I have not read the details yet but if anyone knows … if you are a permanent resident but only spend a few weeks per year in Chile does this apply? I am thinking I am not a tax resident since I basically don’t spend any time in Chile.
If you are a lawful permanent resident then the tax laws would apply to you, no matter where you actually physically live.
So, you are saying that all permanent residents are by default also tax residents. Are you really sure about that? , it goes against some advice I got from a tax lawyer some time ago (actually a long time ago ;-)).
You’re welcome to take your chances and read the current law, and consult someone with greater credentials who is truly conversant in the new provisions. Once you take on permanent residency even if you don’t live in the country, Chile considers you subject to their taxation ideas. And now is the time to consider abandoning your status as a permanent resident, and becoming a tourist…
Las personas con residencia definitiva en Chile tienen las mismas obligaciones tributarias que cualquier otra persona que reside en el país. Esto significa que deben pagar impuestos sobre las rentas generadas en Chile y en el extranjero
Exceptions: Pension payments are exempt. from taxation. During the first three years of residency foreigners are exempt from taxation on foreign income.
Thanks for the info.
I can see how the above excerpt can be read as perm residency visa = tax residency, but I think the devil or perhaps angel in this case is in the details
The above excerpt indicates a permanent resident in chile versus a permanent resident outside of chile.
The term “resident” is key in that a permament visa holder can live outside of chile all year, ans while having the residency visa they are not actually resident neither actually resident or tax resident
This is the SII tax system description:
https://www.sii.cl/aprenda_sobre_impuestos/estudios/sistemrenta_ingles.htm
It uses the term “resident” and then defines it as physical presence versus an administrative/immigration status
So with this basis then the foreigner who lives in say Canada all year every year but maintains their permanent residency visa in chile would not be tax resident in chile for any income except for chilean source income.
However…to come full circle…chile may still want someone with a permanent visa to still disclose/report their foriegn assets even if they are not taxable. Similar to how the US wants foreign accounts disclosed each year with FATCA or FINRA regardless of the US taxability status.
If the assets are not taxable then there is no harm is reporting them anyway. But if they are not reported and then discovered through tax treaty information exchange, then you could end up in an uncomfortable position even if you are ultimately found to have done nothing wrong or made no mistake
Feels like 1984
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Yup.
I mean, sí po.
Trivia tidbit:
If you search for the prior version of the now online-only Formulario №1920, you come up with one from exactly 10 years ago, October 2014, which was also a voluntary and extraordinary declaration for the same stuff.
And who was the President at that time? It was 7 months into Bachelet 2.
More research, and I’m at a loss why so few big media outlets are reporting on this as yes it affects resident expats A LOT and also all the Chileans that have any investments and money abroad.
And it does seem to be very individual in the risk vs. reward calculations that go into it.
Why didn’t a certain (no longer existent) reputable, led by lawyers, expat in Chile forum NEVER stress the importance of it. I recall, they even brushed off the concept of bothering to report international stuff.
All the copy and paste expat to Chile web pages only scratch the surface after they talk about the three year tax holiday with NO DETAILS on what you need to do afterwards.
My research shows there is a certain declaration due mid-year that a citizen or resident is supposed to do each year and that is then connected to an end of the year filing.
How many tens of thousands of expats in Chile from god knows how many countries are unaware of this?
As the new same tax law also includes informant incentives, you all are on your own and you should trust no one unless a real certified accountant in these matters. KPGM in my research seems to be the only ones that know their shit (or at least show it in their public publications) on these matters.
If one does some research, it seems that once you do this declaration, you are already late for the mid-year overseas declaration for 2024 and still must do the end of year 2024 declaration and repeat this forever till your tax residence changes.
You all are on your own.
Leisure wiki reading:
FYI - Regarding the CRS standard…this applies between pairings of most south american and european countries and includes automatic exchange of information which means both countries will automatically exchange information for people that are citizens/residents between states that have signed onto CRS.
One of the major exceptions to CRS is the USA. USA has not signed onto the CRS. Rather and however since the beginning of 2024 there is a tax treaty ratified between the US and Chile that does involve information exchange provisions, albeit not automatic exchange provisions. It means that information must be manually requested in a multi stage process that takes time as defined by the treaty for each stage of the process and that requires effort and attention. Reading the tax treaty with Chile for your original/home country would be very helpful to understand your situation. If your original/home country is a CRS signatory then accordingly there is already automatic exchange of information
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DAMN +++++ for that info.
I do not want to discourage anyone from posting such relevant info. Just do it in a neutral way that doesn’t impact the poster themselves.
Lot of read between the lines here and only you can decide what is best for you. Suerte, and have a pisco sour or two when reading this stuff minus any third party persons with a smirk on their face as they hand you that fourth pisco sour.
Although most of this video is taken up with the incessant (and imho irrelevant) exposition of the sexual shenanigans of the powers-that-be, some financial matters are addressed towards the end, particularly this measure.
Tomas Mosciatti’s take is that once declared, foreign capital gains will continue to be liable for taxation in the future. Given the uncertain outcome of the pending tax reforms going through Congress, its understandable that those affected have been reluctant to comply with this measure.
Again, according to Mosciatti, (at around 49:17 of this video) the government hoped to recoup US$659M through this initiative, but so far have only obtained US$6.8M.
From my mostly Chilean POV, the swingeing increases in property taxes, and the increased powers of the SII currently being considered, in their attempts to squeeze blood out of a stone, are more worrying portents of an increasingly statist, anti-capitalist future.
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