A practitioner's guide to transfer pricing in Chile — Article 41 E as rewritten by Law 21.713, the SII's four annual affidavits, the statutory interquartile range and the 40% single tax on adjustments.
Transfer pricing risk work and advance pricing agreements sit with the Departamento de Análisis de Riesgos Internacionales y Grupos Empresariales; the Dirección de Grandes Contribuyentes handles large taxpayers, Customs co-signs APAs covering imported goods, and appeals go to the Tribunales Tributarios y Aduaneros.
Resolución Exenta SII N°28 of 6 March 2025, resolutivo 6°Nine numbered paragraphs cover relatedness, methods, studies, adjustments, appeal, annual affidavits, APAs, corresponding adjustments and, newly, taxpayer self-adjustment.
Article 41 E, Ley sobre Impuesto a la Renta (SII consolidated text, February 2025)The single consolidated instruction on Article 41 E. It revoked Circular N°29 of 2013 and governs determinations made from 1 November 2024, so pre-2025 practice notes are superseded.
SII Circular N°10 of 2025Three cumulative elements are needed for the SII to act: the transaction is cross-border, the parties are related, and pricing is not at market. There is no domestic-to-domestic regime, and business reorganisations and restructurings are expressly in scope.
Article 41 E, first to third paragraphs, LIR; Circular N°10, para. 1A counterparty resident or incorporated in a listed preferential-regime jurisdiction is deemed related whatever the actual relationship. The list was reissued by Resolución Exenta SII N°30 of 6 March 2025, effective for tax purposes from 1 January 2025, replacing the 2018 and 2024 lists.
Article 41 E No. 1 LIR; Resolución Exenta SII N°30 of 2025The OECD profile records that the Guidelines have no formal status in Chilean law, yet Circular N°10 cites the 2022 edition throughout. A position resting on a Guidelines paragraph alone is weaker here than in a jurisdiction that incorporates them.
SII Circular N°10 of 2025; OECD country profile (October 2025)The residual category is open only where the named methods are unusable and the taxpayer justifies that conclusion. Before challenging a price the SII must first issue a citación under Tax Code Article 63.
Article 41 E No. 2 LIRCircular N°10 lists the weighing criteria: each method's strengths and weaknesses, fit with the transaction type, information availability, existence of comparables, tested-party selection, years of financial data, ranges and comparability adjustments.
Article 41 E No. 2, final paragraph, LIR; Circular N°10, para. 6Internal comparables must be reviewed before external ones. Adjustments are permitted but never required, and only where differences materially affect the comparison — each must be relevant, quantified and supported. No preference for domestic comparables, and secret comparables cannot be used in assessments.
SII Circular N°10 of 2025, para. 5.1Form 1907 codes the tested party for cost plus, resale price and TNMM (1 = Chilean taxpayer, 2 = foreign related party) and asks whether the analysis was global or segmented. A global analysis is accepted only where dealings are too closely linked to value separately.
Circular N°10, paras. 5.1(d) and 5.2; DJ 1907 instructionsA result outside the first-to-third quartile band is not at arm's length. Where the taxpayer accepts the analysis and amends its return the adjustment can land on an agreed point in the range; a liquidación or resolution always lands on the median.
Article 41 E No. 4 LIR; Circular N°10, para. 9.1The OECD profile ticks 'No' to domestic guidance on each topic while stating the corresponding chapters are followed. There is no simplified low value-adding intra-group services regime and no hard-to-value intangibles approach.
OECD Transfer Pricing Country Profile — Chile (October 2025)Article 41 F excess-indebtedness rules operate alongside Article 41 E. These rates and thresholds are as reported in the October 2025 OECD profile and were not re-verified against the current domestic text, so confirm before relying on them.
Articles 59 and 41 F LIR, per OECD country profile (October 2025)Master and local file follow TPG Annexes I and II. A formal transfer pricing study is optional under Article 41 E No. 3, but the complete underlying record set, including records of the foreign related parties, must be retained and produced on request.
Article 41 E No. 3 LIR; Resolución Exenta SII N°101 of 2020Filed by a Chilean-resident ultimate parent or a Chilean entity designated sole surrogate filer. There is no secondary or local CbC filing obligation, so Chilean subsidiaries of foreign-parented groups do not file Form 1937. Note the conversion uses a fixed historical rate, not a current one.
