTA 6,000 (USD 4.5 million) who lose their domicile or residence in Chile will be subject to a tax of 5% on their net worth.

Such taxpayers must file an application describing the circumstances that led to their loss of domicile or residence. This administrative request must be accompanied by a computation of their net worth in accordance with this wealth tax rules and proof of payment of this tax.

The IRS must deny the request and return the tax if the loss of domicile or residence cannot be proven.

If the taxpayer loses their residence or domicile in Chile without requesting and paying the 5% tax, they will be subject to the Estate Tax for three years from the date the IRS becomes aware of this loss of domicile or residence.

7. Effective date

These taxes will become effective as of January 1, 2024, on a net worth determined as of December 31, 2023.

During the first year, this tax will only be applied to an estate that exceeds UTA 18,000 (USD 13.5 million) at a rate of 1.8%.