Chile: second run

All things related to Moving to Chile, tips, tricks, FAQS. Here is where to exchange information between those that have already moved and those planning to move to Chile so you do not need to learn the hard way. Please also check Living in Chile forum for related information.
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tiagoabner
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Re: Chile: second run

Post by tiagoabner » Sun Jun 02, 2019 11:16 am

A few weeks have gone by and we've mostly settled ourselves. We signed up for Cruz Blanca (90% outpatient coverage with a high 'tope', 100% inpatient 'sin tope', 80% dental coverage) for $190.000. I could've saved a bit, but I really like Cruz Blanca's user interface and I would rather pay an extra 20% to avoid using a shitty interface.

We've rented the same apartment we lived at previously and we'll be living there for at least a year. We may buy an apartment in Santiago and a house in the lakes region, but we're in no kind of hurry. We're going to explore the areas we're interested in to know them better.

If there's anyone reading this, I would appreciate your follow up on the below:

1. How does one go about finding a good accountant in Chile? Is there an equivalent of 'state CPA association' or similar? PM me if you have a referral. Admin: check your email if you're reading this, there shouldn't be that many Tiagos emailing you.

2. My understanding is that the tax holiday finishes at the end of the third year after moving to Chile with the intent of being a resident. What's not clear for me is: when does that start to count from? When I got out of the plane? Or when I got my first residência temporaria stamped on my passport?

3. In the same note: I'll be starting activities as a self-employed person by September-ish, which is 100% still within my tax holiday (it ends on December, if the worst possible interpretation of 'residency' is the one used). From what I read at SII, I'm to report my income and pay my taxes normally for this period, and I'll then get them back on next year's tax return. Is that correct? Am I missing something? All of my income comes as dividends from my company abroad, if that's relevant.

4. Is there anything I should be looking at other that fees when choosing an AFP? Modelo seems to be the cheapest one, so I'm planning on going with them, assuming there are no other major factors to be considered.

Thanks in advance for your feedback and opinions.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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Space Cat
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Re: Chile: second run

Post by Space Cat » Sun Jun 02, 2019 4:01 pm

3. You issue boletas to a foreign client (see my reply here), then also declare F29 monthly and pay the retention amount. It all can be done online and paid with CuentaRUT.

In the end of the tax year (April), after declaring F22 you'll get some money back for now if you select the reduced contribution. But gradually, self-employed will start paying 17% retention monthly and 100% of AFP, health, and insurance contributions will be retained by SII.

grfico.jpg

4. By law, you have to start with Modelo because it's the cheapest one (you can change it later). I think I'll stay with it because A and B fund performance is not much worse than in Habitat (the top performer) but the fee is almost 2 times lower.

scandinavian
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Re: Chile: second run

Post by scandinavian » Sun Jun 02, 2019 4:40 pm

4) as a foreigner you can opt out of AFP, as long as you save into a similar program outside Chile (and can prove it).

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tiagoabner
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Re: Chile: second run

Post by tiagoabner » Sun Jun 02, 2019 5:45 pm

Space Cat wrote:
Sun Jun 02, 2019 4:01 pm
3. You issue boletas to a foreign client (see my reply here), then also declare F29 monthly and pay the retention amount. It all can be done online and paid with CuentaRUT.

In the end of the tax year (April), after declaring F22 you'll get some money back for now if you select the reduced contribution. But gradually, self-employed will start paying 17% retention monthly and 100% of AFP, health, and insurance contributions will be retained by SII.


grfico.jpg


4. By law, you have to start with Modelo because it's the cheapest one (you can change it later). I think I'll stay with it because A and B fund performance is not much worse than in Habitat (the top performer) but the fee is almost 2 times lower.
On 3: I got that part. My question is mainly about the taxes I'll pay for the period between September and November, when I'm still going to be during my tax holiday. I assume that I'll pay and receive it back later on, but I don't know anyone who have done that. Hence, I'm asking about it here.

On 4: got it, there's a fee and a performance rating. I'll run the numbers on these. For how long do I have to stay with Modelo before switching?
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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tiagoabner
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Re: Chile: second run

Post by tiagoabner » Sun Jun 02, 2019 5:49 pm

scandinavian wrote:
Sun Jun 02, 2019 4:40 pm
4) as a foreigner you can opt out of AFP, as long as you save into a similar program outside Chile (and can prove it).
Thanks, but I would rather be in Chile's system. Portugal's system would have me at a 16% rate of gross income (with no contribution cap), so nooooope.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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Space Cat
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Re: Chile: second run

Post by Space Cat » Sun Jun 02, 2019 5:54 pm

Getting any info about the tax holiday is extremely tricky because almost nobody uses it (remotely working foreigners aren't numerous). But it feels like SII doesn't care that much if you're starting to contribute a few months later. I remember SII site asking me for how long I've been living in Chile before even allowing me to issue boletas. Maybe this could be considered an official response.

Probably you can change AFP instantly, I've never seen any time limits:
https://www.spensiones.cl/portal/instit ... 10156.html

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tiagoabner
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Re: Chile: second run

Post by tiagoabner » Sun Jun 02, 2019 6:02 pm

Space Cat wrote:
Sun Jun 02, 2019 5:54 pm
Getting any info about the tax holiday is extremely tricky because almost nobody uses it (remotely working foreigners aren't numerous). But it feels like SII doesn't care that much if you're starting to contribute a few months later. I remember SII site asking me for how long I've been living in Chile before even allowing me to issue boletas. Maybe this could be considered an official response.

