Income Tax on Foreign Income

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Britkid
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Re: Income Tax on Foreign Income

Post by Britkid » Thu Sep 25, 2014 7:06 pm

eeuunikkeiexpat wrote:Britkid, thanks for posting your experiences especially the info about going directly to form 50 as I will legally need to start declaring next year.

To everyone reading, any tips on how such a form or the tax forms in general should be filled out by someone living from an ATM machine would be greatly appreciated.
What are your thoughts on the below?

However an individual taking up domicile or residency in Chile is taxed only on Chilean source income for the first 3 years, on application this may be extended. Source: http://www.sii.cl/aprenda_sobre_impuest ... ingles.htm (my bolding, not theirs)

Has anyone ever looked into this? How does one go about getting an extension? Should I take some photos of myself doing charity work and saving people from falling buildings in the next earthquake to prove what a great citizen I am? Is there someone in the tax office I need to sleep with, or blackmail?

But seriously, has anyone ever made such an application?
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paladin
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Re: Income Tax on Foreign Income

Post by paladin » Fri Sep 26, 2014 6:32 pm

admin wrote:i got this.

He is not employed by a chilena company, nor does he provide goods or services to chileans. He is not "working" in Chile in the full official sense of working. many, many, many many, members of this forum (if they work at all) do not work in Chile in the same way. Chile does not care.
OK admin, now it's clear; thanks. What I didnt know when reading Britkid post was that he's working on line and doesnt provide services inside Chile.

Britkid
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Re: Income Tax on Foreign Income

Post by Britkid » Sun Dec 28, 2014 2:16 pm

Yeah likewise I have posted once or twice about what happens after 3 years of tax free but no-one replies. It says on an official form you can apply for an extension. But that's all it says. There must be people on this forum who know more about that..how likely is it to get an extension, anyone know how you go about getting it or what factors are taken into account. I'd like to hear from someone who applied for an extension of that tax free period for foreign sourced income. That would be really helpful and greatly appreciated if anyone can share their experiences.
In 2014/2015 I blogged about my life in Chile. http://web.archive.org/web/201601121940 ... age_id=268

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Space Cat
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Re: Income Tax on Foreign Income

Post by Space Cat » Sun Dec 28, 2014 7:49 pm

admin wrote:He is not employed by a chilena company, nor does he provide goods or services to chileans. He is not "working" in Chile in the full official sense of working. many, many, many many, members of this forum (if they work at all) do not work in Chile in the same way. Chile does not care.
Freelancing is very hard to grasp for governments even in EU countries. They just don't understand how to manage it properly.

But it could change with the first signs of upcoming crisis. Thailand fixed this kind of tax leak one year ago by forcing tens of thousands of freelancing downshifters to register themselves as companies or leave.

paladin
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Re: Income Tax on Foreign Income

Post by paladin » Thu Jan 08, 2015 3:43 pm

I dont know of anyone who has applied for an extension, but knowing how these people think, I imagine each case will be treated on its merits, eg, why do you think you should get an extension? Is that income likely to cease soon or do you plan to leave the country etc.
In my case, I did what is usually the rule here, ie dont wake the cat up, as the chances of your being asked the question are very slim, and the bloke at SII isnt going to chase after income that isnt going to bring in any tax income and hence no bonus for him. You dont need to fill in any form 50.
I do know aChilean tax lawyer if you want, assuming that admin has no problem as I dont want to step on someone's toes here.

Britkid
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Re: Income Tax on Foreign Income

Post by Britkid » Fri Jan 09, 2015 11:12 am

I don't have to declare my foreign income on any form, and that form 22 was not mentioned. In my case, they were fine with me not being in the system at all or filling in any forms, which is what I currently plan to do. I wonder if what was mentioned to you is for the case of someone with both Chilean AND foreign income that might be required to fill in forms and declare all income, but that for someone with purely foreign nothing is required. That could easily be wrong though, just speculation.

