Chile Forum

Hi, does anybody know of a good accountant or tax advisor that they could recommend? I have invested in an apartment in Santiago Centro which I am looking to rent on a daily or weekly basis principally to tourists or business travellers. I'd like to find out what tax implications this might have, and how best to set things up so that I can (legally!) make the most of any tax break opportunities.

Any advice or recommendations gratefully received.

If you are a USA citizen or consider yourself to be one for Income Tax purposes, download IRS Publication 527. It's available at http://www.irs.gov

Nope, I am a UK citizen, permanent resident in Chile. So will be paying any tax to the SII.

Hi, don't know about real estate tax, but for our (chilean) income tax last year, we used Price Waterhouse Coopers. They were incredibly easy to deal with and have accountants and assistants who can speak english quite well, if that is required. Good luck.

Thanks for the tip Steph. How much do they charge? I didn't realise that they dealt with individuals - I thought they were a more corporate-focused business.

I don't mind if they don't speak English by the way, Spanish is one of the few things my thick head has managed to learn over the last few years!!

PWC are not known for their individual services, definitely more of a corporate group, but they do it for sure. Unsure of the costs in Chile, in aus it is minimum $500 for a tax return, but then that fee is deductable in the tax year that you pay it. So long term, you pay for one year's tax fees, get the fee back the next year and pay again... etc. gotta love taxation. maybe that's just australia, but i doubt it. I would post a link to their contacts page for chile, but technically in a round about way they probably compete on some level with Admin's own business, so I won't do that. but i am sure you can use google as easily as I can.

http://www.pwc.com/cl/es/index.jhtml

There you go. Actually surprisingly they are not competitors, but thanks for asking anyway.

We specialize in individuals, and we don't do tax work like they do. They are more geared towards mid to large size corporations. We are geared towards small business and private individuals. Typically investments under a million or two by private individuals, and more exactly personalize legal work for private individuals and their families. For example, I doubt PWC has done much international family law lately, where it is a big chunk of our business is dedicated to family law type stuff.

Believe it or not we found international corporate clients to be kind of a pain to deal with. We have had a few international fortune 500 type contracts for various specialized stuff that companies like PWC are not equipped to handle. It was not that much fun to tell you the truth.

We found that most people we deal with in the companies they are not actually spending their money and don't care all that much, and half the time are not authorized to really spend it if they do. When a private individual is investing their own money, moving their family, or starting their own business, they can normally make decisions directly without checking with anyone else, we can then do the work immediately, and they pay us without us needing to chase them. Basically (surprise, surprise) the biggest riches companies in the World don't pay their bills on time, and are complete pain to collect from.

The corporate world by comparison likes making everyone play this supply chain credit circle jerk game, where you bill them and then they make everyone wait 6 months while they get paid by the dozen or so other companies that are jerking them around, and it all hopefully trickles down to the little guys like us. It is really grand credit scam (AIG, Citi bank, GM come to mind as example of it here). Luckily, our niche is sufficiently solid that we don't need to play those games, and I seriously feel sorry for all the businesses in the World that have to put up with that world. So, the PWC can have those clients. We won't turn them away, just they are not our primary market.

yeah figured that you guys were definitely a more tailor-made type business, PWC is like the mcdonalds of accounting, but wasn't sure how fuzzy the line was with regard to links...

Thanks admin and Steph for your replies. I'll check PWC out to see what they can offer. Admin, am I right in concluding therefore that you guys don't handle tax matters? Do you have any good contacts for someone who does?

Anyone else have any ideas?

We have Chilean tax attorneys that handle our incorporation type planning for clients when needed. That is about as far as we go. Even at that, most of the time the Chilean tax issues are so simple you don't need any complex tax planning schemes.

In Chile, you need to understand that tax system is fairly straight forward, and a lot less complex. Most of the people that do taxes, although refereed to as "accountants" in Chile are essentially book keepers. They are a dime a dozen in Chile. Most even smaller size businesses in Chile I know of have their accountant / bookkeeper in house that handles all their taxes, or you can easily contract one. If you are spending much more than 100,000 pesos a month on doing your Chilean taxes, you are either being ripped off or have a fairly good size and complex business that you likely do not care what they cost. My personal Chilean accountant cost me something like 30,000 pesos a month. I am not even all that sure what she does for us, as most of our taxes are handled electronically online (but it is nice to say you have an accountant).

The other thing is that for foreigners in Chile, as private individuals, you do not pay income tax for the first three years of tax residency in Chile (you can actually get a waver for longer in certain circumstances). So, there is very little in way of business for us in relation to taxes. We setup our clients with a local accountant they like, and that is pretty much the end of the work for us on the tax front. Honestly, if most of our clients pay income tax at all, it is voluntary to build up their credit scores. Even clients that are past the three year tax holiday for residency and subject to taxation on their World wide income, that is normally handled in one declaration at the end of the year.

So, there is just no money in it for us, because there is not a lot to do. Chile's tax system is one of the great joys of Chile.

On U.S. tax issues, we do not provide any services what so ever or do we provide any official advice on them (beyond my unofficial complaints about the system on the forum). Not touching that legal mess. The U.S. IRS is on which hunt right now for anyone providing even the appearance of tax shelter advice to expat American Citizens. I can not even recommend a tax advisors to American Citizens, because it opens us up to all kinds of legal liability in the United States. Our attorneys in the United States have advised us to stay way way away from the whole subject.

OK, great, thanks for the detailed response admin.

I just realized I should clarify something. There is no income tax on foreigners in Chile in the first three years on their foreign sourced income. You are still taxed on your Chilean sourced income.