Resolución Exenta SII N°101 of 2020; Resolución Exenta SII N°126 of 2016; DJ 1937 instructionsMeasured at 31 December: Large Enterprise segment; a group parent required to file a CbC report with the SII or another administration; and transactions above the peso threshold, converted at the Banco Central de Chile parity for 31 December of the reported year.
Resolución Exenta SII N°101 of 2020, resolutivo 2°Segments come from Resolución Exenta SII N°76 of 2017 (large: annual income of at least 60,000 UTM, taxable equity of at least 300,000 UTM or purchases of at least 60,000 UTM). Article 41 H counterparties count toward the peso threshold, and segment status alone triggers filing with no monetary floor. Form 1907's format, content and filling instructions were replaced by Resolución Exenta SII N°104 of 26 August 2025 with effect from tax year 2026 (commercial year 2025 onward).
DJ 1907 instructions (Anexo 14 to Res. Ex. SII N°104 of 2025, replacing Anexo 5 to Res. Ex. SII N°96 of 2023); Res. Ex. SII N°76 of 2017Resolución Exenta SII N°64 of 2024 treats filing between 1 July and 30 September as the Article 41 E No. 6 extension request, with no separate application. The extension also extends the SII's twelve-month audit window under Tax Code Article 59(a), counted from the original due date.
Article 41 E No. 6 LIR; Resolución Exenta SII N°64 of 2024Affidavits are filed through Declaraciones Juradas de Renta on www.sii.cl, with annexes and supporting documents uploaded to the electronic file in Mi SII. The SII may require a Spanish translation under Tax Code Article 8 bis No. 4(e), allowing a period proportionate to the volume.
Resolución Exenta SII N°101 of 2020, resolutivos 4°–6°Applies to non-filing and to late, incomplete or erroneous filing. At the August 2026 UTA of CLP 859,788 the band is roughly CLP 8.6 million to CLP 43.0 million, but the fine is set in UTA. A maliciously false affidavit falls under Tax Code Article 97 No. 4 — 100% to 300% of tax evaded plus imprisonment.
Article 41 E No. 6 LIR; Circular N°10, para. 10.2; SII UTA table 2026Charged in the year of the transactions, outside the first category base and the RAI register, so shareholder-level taxation is untouched and Chile needs no classic secondary adjustment. Adjustments have no effect for taxes outside the Income Tax Law, and Customs Ordinance Article 92 quáter leaves declared import and export values unchanged.
Article 41 E No. 4 LIR; Circular N°10, paras. 9.2–9.2.3Relief requires the Article 41 E No. 6 affidavits plus the material supporting them, delivered in full and in the form requested, within the deadlines in the requirement or notification or within the one-month citación period (extendable once by up to a further month). It is won or lost in the opening weeks of an audit.
Article 41 E No. 4, seventh paragraph, LIR; Circular N°10, paras. 9.2.4–9.3Article 41 E No. 9 allows adjustment to a single figure or any point in the interquartile range, added to the first category base. Downward adjustments that reduce taxable income or increase a loss are prohibited, and a later SII adjustment bites only on the excess. The October 2025 OECD profile still answers 'No' to year-end adjustments, which is hard to reconcile with this regime.
Article 41 E No. 9 LIR; Circular N°10, para. 12.3A citación under Tax Code Article 63 extends the applicable period by three months, plus any extension granted for the reply, and only for the operations identified in the citación.
Article 200, Código Tributario, as explained in SII Circular N°73 of 2001Resolución Exenta SII N°28 of 6 March 2025 sets the procedure and adds a voluntary pre-filing consultation by email to area.apa@sii.cl, answered on viability within two months. Silence at twelve months means rejection, and rejection cannot be appealed, though the taxpayer may reapply.
Article 41 E No. 7 LIR; Resolución Exenta SII N°28 of 2025No Article 21 single tax, penalty interest or fines apply to rolled-back periods. Renewal must be requested at least six months before expiry. While the agreement is in force neither the SII nor Customs may determine differences on covered transactions, and annual compliance reporting is a condition of survival.
Resolución Exenta SII N°28 of 2025, resolutivos 8°–16°The Tax Compliance Management Plan release of 29 January 2026 reported 8 agreements signed between January and October 2025 — three more than in 2024 — and 23 since 2019, four of them bilateral; the July 2026 mining conference updated the cumulative count to 24. The SII says it will keep promoting APAs, particularly bilateral ones.
