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Chile: Tax treatment of terminated insurance contracts; other tax developments

Summary of recent tax developments

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March 18, 2026

Official Letter No. 22/2026 provides that if an insured unilaterally terminates an insurance contract, the proportional reduction of the original premium constitutes a discount, and the insurer must issue a credit note at the moment the contract termination takes effect, which will serve to reduce the tax liability for the period in which it is issued.

If the termination occurs by mutual agreement, and the amount corresponding to the rescinded services must be refunded to the insured, such amount may be deducted as long as the insurer issues a credit note to document the refund at the time the funds are refunded.

Read a February 2026 report (Spanish) prepared by the KPMG member firm in Chile

Other tax-related developments discussed in this report include:

  • Circular No. 4/2026: Tax treatment of expenses, donations, and losses resulting from fires
  • Official Letter No. 24/2026: Late issuance of purchase invoices and the deduction of unrecoverable value added tax (VAT) as an expense
  • Official Letter No. 145/2026: Issuance of electronic tax documents on behalf of third parties in intermediation operations
  • Official Letter Nos. 205-208/2026: Valuation powers in international corporate reorganizations
  • Official Letter No. 141/2026: Valuation powers and application of the general anti-avoidance rule (GAAR) in family business reorganizations
  • Official Letter No. 143/2026: Valuation powers regarding the contribution of shares in a Chilean company

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