Chile Forum

Dear all, I am re-posting the link to the "dl824.doc" file I posted in the other topic.

Its a very good and interesting reading. Please enjoy it.

LEY SOBRE IMPUESTO A LA RENTA (Publicado en el Diario Oficial de 31 de diciembre de 1974 y actualizado al 12 de febrero de 2011)

http://www.sii.cl/pagina/jurisprudencia ... /dl824.doc

dfjordan wrote:sputnic 1; I think you´re getting yourself tied up in knots. If you say you are a numbers guy then in various of the previous replies you will find exactly the info you need. For example in gato reply of Mar 8, he gives you the tax brackets and the % applied to each. If you are worried about the top rate of 40%, it will only be applied to that part of your monthly salary over (approx) 5.6million pesos.

ok. I did read the information and that's what bothered me. However, I didn't understand that until you reach a certain level, only that portion above the 5.6 million pesos was taxed at the higher rate (if that's what your saying). Reading the next post from Charles actually clarifies a lot and creating legitimate reasons for purchasing things for the business that can also be used for personal use makes me feel better (not to say I will be taxed at that level but one can dream)

I guess what I wanted to know is if there are loop holes for taxes.

My head hurts. I will hire an accountant.

sputnic; as far as tax loopholes go, there are very few compared witrh other countries. You can try and get away with charging personal items to your business and will get away with it until you are chosen to be audited. At that time, these people are about as bad as the gestapo; and will do everything they can to make sure you end up with showing as having underpaid. Remember that SII employees involved in reviewing tax returns, earn bonuses based on their collections of "underpaid" tax.

dfjordan wrote:sputnic; as far as tax loopholes go, there are very few compared witrh other countries. You can try and get away with charging personal items to your business and will get away with it until you are chosen to be audited. At that time, these people are about as bad as the gestapo; and will do everything they can to make sure you end up with showing as having underpaid. Remember that SII employees involved in reviewing tax returns, earn bonuses based on their collections of "underpaid" tax.

First of all, I love loop holes and ways to legally hide income. I am not, however, in the practice of doing things illegally. The last thing I want to do is get screwed by the SII.

I don't see the tax advantages to Chile vs. the US. In fact, Business tax in the US is 37 or 39% (I think that's the new figure), personal taxes are lower in the US than Chile. The two somewhat even each other out. Remember, I have to make more money than most because of the size of my family (5 children 13,11,8,6,4). Hell, I have $30,000 USD/year in private school to pay for, a house and business lease (granted I dont' have to worry about taxes on the business building lease, utilities, etc. but it's still more money I have to pay then most), utilities for two buildings, etc. I have to be in the upper tax bracket by default.

sputnic1 wrote:. . . . I don't see the tax advantages to Chile vs. the US. . . .

And few, if any, Americans move to Chile to save money on taxes.

RWS wrote:

sputnic1 wrote:. . . . I don't see the tax advantages to Chile vs. the US. . . .

And few, if any, Americans move to Chile to save money on taxes.

I'm not either. However, I didn't realize they were as high as they are. This is a bit surprising, especially considering the high cost of living for large families and now the high taxes beginning at such a low starting point. If I were a family of 4 this figure wouldn't bother me so much. But with large families, you have to make a lot more just to be at the same level financially as someone with one or two kids. I never considered larger families a negative thing here in the US but in Chile and many other countries it is. Oh well, I have to now go back to the punching out the numbers to make sure it is economically viable for me to move there. I'm ready to move finally and now that I can, I have to wait longer. But, better to be careful and make the right decision vs. being hasty and making as potentially bad one. Thanks for the replies.

not sure what your definition of high is? the percentage on the table shown is not the effective tax rate. You need to discount the value in column five:
http://www.sii.cl/aprenda_sobre_impuest ... s.htm#o2p3
However, you also need to consider health care and pension obligations.

Gato and others, please correct me if wrong.

In short, as mentioned by others - contact an expert. If you expect to be in the high tax bracket, then you should be able to afford it.