If an older guide, forum post, or even a broker’s own documentation tells you there’s no US-Chile tax treaty, that information is now outdated - the treaty is genuinely new. Signed in 2010, it spent over a decade stalled in the US Senate before finally being ratified and entering into force on December 19, 2023, with its withholding-tax provisions effective for amounts paid or credited from February 1, 2024 onward. For a Chilean investor in US stocks, this changed the picture meaningfully less than two years before this update was written.
This guide covers the treaty’s 15% individual dividend rate, the pension fund exemption it introduced, and broker access for Chilean residents using Interactive Brokers or eToro.
A Treaty Two Decades in the Making
The US and Chile signed their income tax treaty in 2010. What followed was an unusually long ratification delay in the US Senate - the treaty became entangled in unrelated Senate procedural disputes for over a decade before finally clearing that process. President Biden signed the ratification on December 19, 2023, and the treaty entered into force that same day, with withholding tax provisions taking effect February 1, 2024.
Why this history matters practically: any source describing US-Chile investment taxation from before 2024 is describing a no-treaty relationship that no longer exists. If you’re cross-referencing older material, or if a broker’s documentation hasn’t been updated, double-check the date - the 30% non-treaty default that would have applied before February 2024 has been replaced by treaty rates for anyone filing W-8BEN correctly now.
The Treaty: 15% on Dividends, With a Pension Exemption
| Income Type | Default US Rate | Treaty Rate (Portfolio) | Direct Corporate (10%+) |
|---|---|---|---|
| Dividends | 30% | 15% | 5% |
| Dividends (qualifying pension fund) | 30% | 0% | 0% |
| Capital gains (securities) | Generally not US-taxable for non-residents | Residence country only | Residence country only |
Sources: US-Chile Income Tax Treaty (signed 2010, in force December 19, 2023, effective for withholding February 1, 2024); IRS treaty text.
For an individual portfolio investor, claiming the 15% rate requires Form W-8BEN filed with your broker. Without it, the full 30% default applies from the first dividend payment - check your dividend statement to confirm which rate is actually being withheld, particularly if your account predates the treaty’s 2024 effective date and the broker hasn’t automatically updated your withholding rate.
The pension fund exemption is genuinely notable. Dividends paid to a qualifying pension fund are exempt from US withholding entirely - a provision that matters for Chile’s well-known AFP (Administradoras de Fondos de Pensiones) system if AFP funds hold qualifying US equity exposure, though this exemption is claimed at the fund level, not by an individual account holder directly. If you’re relying on AFP-held international exposure, the benefit (if applicable) flows through automatically at the fund level rather than requiring any action from you personally.
Chilean Tax on the Resulting Income
Chilean tax residents are taxed on worldwide income, including foreign dividends and capital gains from US stocks, under Chile’s income tax framework. A foreign tax credit is generally available for the US withholding already paid, reducing double taxation on the same income - now operating through the formal treaty mechanism rather than whatever unilateral relief (if any) applied before February 2024.
Which Brokers Accept Chilean Residents
Chile is supported for account opening at Interactive Brokers and eToro. Confirm current requirements directly before applying, since broker policies can change - and specifically confirm that your broker is correctly applying the 15% treaty rate rather than a stale 30% non-treaty rate if your account was opened before the treaty took effect in 2024.
Tidying Up the Chile Details
Working through it as a Chilean resident:
- Confirm W-8BEN is on file with your broker; verify 15%, not 30%, on dividend statements - especially important if your account predates February 2024
- If your account is older than the treaty, contact your broker to confirm the treaty rate is now being applied rather than an outdated 30% default
- Renew W-8BEN before the three-year expiry
- Report US dividends and capital gains as part of worldwide income on your Chilean tax return
- Claim the foreign tax credit for US withholding under the now-formal treaty mechanism
- If relying on AFP pension exposure to US equities, confirm with your AFP whether the treaty’s pension fund exemption is being applied at the fund level
- Ask the broker up front which Chilean documents it accepts as proof of address and tax ID
Stepping Back from the Chile Detail
The most important fact in this guide is the date: the US-Chile tax treaty is new, in force only since December 2023 and effective for withholding since February 2024, after more than a decade of Senate delay. Any information describing a no-treaty relationship between the two countries is now out of date. For a Chilean investor filing W-8BEN correctly today, the result is a standard, solid 15% dividend rate - the same treatment most Western European investors receive - plus a pension fund exemption worth understanding if AFP-held assets are part of the picture.
Offered as general orientation on investing from Chile, not as a professional view. Treaty rates are based on the US-Chile Income Tax Treaty (signed 2010, in force December 19, 2023). Chilean domestic tax rules for foreign-source income can change. Before acting, get a Chilean tax advisor to review the specifics.
Sources: US-Chile Income Tax Treaty text and IRS documentation; Crowell & Moring - Tax Treaty with Chile Enters Into Force; Herbert Smith Freehills Kramer - US-Chile Bilateral Income Tax Treaty Enters Into Force; CBIZ - A Breakthrough in Tax Relations: Understanding the US-Chile Income Tax Treaty; Duane Morris - The Long-Awaited Chile-US Income Tax Treaty Is Finally Making It to the Finish Line; PwC Chile Tax Summaries - Corporate Withholding Taxes (2026).
