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Paying taxes for work done internationally

Posted: Thu Jan 03, 2019 2:13 pm
by cr0zzb0w
Hi..
I have been living here in Chile for the last 5 or so years, and have a stable contract job with contributions and everything else in order. Since recently, I have started to supplement my income by doing some off the hours work (I am a 3d artist).

For all the work I do within Chile, I issue boleta honararios and get paid accordingly.

My question is, how should I pay taxes for work I do for international clients. I have a gig lined up and wanna clear up how I should do this to stay on the right side of the law! :D I guess I cannot issue boletas as my clients are outside of chile and thus have no rut or any presence in chile..

I'll be eligible to apply for citizenship soon, so I wanna be legal in my finances, and also would like to have the taxes for my income properly paid so that I can someday hopefully get a credito hipotacario for a house..

pls advice!

Re: Paying taxes for work done internationally

Posted: Thu Jan 03, 2019 2:25 pm
by Jamers41
Ironically enough I am in a similar situation (permanent resident for years in Chile, eligible to apply for citizenship, have a main job locally, now have a side job earning income online outside of Chile).

Since my side job is paid in dollars and those dollars go to a US bank account (and never enter Chile one way or the other), I have been more concerned about Uncle Sam being in the loop and getting his "fair share" (if any) than the Chilean SII. I guess if I'm being too nonchalant about the local tax regime, someone here will say so.

Re: Paying taxes for work done internationally

Posted: Thu Jan 03, 2019 5:09 pm
by Space Cat
You just issue your boletas to a universal RUT for these purposes.

In "My SII":
  1. "Emitir boleta de honorarios electrónica", click "Por contribuyente" (as usual, I suppose).
  2. Select the second option "El contribuyente emisor será quien se encargue del pago provisional mensual correspondiente al 10%." because you'll be paying the 10% retention.
  3. Enter the universal RUT: 44.444.446-0 (note that it's specifically for boletas, facturas to foreign clients require another universal RUT).
  4. Enter the name and address of your client, including the country (I just use "EE.UU." for the US).
  5. Set the "Región" to "Metropolitana de Santiago" and "Comuna" to "Santiago".
  6. Enter the amount in CLP, I just use today's exchange rate even if I don't plan to convert the money from USD to CLP.
These are the instructions I got from an accountant who has experience with freelancers, and then I double-checked the RUT by calling to SII's hotline.

Re: Paying taxes for work done internationally

Posted: Thu Jan 03, 2019 6:17 pm
by cr0zzb0w
Space Cat wrote:
Thu Jan 03, 2019 5:09 pm
You just issue your boletas to a universal RUT for these purposes.

In "My SII":
  1. "Emitir boleta de honorarios electrónica", click "Por contribuyente" (as usual, I suppose).
  2. Select the second option "El contribuyente emisor será quien se encargue del pago provisional mensual correspondiente al 10%." because you'll be paying the 10% retention.
  3. Enter the universal RUT: 44.444.446-0 (note that it's specifically for boletas, facturas to foreign clients require another universal RUT).
  4. Enter the name and address of your client, including the country (I just use "EE.UU." for the US).
  5. Set the "Región" to "Metropolitana de Santiago" and "Comuna" to "Santiago".
  6. Enter the amount in CLP, I just use today's exchange rate even if I don't plan to convert the money from USD to CLP.
These are the instructions I got from an accountant who has experience with freelancers, and then I double-checked the RUT by calling to SII's hotline.
Done!!! thanks man! thats all i wanted :D

Re: Paying taxes for work done internationally

Posted: Thu Jan 03, 2019 10:05 pm
by at46
Jamers41 wrote:
Thu Jan 03, 2019 2:25 pm
Ironically enough I am in a similar situation (permanent resident for years in Chile, eligible to apply for citizenship, have a main job locally, now have a side job earning income online outside of Chile).

Since my side job is paid in dollars and those dollars go to a US bank account (and never enter Chile one way or the other), I have been more concerned about Uncle Sam being in the loop and getting his "fair share" (if any) than the Chilean SII. I guess if I'm being too nonchalant about the local tax regime, someone here will say so.
I'm pretty sure SII, IRS and the Canadian counterpart can search each other's databases but probably do that only for some red flags. If you do apply for citizenship, that might raise one of those red flags.

Re: Paying taxes for work done internationally

Posted: Mon Aug 26, 2019 6:03 pm
by questions
Space Cat,
I would like more information on paying taxes for work done internationally.
Any recommendations for accountants with experience with freelancers that work internationally?
Thank you.

Re: Paying taxes for work done internationally

Posted: Mon Aug 26, 2019 10:25 pm
by Space Cat
I think you are a bot or a lazy spammer. But you don't need an accountant to work as an individual: issue your boletas in the end of each month according to my instructions above, submit the form F29 ("Impuestos Mensuales" in Mi SII), pay 10% retention (the same section) and you are done.

Re: Paying taxes for work done internationally

Posted: Tue Aug 27, 2019 1:00 pm
by questions
I am not a bot and definitely not a lazy spammer.
In any case, thank you for the info.

Re: Paying taxes for work done internationally

Posted: Sun Feb 23, 2020 2:43 pm
by tiagoabner
Space Cat wrote:
Thu Jan 03, 2019 5:09 pm
You just issue your boletas to a universal RUT for these purposes.