SII press releases of 29 January 2026 (Plan de Gestión de Cumplimiento Tributario 2026) and 20 July 2026 (SII–Cochilco APA conference)Article 41 E No. 8 requires that no appeal be pending, that the treaty not prohibit the adjustment and that the SII apply the Article 41 E methods. Refusal is not appealable; refunds are indexed to CPI. Unilateral downward corresponding adjustments outside MAP are not available.
Article 41 E No. 8 LIR; Circular N°10, para. 12.2Circular N°13 of 2022 as amended by Circular N°19 of 2023 covers transfer pricing cases expressly. MAP does not suspend or interrupt domestic time limits and domestic remedies do not suspend MAP, so protective filings must run in parallel. Refunds are claimed under Tax Code Article 126 within three years.
SII Circulars N°13 of 2022 and N°19 of 2023Book III Tax Code procedure, with appeal to the Court of Appeals and cassation to the Supreme Court, against assessments, resolutions, indexation, interest and fines. The SII's treaty page and the October 2025 OECD profile agree on 37 conventions in force, all using the pre-2010 Article 7 without the authorised OECD approach. The MLI entered into force for Chile on 1 March 2021.
Article 41 E No. 5 LIR; Circular N°10, para. 10.3; SII page on international conventionsTogether these introduced the express arm's length principle, the statutory interquartile range, self-adjustment, the rebuilt APA procedure, the 5% adjustment fine with documentation relief and a new Article 41 H list. No further transfer pricing instrument had issued by August 2026.
SII indexes of 2026 circulars and resolutionsNo GloBE legislation, circular or resolution has appeared, and Law 21.713 contained none. The bill before Congress cuts the first category rate from 27% to 23% and integrates the imputation system. Chilean subsidiaries of in-scope groups face top-up tax collected abroad; the finding rests on absence of any SII instrument rather than a positive statement.
SII indexes of 2026 circulars and resolutionsArticle 41 E still requires a best-method analysis for baseline marketing and distribution. The OECD profile records that Chile respects the simplified and streamlined approach applied by covered jurisdictions but not by others.
OECD Transfer Pricing Country Profile — Chile (October 2025)The six sectors are vehicles and parts; technology; pharmaceuticals, supplies and medical equipment; food and non-alcoholic beverages; personal care and hygiene; and alcoholic beverages. The 57% is CLP 9.8 billones of the CLP 17.3 billones of related-party finished-goods purchases, not 57% of distributors; the taxpayers covered represent 25% to 30% of Chile's imports of goods for distribution. Distributors are classified routine, intermediate-function or specialised, with operating profitability placed in low, medium or high risk bands; around a third of those screened warranted reinforced monitoring, and enforcement will concentrate on cases showing simultaneous financial and tax losses. The SII controlled 46 business groups in 2025 against 28 in 2024.
SII press releases of 23 June 2026 and 29 January 2026Chile concentrates its transfer pricing law in one provision: Article 41 E of the Ley sobre Impuesto a la Renta (Decree Law No. 824 of 1974). Law No. 21.713, published on 24 October 2024, rewrote that article for transactions from 1 November 2024, and it now runs to nine paragraphs, from relatedness and methods through adjustments and affidavits to advance pricing agreements and, for the first time, taxpayer self-adjustment. Its administrative counterpart is Circular N°10 of 30 January 2025, which consolidates all Article 41 E guidance and revoked Circular N°29 of 2013.
The rule bites only where three elements coincide: the transaction crosses the Chilean border, the counterparty is related, and the pricing departs from arm's length. There is no domestic-to-domestic regime. The 2024 amendment added an express statutory formula — the prices, values or returns independent parties would have agreed in comparable circumstances, judged on markets, functions, assets, risks and product characteristics. Business reorganisations are named in the statute, so migrations of functions, assets or risks into or out of Chile, and the termination or substantial modification of intercompany contracts, fall within the Servicio de Impuestos Internos (SII) mandate.
Relatedness under Article 41 E No. 1 is wide: direct or indirect participation in management, control, capital, profits or income; head offices and their permanent establishments; back-to-back structures routed through a third party; and deemed relatedness for any counterparty in an Article 41 H preferential-regime jurisdiction, listed by Resolución Exenta SII N°30 of 6 March 2025. That limb catches wholly unconnected parties. The OECD Guidelines are not enacted in Chile and Article 41 E does not incorporate them; Circular N°10 cites them constantly as interpretive reference — a different thing when an argument rests on a Guidelines paragraph alone.