Form 50 for me would be purely voluntarily if I see benefits (credit, mortgage etc) to being in the system. I have to say though I took one look at the form and it looked quite complicated and I set it aside. I have this vague, crazy idea to pay some nominal amount into the system (say 50,000 Pesos) and then at the end of the tax year claim it back, and assuming I do get it back without a massive hassle, the next year declare a larger amount and claim it back again, in order to be registered in the tax system as having paid tax here locally for several years to help me apply for a mortgage. However this idea took a step back when I took a glance at form 50 and thought "that looks a hassle" and a further step back when I got the impression from talking to a couple of banks that current salary and employment situation, rather than past history, would be more important in determining eligibility for a mortgage. There is also the matter that I am no hurry to buy a house in Chile, either. With the prices of 5-10 years ago, I could hardly believe they were so low, I would have been racing to get in the game had I been living here at that time, but I wasn't. So all of this idea is on the back burner. Next step, maybe some time this year would be to ask a couple more banks about mortgage requirements.

As to extension of 3 years tax free for foreign sourced income, I do have the plan to simply go to SII myself and pose the question I've asked here at some stage about extending it - maybe this month or at least this year. I can perhaps report back. If that doesn't work, I may seek a professional opinion, e.g. from the proprieters of this forum!

As to people not commenting, I just wonder how many people are out there letting the clock tick over 3 years and not doing anything or planning to do so. This would presumably amount to illegal tax evasion but could explain why some people are not in a huge hurry to comment about their situation. Probably that's unfair actually but I can't help wondering a teeny bit.
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admin
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Re: Income Tax on Foreign Income

Post by admin » Fri Jan 09, 2015 12:01 pm

well, it likely comes down to simply commenting on your tax situation on a public forum, is just asking for trouble (prosecutor: "sir, is it true that you are a member of allchile.net and made this post in 2015 stating ..."). Giving others tax advice is also asking for trouble.

We can't for instance provide advice about U.S. tax or law, because it is directly prohibited in the Chile - U.S. free trade agreement, among other things. It also causes more confusion than it helps.

You need tax advise, hire someone. The way you even framed your question, for instance, indicates you are not understanding neither the Chilean tax situation nor the mortgage situation in Chile. Let's cap that off with a whole new tax reform being implemented, so even if you got it here, it would likely be wrong. The professionals are still parsing what that reform means. Hell, the IRS in Chile is still parsing what that means.

I will tell you this. Your ability to get a mortgage is directly related to how much tax you declare. They can not give you a mortgage in Chile, for mythical foreign, undeclared (i.e. illegal) income. 50,000 pesos a month token declarations are not going to do it by any stretch, with any bank in Chile.
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eeuunikkeiexpat
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Re: Income Tax on Foreign Income

Post by eeuunikkeiexpat » Fri Jan 09, 2015 12:09 pm

That I assume was directed at Britkid.

OK, let me rephrase.

Hypothetical situation: an officially resident expat living from ATM machines has come to the end of their three year Chile tax holiday.

Where on the Chile tax forms would that hypothetical person declare their foreign income? Specifics would be highly appreciated: form number(s), line number(s), other useful info.

Doesn't seem complicated or sensitive to me. You can PM me and I am willing to forward a prize for an answer that turns out to be correct.
Generally, just a SPAM KILLER. You are on your own in this forum. My personal mission here is done.

BUT when necessary, by way of ridicule and truth revelation we shalt do war.

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jehturner
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Re: Income Tax on Foreign Income

Post by jehturner » Fri Jan 09, 2015 9:16 pm

Looks like I'll have the joy of figuring these forms out for the first time too, now that I have local rental income (even though it just covers our rent, as if we were living there...).

paladin
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Re: Income Tax on Foreign Income

Post by paladin » Sat Jan 10, 2015 3:29 pm

In your theoretical case, you only need to declare foreign income once your 3 years are up

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eeuunikkeiexpat
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Re: Income Tax on Foreign Income

Post by eeuunikkeiexpat » Sat Jan 10, 2015 3:49 pm

:roll:
eeuunikkeiexpat wrote:... has come to the end of their three year Chile tax holiday.
No shit! :) 2015 is the first year I would need to declare.

You wouldn't have answers to the rest of my question would you? PM me if you don't want to post.
Generally, just a SPAM KILLER. You are on your own in this forum. My personal mission here is done.

BUT when necessary, by way of ridicule and truth revelation we shalt do war.

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Donnybrook
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Re: Income Tax on Foreign Income

Post by Donnybrook » Sat Jan 10, 2015 7:35 pm

Is there any reason you don't want to go to a SII office to get them to explain it to you? I have usually found them to be more than willing to help.

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