In "My SII":
  1. "Emitir boleta de honorarios electrónica", click "Por contribuyente" (as usual, I suppose).
  2. Select the second option "El contribuyente emisor será quien se encargue del pago provisional mensual correspondiente al 10%." because you'll be paying the 10% retention.
  3. Enter the universal RUT: 44.444.446-0 (note that it's specifically for boletas, facturas to foreign clients require another universal RUT).
  4. Enter the name and address of your client, including the country (I just use "EE.UU." for the US).
  5. Set the "Región" to "Metropolitana de Santiago" and "Comuna" to "Santiago".
  6. Enter the amount in CLP, I just use today's exchange rate even if I don't plan to convert the money from USD to CLP.
These are the instructions I got from an accountant who has experience with freelancers, and then I double-checked the RUT by calling to SII's hotline.
Reviving this topic due to it's relevance to my current situation.

@Space Cat: how did it work regarding IVA/VAT? Were you able to get an exemption due to you exporting services to clients abroad, or did you need to charge and pay IVA/VAT on your invoices?

Re: Paying taxes for work done internationally

Posted: Mon Feb 24, 2020 6:21 pm
by admin
questions wrote:
Tue Aug 27, 2019 1:00 pm
I am not a bot and definitely not a lazy spammer.
In any case, thank you for the info.
sorry, about that. Think it was well meaning attempt by a long-term forum member to draw attention to the possibility you were a spammer so I could check you out.

Your post was a bit generic, and for a new poster that almost 99.9999% of the time means spammer or bot. anyone under 10 posts get's watched carefully around here.

best to post an intro thread to tell us about who you are a bit, to help avoid that problem.

Re: Paying taxes for work done internationally

Posted: Mon Feb 24, 2020 6:28 pm
by admin
tiagoabner wrote:
Sun Feb 23, 2020 2:43 pm
Space Cat wrote:
Thu Jan 03, 2019 5:09 pm
You just issue your boletas to a universal RUT for these purposes.

In "My SII":
  1. "Emitir boleta de honorarios electrónica", click "Por contribuyente" (as usual, I suppose).
  2. Select the second option "El contribuyente emisor será quien se encargue del pago provisional mensual correspondiente al 10%." because you'll be paying the 10% retention.
  3. Enter the universal RUT: 44.444.446-0 (note that it's specifically for boletas, facturas to foreign clients require another universal RUT).
  4. Enter the name and address of your client, including the country (I just use "EE.UU." for the US).
  5. Set the "Región" to "Metropolitana de Santiago" and "Comuna" to "Santiago".
  6. Enter the amount in CLP, I just use today's exchange rate even if I don't plan to convert the money from USD to CLP.
These are the instructions I got from an accountant who has experience with freelancers, and then I double-checked the RUT by calling to SII's hotline.
Reviving this topic due to it's relevance to my current situation.

@Space Cat: how did it work regarding IVA/VAT? Were you able to get an exemption due to you exporting services to clients abroad, or did you need to charge and pay IVA/VAT on your invoices?
you have to incorporate if you are doing anything related to IVA.

services are not taxed with IVA

now, there is a big of grey zone here, and we run in to it with various clients in the IT industry and similar.

Here is an example.

If you are providing services to a company, say programming a piece of code on software they own, that would be an exported service. No iva

however, if you say programmed your own video game, and sold that over seas, that would be exporting a product. IVA applies.

Now, in practice, the SII does not generally slice the bread that thin, but they are fully able to if they wanted.

Re: Paying taxes for work done internationally

Posted: Mon Feb 24, 2020 6:47 pm
by tiagoabner
admin wrote:
Mon Feb 24, 2020 6:28 pm
tiagoabner wrote:
Sun Feb 23, 2020 2:43 pm
Space Cat wrote:
Thu Jan 03, 2019 5:09 pm
You just issue your boletas to a universal RUT for these purposes.

In "My SII":
  1. "Emitir boleta de honorarios electrónica", click "Por contribuyente" (as usual, I suppose).
  2. Select the second option "El contribuyente emisor será quien se encargue del pago provisional mensual correspondiente al 10%." because you'll be paying the 10% retention.
  3. Enter the universal RUT: 44.444.446-0 (note that it's specifically for boletas, facturas to foreign clients require another universal RUT).
  4. Enter the name and address of your client, including the country (I just use "EE.UU." for the US).
  5. Set the "Región" to "Metropolitana de Santiago" and "Comuna" to "Santiago".
  6. Enter the amount in CLP, I just use today's exchange rate even if I don't plan to convert the money from USD to CLP.
These are the instructions I got from an accountant who has experience with freelancers, and then I double-checked the RUT by calling to SII's hotline.
Reviving this topic due to it's relevance to my current situation.

@Space Cat: how did it work regarding IVA/VAT? Were you able to get an exemption due to you exporting services to clients abroad, or did you need to charge and pay IVA/VAT on your invoices?
you have to incorporate if you are doing anything related to IVA.

services are not taxed with IVA

now, there is a big of grey zone here, and we run in to it with various clients in the IT industry and similar.

Here is an example.

If you are providing services to a company, say programming a piece of code on software they own, that would be an exported service. No iva

however, if you say programmed your own video game, and sold that over seas, that would be exporting a product. IVA applies.

Now, in practice, the SII does not generally slice the bread that thin, but they are fully able to if they wanted.
I'm sorry, Admin, but I think I may be missing your point here regarding incorporating. Do you mean that services sold to abroad would only be able to get the Iva exemption if I'm incorporated as a company (as opposed to an independent worker)?

I'm looking to keep things simple and compliant with Chilean tax law, and my understanding is that it's possible to export services as an independent. Also, do your company provide consultancy on these topics? I'm a bit concerned that the guys I'm going to see tomorrow may be little more than tax-fillers, and I would rather get some real professional answers if possible. Let me know if that's the case and I'll email you.