Article 41 E No. 2 lists six methods: comparable uncontrolled price, resale price, cost plus, profit split, transactional net margin, and a residual category available only where the named methods are unusable and the taxpayer justifies that. Chile applies a best-method rule with no hierarchy, and Circular N°10 sets out the weighing criteria: each method's strengths and weaknesses, fit with the transaction type, information availability, comparables, tested party, years of data, ranges and adjustments. Before challenging a price the SII must issue a citación under Tax Code Article 63.
Comparability follows a ten-step sequence modelled on paragraph 3.4 of the Guidelines, running from functional delineation through tested-party selection to internal comparables before external ones. Adjustments are permitted but never required, and only where the difference materially affects the comparison — the SII treats numerous or large adjustments as evidence the comparable is not comparable. While no rule prefers local data, the SII's 2026 sector indicators are built on Chilean distributors, so a Chilean tested party benchmarked wholly on foreign comparables should expect questions.
The interquartile range is now statutory. With a single comparable the adjustment may be to that figure; with two or more the range must be used, and a result outside the first-to-third quartile band is not arm's length. The asymmetry that follows is the most important negotiating fact in Chilean transfer pricing: if the taxpayer accepts the SII's analysis and amends its return, the adjustment goes to a point in the range agreed with the SII; if the SII assesses, it goes to the median.
Four annual sworn statements are required. Form 1907, the transfer pricing affidavit, is the broadest: due from taxpayers in the Medium or Large Enterprise segments that had any Article 41 E transaction with a foreign related party, and from everyone else whose cross-border related-party dealings — counting Article 41 H jurisdictions — exceed CLP 500,000,000. Its format and instructions were replaced by Resolución Exenta SII N°104 of 26 August 2025 with effect from tax year 2026, so check the current layout before mapping data. Forms 1950 (master file) and 1937 (country-by-country report) apply to a Chilean-resident ultimate parent of a group with consolidated revenues of at least EUR 750 million, or to a Chilean designated surrogate filer. Form 1951 (local file) needs three cumulative conditions at 31 December: Large Enterprise segment, a group parent obliged to file a CbC report somewhere, and foreign related-party transactions above CLP 200,000,000.
Conversions matter: the EUR 750 million tests use the rate observed on 1 January 2015 published by the Banco Central de Chile, a fixed historical CLP 738.05 per euro, while the peso thresholds use the parity in force on 31 December of the reported year. There is no secondary or local CbC filing obligation: only a Chilean parent or designated surrogate files Form 1937.
All four are due by the last business day of June for the preceding commercial year. Article 41 E No. 6 allows one extension of up to three months, and Resolución Exenta SII N°64 of 2024 made it effectively automatic: filing between 1 July and 30 September is itself treated as the request. The extension also pushes out the SII's twelve-month audit window under Article 59(a) of the Tax Code, which cuts both ways. A formal study is optional under Article 41 E No. 3; retaining the underlying records, including those of the foreign related parties, is not.
Failure to file an affidavit, or filing it late, incomplete or erroneously, attracts a fine of 10 to 50 annual tax units, capped at the greater of 15% of tax equity or 5% of effective capital.
The charge on a substantive adjustment is unusual. A transfer pricing difference is taxed in the year of the transactions solely with the single tax of Article 21, first paragraph, at 40%. It does not enter first category taxable income and does not join the RAI register, so shareholder-level taxation is undisturbed — which is why Chile needs no classic secondary adjustment. Adjustments have no effect for taxes outside the Income Tax Law, and Article 92 quáter of the Customs Ordinance confirms they leave declared import and export values alone.
Layered on top is a 5% fine on the difference, imposed by the seventh paragraph of Article 41 E No. 4, which disappears entirely where the taxpayer supplied the requested records duly and timely during the audit, including those called for by the citación. Circular N°10 defines the relief precisely: the affidavits plus supporting material, delivered in full and in the form requested, within the requirement deadline or the one-month citación period. It is a genuinely earnable penalty defence, won or lost in the first weeks of an audit.
