Personal Income Tax Rates

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Ramana66
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Personal Income Tax Rates

Post by Ramana66 » Wed Mar 28, 2018 7:25 pm

Hi Forum,
Just a quick question, if any one can give me some guidance on currebt personal income tax rates and an example tax calculation sheet. The annual income amount for the example can be anything as long as it covers all tax bands including highest band.

I tried to search on sii site, but could not find this information.

Many thanks for the help.

Ramana

paladin
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Re: Personal Income Tax Rates

Post by paladin » Wed Mar 28, 2018 8:34 pm

Personal income tax rates are shown in the ley de impuestos sobre la renta Art 43. They are shown based on assumed monthly income in uints of unidades tributarias mensuales. So for annual rates, just multiply by 12.
So, if the monthly income doesnt exceed 13.5 utm, the income rate is zero.
on the amount that is more than 13.5 utm up to 30utm, you pay 4%
on the amount that is more than 30utm up to 50utm , you pay 8%
on the amount that is more than 50 utm up to 70utm , you pay 13.5%
on the amount that is more than 70utm up to 90utm , you pay 23%
on the amount that is more than 90utm up to 120utm , you pay 30.4%
on the amount that is more than 120 utm up to 150 utm, you pay 35.5%
on the amount that is more than 150utm you pay 40%

so the total tax you will pay, is the sum you calculated for each segment

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Space Cat
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Re: Personal Income Tax Rates

Post by Space Cat » Wed Mar 28, 2018 11:30 pm

The ones above are for employers paying for their employees if I understand correctly.

For self-employed (honorario), it's at the very bottom of any SII page, Datos y valores de Renta link:
http://www.sii.cl/valores_y_fechas/impu ... to2018.htm

paladin
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Re: Personal Income Tax Rates

Post by paladin » Thu Mar 29, 2018 7:25 pm

Space Cat wrote:
Wed Mar 28, 2018 11:30 pm
The ones above are for employers paying for their employees if I understand correctly.

For self-employed (honorario), it's at the very bottom of any SII page, Datos y valores de Renta link:
http://www.sii.cl/valores_y_fechas/impu ... to2018.htm

It’s the same in the end. It’s just that the renta imponible is different in the case of those who get honorarios

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Space Cat
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Re: Personal Income Tax Rates

Post by Space Cat » Thu Mar 29, 2018 7:49 pm

paladin wrote:
Thu Mar 29, 2018 7:25 pm
It’s the same in the end. It’s just that the renta imponible is different in the case of those who get honorarios
Is it smaller in the case of employees? Renta imponible is 80% for honorarios as far as I know and it's calculated after contributions to AFP/ISAPRE.

I'm trying to find some sane guide or calculator because everything available online is a huge mess. I'll get an accountant soon but if somebody could check my understanding, I'd appreciate it.

Let's say I get CL$2,000,000 a month:
1. ~11% goes to AFP, I'm left with $1,780,000
2. I don't pay FONASA, so I hope there's no 7% cut
3. Renta imponible from the remainder is $1,424,000
4. Impuesto Único de Segunda Categoría for this amount is 4.52%
5. But "Cantidad a rebajar" is ~$82,303, so $1,424,000 minus $82,303 is $1,341,697
6. 4.52% from $1,341,697 is ~$60,644, this is how much I owe in taxes

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admin
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Re: Personal Income Tax Rates

Post by admin » Thu Mar 29, 2018 8:37 pm

For self-employed there is a base deduction, so around 12 million pesos (dont quote me, i have no idea what the current amount is, it increased with the last tax reform), you dont pay taxes for a self employed individual. Taxes are calculated above that.

There is also an assumed deduction for expenses, think it is like 30% above that; that once you cross that amount, it becomes worth doing essentially an itemezation of expenses to increases the deduction.

If your american, paying in to the chilean afp, allows you to opt out of the u.s. social security system, and avoid the 12.5% self-employment tax.
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Space Cat
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Re: Personal Income Tax Rates

Post by Space Cat » Fri Mar 30, 2018 1:11 am

Oh, that sounds great. The income tax brackets look scary when you don't know about all these reductions.

paladin
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Re: Personal Income Tax Rates

Post by paladin » Fri Mar 30, 2018 7:50 pm

Just to clarify a couple of points. The deductible that admin mentioned, is in effect, the amount I mentioned relating to tne first 13.5 utm, which for this year is a little over $7000000. People whose income comes from boletas, ie self employed, are also entitled to deduct 30% of their income, dubect to a max of 15 utm, instead of having to keep detailed accounting records of their expenses ( Art 50). There are very few deductions allowed in Chile, compared with other countries, which makes it much easier to calculate your taxes.
If you dont pay for any kind of medical expenses, then you get no deduction.

I have to say, I do like the way SII works as far as individuals are concerned, in that they already know about any income you have received in Chile, from boletas, bank interest, dividends, and they adjust them automatically for inflation, in the proposed tax return. So all you need to do is enter income from outside Chile, and your tax liability/ refund, is calculated automatically.

ghibli
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Re: Personal Income Tax Rates

Post by ghibli » Fri Mar 30, 2018 9:06 pm

Greetings. Although I don't wish to appear completely stupid, I have spent hours on the SII website and still do not know: What and how much is an "utm." Were exactly is the actual form to be filled out and filed? How exactly does one pay? All of my income is from outside of chile.
Some is actually from savings. How do I explain that and to whom?

Thanks.

dmwbmw2
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Re: Personal Income Tax Rates

Post by dmwbmw2 » Fri Mar 30, 2018 11:01 pm

UTM is worth 46,692 pesos today.
unidad tributaria mensual

Get the daily value, which changes with inflation etc on

www.indicadoresdeldia.cl

ghibli
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Re: Personal Income Tax Rates

Post by ghibli » Sat Mar 31, 2018 9:42 am

Thanks dmwbmw2. Still confused but less so. So using paladin's example, it should read 700.000 not 7.000.000? Also - anyone - please, where are the forms? I looked on the SII site and didn't find anything.

paladin
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Re: Personal Income Tax Rates

Post by paladin » Sat Mar 31, 2018 10:44 am

ghibli wrote:
Sat Mar 31, 2018 9:42 am
Thanks dmwbmw2. Still confused but less so. So using paladin's example, it should read 700.000 not 7.000.000? Also - anyone - please, where are the forms? I looked on the SII site and didn't find anything.

Sorry, I just noticed a typo. I said 15 utm but should have said 15uta

You havent said whether you are looking for the form 22, annual tax return or what?

the tax system in Chile is complicated and often ambiguous( maybe on purpose) . You may have read in the papers about the major problemstax accountants are having this year with business tax returns, as the new laws are open to interpretation as they are so badly written, as well as being badly thought out. Our friend Pinera hopes to correct a number of them.

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