This Official Letter reinforces the importance of aligning the nature of the employment relationship with its correct tax treatment.
On January 21, 2026, the Internal Revenue Service (SII) issued Official Letter No. 146, ruling on the admissibility as an expense of certain disbursements usually associated with employment relationships, in the case of a partner who works in the company and receives a business salary.
In the case analyzed, the Service assumes that the partner who receives a business salary does not, in principle, have the status of an employee.
Under this assumption, no rights inherent to an employment relationship are generated, which explains the criteria adopted by the SII regarding payments that can—and cannot—be accepted as expenses.
- Payments NOT accepted as necessary expenses for generating income
The Official Letter indicates that the following cannot be deducted as necessary expenses:
- Severance pay for years of service paid to the partner, as this corresponds to a right inherent to the termination of an employment contract.
- Unemployment insurance for the partner, as this is a benefit provided for dependent workers governed by the Labor Code.
In both cases, these disbursements may be subject to treatment as rejected expenses, with the potential application of Article 21 of the Income Tax Law (“LIR”), as appropriate.
2. Payments that MAY be accepted: transportation and meals
The SII states that transportation and meal allowances may be accepted as expenses, provided they are properly structured and supported.
In particular, they must:
- Be part of the business salary (form part of the partner’s remuneration).
- Be treated as income subject to the Single Second Category Tax (not as “non-income income”).
- Meet the criteria of reasonableness in accordance with Article 31 No. 6 of the Income Tax Law and the instructions issued in Circular 37 of 2020 of the SII.
This Official Letter is particularly relevant in practice because it reinforces the need to align the nature of the employment relationship with the correct tax treatment.
When concepts specific to dependent workers are used, but the intention is to treat them as business salary expenses, this is precisely where observations may arise and there is a risk that the SII will classify the disbursements as rejected expenses.
If you deduct expenses associated with business salaries, we recommend reviewing the concepts used, their documentation, and their tax treatment to reduce contingencies in the event of audits or inspections.
For more information, please contact our Tax and Labor team:
Jorge Arredondo | Partner | jarredondo@az.cl
Andrea Bobadilla | Director Tax Group | abobadilla@az.cl
Jocelyn Aros | Director Labor Group | jaros@az.cl
Catalina Rojas | Senior Associate Tax Group | crojas@az.cl
Felipe Neira | Senior Associate Labor Group | fneira@az.cl
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