Article 41 E No. 9 is the other new lever. A taxpayer identifying non-arm's-length pricing may self-adjust to a single figure or any point in the range, provided it acts before any SII requirement directed at transfer pricing; the adjustment must increase the first category base, and downward adjustments are barred. If the SII later assesses more, only the excess bears the 40% tax. Enforcement is meanwhile intensifying: 46 business groups controlled in 2025 against 28 in 2024, plus a new valuation area.
Chile's advance pricing agreement programme was rebuilt by Law 21.713 and Resolución Exenta SII N°28 of 6 March 2025. A voluntary pre-filing consultation now sits at the front: the taxpayer emails the SII form to area.apa@sii.cl and gets a view on viability within two months. Unilateral, bilateral and multilateral agreements are available, foreign administrations engaged only at the applicant's express request. The SII must sign the acta or reject within twelve months of certifying the file complete; silence means rejection, and rejection cannot be appealed, though the taxpayer may reapply. An agreement covers the year of signature plus four and may be rolled back up to three years, with no Article 21 single tax, interest or fines on the rolled-back periods. Uptake is now real: eight agreements signed in 2025, and twenty-four in total as at July 2026, four of them bilateral on the January 2026 count.
Where a foreign administration has already adjusted, Article 41 E No. 8 permits a corresponding adjustment in Chile, but only with prior SII authorisation of nature and amount, under a treaty permitting it, once the foreign adjustment is final, and within one year; unilateral downward adjustments outside that route or MAP are barred. MAP practice sits in Circular N°13 of 2022 as amended by Circular N°19 of 2023: requests go to the Director of the SII and no payment of the disputed tax is required. The trap is that MAP neither suspends nor interrupts domestic time limits, and domestic remedies do not suspend the MAP window — protective filings must run in parallel.
Domestically, Article 41 E No. 5 routes challenges through the general procedure before the Tribunales Tributarios y Aduaneros, against the liquidación or resolución and the taxes, indexation, interest and fines. Published case law is thin and instructive on process rather than pricing: in 2015 the Los Lagos tax court annulled chip-export assessments because the SII had neither established relatedness nor identified the method it applied.
As at August 2026 Chile has not enacted GloBE rules. No implementing statute, circular or resolution has appeared, and Law 21.713 contained none; the legislation before Congress concerns a phased cut in the first category rate from 27% to 23% and full integration of the imputation system, not a minimum top-up tax. Chilean subsidiaries of in-scope groups are therefore exposed to top-up tax collected elsewhere — itself a planning fact.
Amount B stands similarly. Chile has not adopted the simplified and streamlined approach, and Article 41 E still demands a best-method analysis for baseline distribution; the OECD profile records that Chile respects Amount B outcomes from covered jurisdictions but not from others. What Chile built instead is its own screen — the June 2026 industry reference indicators, classifying distributors as routine, intermediate-function or specialised and placing operating profitability in low, medium or high risk bands across six sectors: vehicles and parts, technology, pharmaceuticals and medical equipment, food and non-alcoholic beverages, personal care and hygiene, and alcoholic beverages. Those sectors account for 57% by value of related-party finished-goods purchases for distribution — CLP 9.8 billones of CLP 17.3 billones — and the taxpayers covered represent a quarter to a third of Chile's imports of goods for distribution. It is a risk tool, not a safe harbour, and the SII points those wanting certainty to the APA programme. Around a third of those screened warranted reinforced monitoring.
Three priorities follow. First, re-paper the basics against the 2025 framework rather than the 2013 one: refresh the relatedness mapping to capture Article 41 H counterparties and back-to-back chains, and confirm the entity's SII segment, because segment status alone triggers Form 1907 with no monetary threshold.
Second, treat documentation as penalty insurance. The 5% adjustment fine is switched off by producing complete records on time, so the audit response protocol belongs in place before an audit starts. Where a benchmark is weak, self-adjustment under Article 41 E No. 9 converts a 40% single-tax exposure into an ordinary increase in the first category base, but only if taken before the SII asks.
Third, price the range asymmetry into strategy. Because an assessed adjustment lands on the median while an agreed one can land anywhere in the range, early engagement pays, and for distributors now visible in the sector indicators an APA with rollback is the cleanest way to close historical exposure. One discrepancy in the public record is worth noting: the October 2025 OECD profile reports Chile as neither requiring nor allowing year-end adjustments, which is hard to square with self-adjustment in force since November 2024.
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This guide is general information for professionals, verified against the sources above as at the date shown; it is not legal or tax advice on any specific matter.