If you are a foreigner already living in Chile or you are planning on doing so, you will most likely encounter Chilean bureaucracy. Like all bureaucracies, it sucks really bad, but with the added problem that most of the people you are going to deal with in Chile will have no idea about anything you are asking them. Literally. I have performed the experiment of calling the callcenters at ChileAtiende and the SII (Chile’s Tax Office) several times asking the same exact question and receiving completely different answers. Needless to say, I had a great time while I was first figuring out how to invoice using boletas de honorarios.
So, after hours and hours on the phone, researching on the internet, and my own personal experience during the past year, I consider myself to be in a good position to give away all my knowledge for free. In this post, I am going to share with you the process of how to become a freelancer in Chile and be able to invoice boletas de honorarios (the local name for the equivalent of recepits) to your clients. I basically went through bureucratic hell so you don’t have to.
It might not look like a big deal, but it is a very important issue, since even your residence in the country can depend on it. I recently encountered the case of a US citizen who, after being in Chile for two years, is now facing problems renewing her visa due to mistaken information she received at the tax office shortly after her arrival. She works for a US company remotely. Once she arrived in Chile and obtained her RUT, she went to the SII to ask how she could invoice boletas de honorarios to her employer/client back in the US. Whoever was behind the information counter at the SII looked at her like that was the weirdest question they have ever heard and told her that it was impossible to invoice a foreign company that (since it’s not Chilean) doesn’t have a RUT number. This, as you are about to read, is false and had some unfortunate consecuences for her. I hope you find the following tip to be useful when fighting through bureucracy.
Disclaimer: The information contained in this post is strictly based on my personal research, experience and hours spent on the phone with Chilean information call centers. None of this information should replace anything obtained from an official source. If you need to clarify anything that might be a big deal, always ask an expert.
Once you have your RUT (not only your number but the physical ID card -this is very important) you can start the procedure of registering as a freelancer and invoicing Boletas de Honorarios. These are the three steps:
1. Signing in at the SII (Sistema de Impuestos Internos)
If you are in Santiago, it is located at Santa Rosa 108. Preferably, get there early in the morning to avoid the crowd. Once you are there, ask for a number to start operating online. They will ask you for your RUT and will give you a piece of paper that looks like this:
Once you have this, you can register at the SII website. To do so, you need to go to the SII website (http://home.sii.cl/) and click on Identificar nuevo contribuyente (sign in as a new taxpayer).
Then, fill in your RUT number (i.e. 123.456.789-K) and the Clave Inicial (Initial key) we mentioned above:
You will then be asked to fill out some personal and professional information. Under Actividades económicas vigentes (current business activities) select OTRAS ACTIVIDADES DE SERVICIOS PERSONALES N.C.P. Under Descripción general de Actividad, indicate your main professional activity: software development, graphic design, english teaching, business development, marketing, etc. (it can be in English).
It is important to note that your Inicio de actividades (initiation of business activities) date is usually the same day you register on the SII website.
Once you have filled in all the boxes, you can validate the form and you will be redirected to a new page that confirms you have been successfully registered.
2. Invoicing your first boletas de honorarios
Log in at the SII website and then go to Mi SII.
Select Emisión Boletas de Honorarios:
And then select Emitir boleta:
Emitir boleta > Por contribuyente:
Now you have to pick who is going to pay the 10% tax associated with the boleta de honorarios. Depending on if you are invoicing a Chilean or foreign company; or an individual, you might have to pay a tax associated with the boleta de honorarios.
- If you are invoicing a Chilean company, you will have to discuss it with the company and decide who is going to pay the given tax. If the company is going to do it, then you will have to invoice the NET amount.
- If you are invoicing a natural person (Chilean or not) or a foreign company, then you, as the issuer, will have to pay the 10% (mandatory). In this case, you must invoice the GROSS amount. In the image below, you will have to choose the second option.
Then select Continuar. Make sure your personal information is correct. Then, fill in the boxes under Ingrese la fecha de la boleta y datos de identificación del destinatario:
- If you are invoicing a Chilean natural person, you will have to type their RUT where it says RUT Destinatario. If you are invoicing a foreign natural person or foreign company, you will have to type the following number: 44444446-0.
- Write their name under Nombres Destinatario, their address under Domicilio Destinatario, specifying the city and country. Then select any Región and any Comuna if you are invoicing someone outside of Chile.
- Where it says Prestación 1 you will have to write a short description of the service provided. It can be something like Business Development in Chile, Consultoría Comercial, Consultoría Financiera… you name it.
- Don’t forget to add the price of the service provided under Valor 1.
Remember, if the company is going to pay the 10% tax, then you will have to invoice the NET amount. On the other hand, if you are invoicing a natural person or a foreign company, then you, as the issuer, will have to pay the 10% tax. In this case, you must invoice the GROSS amount.
Then click on Confirmar emisión and the system will generate an invoice in PDF format that you can send to your client or employer.
3. Paying your monthly taxes
If you selected to pay the 10% tax for the boletas de honorarios, you will have to declare (and pay) those taxes every month. Yes, every month, you will have to pay 10% of all the boletas de honorarios you invoiced the previous month. The deadline for this payment is on the 12th of each month. This procedure has to be done through a document called F29.
To fill out this F29 document, go to Mi SII and then select Declaración Mensual (F29-F50):
Then, Declaración Mensual (F29-F50) > Declarar y pagar (F29 y F50):
It will redirect you to the following page:
Go to the top left corner and under Declarar por select Formulario en pantalla:
You will see a screen like this:
Make sure the information is correct and then click Aceptar.
You will then see this page:
Look for line 61 (cell 152) and fill it in with the 10% of all the boletas de honorarios you invoiced the previous month.
- I.E: If you invoiced a total amount of 1,500,000 CLP (to either one or several clients), type “150000” (without periods or commas):
Hit enter and the cells numbered 63 and 111 will be filled in automatically. Scroll down until the bottom of the document and hit Validar. If you did everything correctly you will get a message like this:
Hit Ok and then Continuar on the screen below:
It will give you two payment options, but remember you will need to have a chilean bank account (and debit/credit card) for all of them. It does not work with foreign debit/credit cards. Select Pago Electronico en Linea (PEL):
Select your bank from the list below:
It will then redirect you to your bank’s online banking site where you can complete the payment. At that point, you will be done!
Important: This guide should give you a more general idea about how the invoicing of Boletas de Honorarios works. One thing I have learned during these past two years in Chile is that attitude is key. A lot of people you are going to have to deal with would rather tell you that something doesn’t exist or you can’t do something just because they don’t want to take the time to do some research or ask someone else. Do not hesitate to tell them they’re wrong, they will eventually transfer you to someone higher up. Knowing your stuff and being persistent will get you to talk to the people who (hopefully) know how things work.
By the way, starting in January 2015, you also need to sign up at an AFP and pay monthly taxes for that as well. But that is something we will touch on in a different post.
Good luck everyone!