Advances in Transfer Pricing in Chile and its Tax Impact

April 30, 2024

Introduction to Chilean Regulations

Chile has evolved significantly in its Transfer Pricing legislation since the first regulation in 1998 with substantial changes in 2012 and 2013 to align with OECD guidelines. This legal framework seeks to ensure that transactions between Related Parties are valued at market prices, avoiding tax base erosion.  

Implications of Law 20,630

Law 20,630, enacted in 2012, introduced detailed definitions and specific obligations regarding Transfer Pricing. This law includes the obligation to file an Annual Informative Affidavit, named DJ 1907, which has been instrumental in increasing transparency and improving tax compliance for multinational companies operating in Chile.  

Taxation and Penalties

The Chilean Internal Revenue Service has strengthened its enforcement capacity through the Large Taxpayers Directorate, conducting audits focused on high-risk transactions. Penalties for non-compliance include significant fines, which can reach up to 300% of the tax evaded for false declarations.  

Documentation Requirements

Chilean law requires companies to maintain and submit detailed documentation supporting their Transfer Pricing policies. This documentation must be available in Spanish and must be submitted annually to corroborate that transactions have been carried out in accordance with the arm’s length principle.


The Transfer Pricing regime in Chile represents a significant challenge for companies, but also offers an opportunity to ensure tax compliance and reduce legal risks. Alignment with international standards also facilitates the global operations of Chilean companies.