Banking, credit, taxes, and other money matters

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Can you afford Chile?[edit]

http://www.allchile.net/chileforum/topic9820.html

Currency[edit]

The currency in Chile is the Chilean Peso (CLP). Prices for expensive items are often advertised in US dollars too. Exchange rates can be found easily using Google or Yahoo shortcuts, for instance : http://www.google.com/search?q=1000+clp+in+usd

Official rates and other statistical data is provided in English by the Banco Central. Live exchange rates more precise than those provided by the big web portals can be found at xe.com. A five year chart of the USDCPL exchange rate can be found here.

Large transactions such as house rentals are priced in the inflation-adjusted Unidad de Fomento (UF) (see Wikipedia, Dilacelator blog). Its value is updated and published by the Central Bank. As of September 2007, 1 U.F. was equal to roughly 37 US dollars.

A live currency converter has been added to the head and foot of the All Chile Chile Forum.

Banking[edit]

Foreigners who are settling in Chile are advised to have several foreign credit and/or debit cards as it is easy to max out payment and withdrawal daily/weekly/monthly ceilings (which you can raise by talking to your bank before you come to Chile). In remote places you may just have access to a single Mastercard or Visa ATM so it may be wise to have at least one Visa and one Mastercard card.

Gringos have found it hard to open checking accounts (aka current accounts) in Chile in the absence of a local credit record. It is easier to open a savings account with a simple Transbank Redcompra/Visa Electron debit card that you can use in ATMs and stores, as well as online (debit cards are also known as check cards in the US). The most basic cards (and thus most easy for a foreigner to get) are ATM cards that you can't use to make purchases.

As with most things in Chile, you'll want to obtain at least a RUT, and possibly a RUN before you try and open an account.

Tax in Chile[edit]

There are several taxes in Chile.

The tax system is usually linked to a person's or organisation's RUT (taxpayer number).

Almost every computer system in Chile uses the RUT both as a taxpayer identification number and a national ID number (RUN). Many companies use a person's RUT/RUN for customer tracking, purchases, and internal accounting.

Income tax[edit]

Income tax is collected from individuals and business entities.

Personal income tax varies depending on activity, income level and many other factors.

Second Category Tax[edit]

Second Category Tax applies to income from dependent employment, such as salaries, pensions (except those from a foreign source) and other remuneration. [1]

From Article 43 of Ley sobre Impuesta a la Renta (law about income tax)
Rentas mensuales a que se refiere el Nº 1 del artículo 42, a las cuales se aplicará la siguiente escala de tasas:

  • Las rentas que no excedan de 13,5 unidades tributarias mensuales, estarán exentas de este impuesto;
  • Sobre la parte que exceda de 13,5 y no sobrepase las 30 unidades tributarias mensuales, 4%;
  • Sobre la parte que exceda de 30 y no sobrepase las 50 unidades tributarias mensuales, 8%;
  • Sobre la parte que exceda de 50 y no sobrepase las 70 unidades tributarias mensuales, 13,5%;
  • Sobre la parte que exceda de 70 y no sobrepase las 90 unidades tributarias mensuales, 23%;
  • Sobre la parte que exceda de 90 y no sobrepase las 120 unidades tributarias mensuales, 30,4%;
  • Sobre la parte que exceda de 120 y no sobrepase las 150 unidades tributarias mensuales, 35,5%; y,
  • Sobre la parte que exceda de 150 unidades tributarias mensuales, 40%

"unidades tributarias mensuales" = UTM

IVA[edit]

IVA is a 19% value-added tax on the sale of most goods and services. It differs from US sales tax, which is applied only at the final sale and only to goods.

Usually prices are advertised "with IVA", but sometimes there is "letra chica" in small type that means "plus IVA".

Money-related glossary[edit]

Additional money-related words can be found at Glossary.

boleta / factura
For some purchases you may be asked: ¿boleta o factura?
For most retail sales the default receipt is the boleta. A boleta is usually adequate documentation to claim a business expense. When a business wishes to claim credit for the IVA (sales tax) on a purchase, a factura is required. A factura requires background information and takes time to prepare: name, RUT, area of business, etc. General rule: if you don't need a factura for your business, take the boleta. Usually, you are not qualified to receive a factura unless your business is registered with the SII, under the regulation called "Inicio de Actividades".
The term "boleta" for most common retail transactions is actually a short expression for the formal term: "Boleta de Compraventas y Servicios." The word boleta can have several other meanings in Spanish speaking countries. In Chile, the tax authority also specifies such concepts as "Boleta de honorarios electronica", for example. A boleta, as a minimum, is required for just about every transaction in Chile, even for 30 minutes of time in an internet-café or a mechanic repairing some minor fault.
cuenta corriente
A normal/current account which might have other products associated with it, such as cheques or credit cards.
cuenta vista
An account which has limited access; often only a debit card or internet transfers.
dividendo
Can be 1) dividend, 2) corporate earnings or 3) a mortgage interest payment.
letra chica
Usually prices are advertised "with IVA", but sometimes there is "letra chica" (small print) on a price sign which says "plus IVA".
luca
one thousand Chilean pesos
palo
one million Chilean pesos
vale vista
Equivalent of a "cashier's check" in the US and Canada, or a "sight draft" in the UK, more or less. You buy it at a bank. It is commonly used in Chile when someone can not get a chequing account.

External links[edit]