Independent workers in Chile are facing a decrease in tax refunds for the upcoming 2026 tax season. This trend is driven by the gradual increase in withholdings used to cover mandatory social security obligations.
Higher contributions to pension funds (AFP), healthcare, and disability and survivor insurance are reducing the surplus that the Internal Revenue Service (SII) returns to taxpayers. Since 2019, the percentage of these contributions has been increasing annually.
“One of the biggest mistakes is assuming that your refund will equal the amount withheld. In practice, that money is first used to cover social security contributions, such as healthcare and pensions, so the final amount could be significantly lower or even zero,” explained Camila Cárdenas, Litigation Director and partner at SoyHonorario.
There are scenarios where the refund disappears entirely if mandatory contributions consume all withholdings or if the worker opts for full coverage of their contributions.
Withholding factors and common mistakes
The Treasury may also withhold refund funds to cover outstanding debts. Common causes include unpaid child support, student loans, or court orders.
Errors in banking information and inconsistencies in income reporting also impact the process. Cárdenas warns that taxpayers should not automatically accept the SII's proposal without a thorough review.
“It is essential to review the SII's proposal before accepting it. It often contains inconsistencies or incomplete information that can harm the taxpayer. The final responsibility always lies with the individual, not the system,” the specialist noted.
To avoid penalties, taxpayers must ensure all their invoices are registered, that reported income matches what was issued, and that their social security and banking information is up to date.