Probably you can change AFP instantly, I've never seen any time limits:
https://www.spensiones.cl/portal/instit ... 10156.html
Got it. I guess we'll find out, I'll pay SII a visit once I get my new carnet to try to sort this out. But my expectations are really (REALLY) low. I'll see if I can find an accountant who's experienced in expats, but I think those are as rare as they come. My guess is that remote workers are simply staying under the radar and/or under-reporting, as working remotely isn't anywhere close to uncommon in 2019.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

Britkid
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Re: Chile: second run

Post by Britkid » Sun Jun 02, 2019 7:19 pm

“el extranjero que constituya domicilio o residencia en el país, durante los tres primeros años contados desde su ingreso a Chile solo estará afecto a los impuestos que graven las rentas obtenidas de fuente chilena."
Source: http://www.sii.cl/normativa_legislacion ... ja2123.htm

The three year tax holiday starts from when you enter Chile, according to the above, and I also received the same wording in a letter from SII a couple of years ago.

They also sent me this in a letter where they ruled that the day I first I entered Chile was the day the 3 years started ticking. : "constituyó domicilio desde su ingreso y lo prueba con antecendentes como haberse mudado a Chile con toda su familia, que arrendó o compró su casa habitacion en Chile, que sus hijos estudian el en colegios del pais, y que ademas se vino a Chile en razon de un contrato de trabajo, tales circumstancias podrian ser indicativas que el extranjero constituyó domicilio desde el primer dia de su ingreso el pais" They ruled that the tax holiday started the day I arrived because I started working straight away, starting renting a house more or less straight away, and arrived with family. So this would seem to arguably imply that had I arrived and then spent the first few months travellng around Chile without living in a stable address, for instance, that in such a case that might not have counted. However they counted the date of my arrival as the start of the tax holiday, even though I actually started working and renting a place 2 weeks later.

There is some further discussion here - viewtopic.php?t=14174

Britkid
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Re: Chile: second run

Post by Britkid » Sun Jun 02, 2019 7:22 pm

You can also apply for an extension to the three year tax holiday on foreign sourced income if you want to. See this thread pages 7,10,11:
viewtopic.php?f=23&t=9214&start=72
This may or may be granted, it will depend on your case.

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tiagoabner
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Re: Chile: second run

Post by tiagoabner » Sun Jun 02, 2019 9:04 pm

Britkid wrote:
Sun Jun 02, 2019 7:19 pm
“el extranjero que constituya domicilio o residencia en el país, durante los tres primeros años contados desde su ingreso a Chile solo estará afecto a los impuestos que graven las rentas obtenidas de fuente chilena."
Source: http://www.sii.cl/normativa_legislacion ... ja2123.htm

The three year tax holiday starts from when you enter Chile, according to the above, and I also received the same wording in a letter from SII a couple of years ago.

They also sent me this in a letter where they ruled that the day I first I entered Chile was the day the 3 years started ticking. : "constituyó domicilio desde su ingreso y lo prueba con antecendentes como haberse mudado a Chile con toda su familia, que arrendó o compró su casa habitacion en Chile, que sus hijos estudian el en colegios del pais, y que ademas se vino a Chile en razon de un contrato de trabajo, tales circumstancias podrian ser indicativas que el extranjero constituyó domicilio desde el primer dia de su ingreso el pais" They ruled that the tax holiday started the day I arrived because I started working straight away, starting renting a house more or less straight away, and arrived with family. So this would seem to arguably imply that had I arrived and then spent the first few months travellng around Chile without living in a stable address, for instance, that in such a case that might not have counted. However they counted the date of my arrival as the start of the tax holiday, even though I actually started working and renting a place 2 weeks later.

There is some further discussion here - viewtopic.php?t=14174
I completely overlooked that filing for an extension is an option. That may work out for me, as I spent way over a year out of the country. My main question is about "opening my activity" and filing my taxes while on the holiday. Is this something that's an option? I've an accountant I'll try to see this week to get answers to these questions, but anedoctal references will be useful so I can have some idea about main points I may be overlooking.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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41southchile
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Re: Chile: second run

Post by 41southchile » Mon Jun 03, 2019 9:16 am

tiagoabner wrote:
Sun Jun 02, 2019 5:49 pm
scandinavian wrote:
Sun Jun 02, 2019 4:40 pm
4) as a foreigner you can opt out of AFP, as long as you save into a similar program outside Chile (and can prove it).
Thanks, but I would rather be in Chile's system. Portugal's system would have me at a 16% rate of gross income (with no contribution cap), so nooooope.
Oh dont worry about that, it will be that much within a few years here too, its already going up to 14. 10 percent is too low.
Comuna Loncotoro Lakes Region Chile

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tiagoabner
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Re: Chile: second run

Post by tiagoabner » Mon Jun 03, 2019 9:25 am

While the rate is increasing, in my understanding, here in Chile there's a limit to the "Renta imponible" of about 2500€ per month. That limit doesn't exist in Portugal. Since my income is higher that that - even when accounting for "gastos presuntos" - te Chilean system is the cheaper option for me.

Trust me, I really did run my numbers on this. :-)
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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