Income Tax on Foreign Income

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Britkid
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Re: Income Tax on Foreign Income

Post by Britkid » Mon Sep 05, 2016 10:01 am

“Foreigners will pay taxes only on their Chilean source income during the first three years since their arrival to Chile. After this period has elapsed, foreigners will be subject to income taxes on their worldwide income. Chilean legislation establishes that this period might be extended in qualified circumstances, but in practice, this extension is unusual.” https://home.kpmg.com/xx/en/home/insigh ... e-tax.html

“It is possible that the tax authorities will extend the initial three-year term for another three years, after which you will be taxed on your worldwide income.” https://www.internations.org/santiago-d ... santiago-2

“Foreigners who are tax resident are taxed on Chilean-source income only during their first 3 years of residence in Chile, although a 3 year extension is permitted as long as the request is filed before the expiration of the 3 years. Thereafter they are subject to tax on a worldwide basis. In order to obtain an extension, strong supporting documentation must be provided that clearly establishes that the individual does not have the intention to permanently remain in Chile.” https://www.aesinternational.com/intern ... rops-chile

“Foreigners are taxed on Chilean-source income only during their first 3 years in Chile (although a 3-year extension is permitted). Thereafter, they are subject to taxation on a worldwide basis.” “During the first three years of residence in the country, foreigners who establish domicile or residence in Chile pay income taxes only on their Chilean-source income. This term may be extended by the tax authorities for an additional three years after which they are taxed on their worldwide income.” https://onlinetaxman.com/countryguide/?country=CL

"Non-residents and foreigners who have lived in Chile for less than 3 years pay Chilean tax only on income received from Chilean sources. This is a tax benefit of being an expat in Chile, and it is why you may want to request an extension of this tax treatment for the 2nd three years of your Chilean residency. After the 3 year period (of after 6 years if you request the extension) you will be taxed on your worldwide income, just as Chilean residents are taxed."
http://www.greenbacktaxservices.com/blo ... -in-chile/

“During the first three years of residence in the country, foreigners who establish domicile
or residence in Chile pay income taxes only on their Chilean-source income. This term
may be extended by the tax authorities for an additional three years after which they are
taxed on their worldwide income.”
According to the “Chile PDF tax guide” I downloaded from http://www.pkf.com/media/10025974/chile ... 015-16.pdf

Britkid
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Re: Income Tax on Foreign Income

Post by Britkid » Tue Dec 13, 2016 11:35 am

Around the start of October I received a letter saying I have to take proof of ‘’fecha de ingreso a Chile’’ and ‘’origin de las rentas (contrato de trabajo)."

I took this and then more recently in November I was asked to provide a list of "bienes adquirido" (for which the only one that I could think of was a car) and my rental contract, and marriage certificate. When I showed them the rental contract they asked to see an inventory. When I showed them that I owned a car they asked to see the padron.

There is a tendency to make me go in person to Santiago and then decide when I get there or later to request other documents they could have thought of in the first place. (This seems to be common practice in buerecracy. I remember the same when I got married in Spain.) However, apart from that, I think they have provided a good and friendly service.

They need to see original documents in person but they then photocopy them and don't keep them. I got someone's email so I can get faster updates since letters take weeks to arrive, or never do, and the online system never seems to work for me. However they wouldn't accept documentation by email, but it is a still a useful pre-check if you are on the right lines, to save a wasted trip, if you are travelling from outside Santiago.

Having a rent contract rather than ownership, and working as a contractor for an international company may work in my favour since the idea is to show that I am not so established here.

However being married (and to a Chilean) does not work in my favour, neither does the inventory because it shows we rented an unfurnished house, which means they know we have our own cupboards, beds etc, which makes us more established, so I think if I get asked to pay taxes, these two reasons could be why.

I've now been going to the Juridico section on the second, main entrance, go up stairs, I think third, top floor, turn right at top of stairs and no formal reception there so have to approach someone at a desk. Same place I mentioned before SII at Romero 3226.

There is parking in the area, but it is very busy. I got lucky yesterday and got a space right outside.

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Re: Income Tax on Foreign Income

Post by admin » Wed Dec 14, 2016 7:37 am

Britkid wrote:Around the start of October I received a letter saying I have to take proof of ‘’fecha de ingreso a Chile’’ and ‘’origin de las rentas (contrato de trabajo)."

I took this and then more recently in November I was asked to provide a list of "bienes adquirido" (for which the only one that I could think of was a car) and my rental contract, and marriage certificate. When I showed them the rental contract they asked to see an inventory. When I showed them that I owned a car they asked to see the padron.

There is a tendency to make me go in person to Santiago and then decide when I get there or later to request other documents they could have thought of in the first place. (This seems to be common practice in buerecracy. I remember the same when I got married in Spain.) However, apart from that, I think they have provided a good and friendly service.

They need to see original documents in person but they then photocopy them and don't keep them. I got someone's email so I can get faster updates since letters take weeks to arrive, or never do, and the online system never seems to work for me. However they wouldn't accept documentation by email, but it is a still a useful pre-check if you are on the right lines, to save a wasted trip, if you are travelling from outside Santiago.

Having a rent contract rather than ownership, and working as a contractor for an international company may work in my favour since the idea is to show that I am not so established here.

However being married (and to a Chilean) does not work in my favour, neither does the inventory because it shows we rented an unfurnished house, which means they know we have our own cupboards, beds etc, which makes us more established, so I think if I get asked to pay taxes, these two reasons could be why.

I've now been going to the Juridico section on the second, main entrance, go up stairs, I think third, top floor, turn right at top of stairs and no formal reception there so have to approach someone at a desk. Same place I mentioned before SII at Romero 3226.

There is parking in the area, but it is very busy. I got lucky yesterday and got a space right outside.
Sorry, I think there might be some details missing. So you got audited by SII? Was there any specific reason given (e.g. you bought a property or something)?
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Britkid
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Re: Income Tax on Foreign Income

Post by Britkid » Thu Mar 16, 2017 2:41 pm

Time for an update. First of all, sorry to admin I missed your question in December. I see it now. I was not being audited, but applying for an extension to the period of not paying taxes on foreign income, as explained earlier in the thread. You only need to read pages 10 and 11 to see my case if anyone's interested.

I was just approved for a 3-year extension of not paying taxes on foreign souced income, that will take things to 6 years in total (which should be the maximum allowed), covering until January 2020 since I arrived in Chile in January 2014. Reasons for giving me the approval were stated as follows: "no hay constancia qe el interesado tenga vinculos de consanguineidad con personas Chilenas; ademas, no existen antecedentes que permiten presumir el establacimiento definitivo en el territerio nacional y por ultimo, que ha tenido una actitud colaboradora".

Although actually the letter does not state the period of the extension, I had to follow up to clarify that it was 3 years. Since it had no date, I spent a day mulling over whetheror not to never contact the SII again and just use that letter to not pay taxes ever again for however long I'm here. However, I eventually figured that a vaguely worded letter from 2017 probably wouldn't be considered a get out of jail card 20 years from now. Go to be honest though, seriously considered it for a whole day. Now they mention it, I have heard that the extension is 3 years in a few places before, and it's even quoted as such in some of the quotes I pasted at the top of the page.

Related thread: http://www.allchile.net/chileforum/view ... hp?t=14174 covering the question of how the start point of the first three years is defined.

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Re: Income Tax on Foreign Income

Post by Space Cat » Mon Jan 29, 2018 4:02 pm

I just went to a SII office with a printed Articulo 3º and was denied the extension – SII worker was reading something in his computer for three minutes (probably, comments to this article) and then stated that it's allowed only in the case I was out of Chile for 6 months or more.

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