Chile Forum

With regard on taxes

Any person or company, living in Chile who generate incomes is subjet to taxation, particullary the income tax (global complementario) who is paid once a year. For personas with incomes under some US$ 2000 a month they are usually exempt and dont pay nothing.

For independent workers giving services they may tribute in "segunda categoria" that is giving "boleta de servicios" (services receipt), they are not oblied to carry full accounting but "simplified accounting" (just a sales book) and they have to deposit 10% of the charged, monthly, to Fisco as "pago provisional mensual" that is, a provisory payment in advance for income tax payable in march of the next year, the Servicio de Impuestos Internos calculates your total incomes based on those declared payments, disccount an amount of your presumed or real expenses for the running of your business (presumed is -if my memory dont fail- 30%) and calculate your net incomes: then compares with a table as show in http://www.sii.cl/pagina/valores/global/igc2008.htm

So according your yearly income, you have to pay: 0%, 5%, 10%...etc. up to 40% (the highest rate) to this payment you have some "cantidad a rebajar" so, in practical terms few people pays actually income tax, except the most wealthy

I remember a while back one of the wealthier guys in Chile saying that only like 1% of even the wealthiest people pay that 40% tax, because of tax shelters, breaks, and just good money management.

For businesses that earn money outside of the country, they are required to repatriate the earnings at the end of they year to Chile and declare the taxes. Tourism businesses that are paid outside the country are required to do this also. Even this, with good planning can be alleviated though things like reinvestment outside the country and such. Still, they are techinically required to pay taxes on those also, if they had residency. Thus, the scam these guys where running was never to quite trip the tax requirement by never getting their work permits and such completed.

Hi Gloria!

As Charles said just a very few people pay high income tax because there are a lot of exceptions, this tax affect mostly to employees who receive high salaries (such as congressmen ) but for independent workers or entrepreneurs with a sound accounting this tax is very low to none. A complete and clear view of chilean tax law can be seen at http://html.rincondelvago.com/declaraci ... nsual.html it is just in Spanish but I plan to translate in the future.

If you have earnings in Chile may be 3 main situations
1-Primera Categoría, when your product or services pay Value Added Tax (IVA), you are required full accounting system, which implies some kind of accounting service. You have to pay VAT (19% your sales minus 195 your purchases) monthly in any comercial bank
2-Segunda categoria, if you are individua, independient and give any kind of service you have to pay monthly 10% of the value of your monthly invoices (boletas de servicio) in any comercial bank, as PPM as described in my former post
3-Employeee, you have not to worry on how much you pay because is automatically discounted every month

If you are craftsman or such (pequeños talleres, artesanos) you only has to pay 3% of the invoiced in a very simplified tax procedure

If your activity is "economic advisor" you have not to pay tax, is an exempt activity

tombrad2 wrote:. . . . If you are craftsman or such (pequeños talleres, artesanos) you only has to pay 3% of the invoiced in a very simplified tax procedure . . . .

Ah, three percent! I wonder if I could craft an argument that a teacher is a craftsman . . . .

hire yourself an accountant. They are cheap in chile. We even met one if futa that had an agreement to do the taxes with the guy who was known for the best asado in the region. He charged him one asado a year for handling his small tourism business taxes.

Most everything is done online in Chile. My time to do my taxes for the U.S. was like 4 days last year. My time to do my taxes in Chile was about 5 mins, plus the time to pick up my refund check and spend it.

I just checked my declaration for this year, I had forgotten, it tacked to me less than 5 minutes to check and click "Aceptar" to the pre-made declaration

This system is one of the delights in Chile

RWS educational services are tax free in Chile, but for owners of institutes, not for teachers anyway some kind of technical advisory are tax extents, don't pay any tax

I was afraid that I, a simple teacher-to-be of history and literature, would be hit with a heavier tax burden! Perhaps if I were to open my own educational institute, then . . . .

To give classes you have to obtain "boletas de servicios" with 10 percent retention. Usually is your employeer who made the retention so you have not to worry about nothing, except to check the amount of your refund in march of every year at http://sii.cl to click "Aceptar" and wait for your check by april/may

You may also issue "boleta de servicios electronica" no needed to have it in paper, all by Internet

There are certain classes of service that it is mandatory to issue electronic boletas. Computer services for instance. They figure you are in computers, you can figure out how to use their web site. Even if you are in that class, and giving it to someone who wants paper you just print it out and mail it to them rather than emailing it to them through the IRS web site.

According to this article the Chilean IRS is investigating if they will be charged.

http://www.pr-inside.com/u-s-citizens-o ... 485072.htm

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