ANNUAL INCOME TAX RETURN CONSIDERATIONS
The Chilean Income Tax Law is the rule that establishes who is required to file the Annual Income Tax Affidavit in that country.
Likewise, this return must be filed through Form 22, which was introduced to the Chilean tax system as of 1999, through Resolution N°5944 issued by the Servicio de Impuestos Internos – SII (Chilean Internal Revenue Service – IRS), being amended in its form and content over the years.
This article clarifies certain frequent questions that taxpayers may have regarding this return.
Who is required to file the Annual Income Tax Return?
According to Article 65 of the Income Tax Law (the Law), taxpayers who generate taxable income within the first category income, such as companies. Likewise, individuals will also be required if they have obtained income greater than 13.5 Annual Tax Unit (ATU).
Who is exempted from the Annual Income Tax Return?
Individuals who do not exceed 13.5 ATU in annual taxable income are not required to file an Annual Income Tax Return, nor taxpayers whose tax obligation is fulfilled monthly, such as individuals who obtain salaries or pensions from a single employer.
Likewise, those taxpayers who pay a substitutional Single First Category Tax, such as small artisanal miners, supplemental miners, among others, will not be required to file a return.
What are the means to file the Annual Income Tax Return?
It may be filed through physical means or by electronic transfer, Form 22.
If it is filed by physical means, the IRS page provides a link to download said Form to be filled out and filed at the Tax Administration offices.
How to file the Annual Income through Form 22 by electronic means?
Enter the IRS web page, select online services, and click on the option “declare income”.
Then, indicate the TIN and the Tax Code, select the tax year to be declared, and click on accept.
In this section, you will find a proposal of the Annual Income Tax Return of the selected year based on the information of your income, withholding agents, among others. This procedure will be available only as of the end of March.
If the information found therein is correct, not requiring any modification, the taxpayer may continue and send it.
In this way, the Income Tax Return will have been filed.
It should also be noted that the Income Tax Return may also be filed with an online tax payment, which may be charged whether a checking account, credit card, or electronic bill payment.
In the latter case, there are two options through the payment as a bank transfer charged to a checking account, so although the order bank is transferred online, the payment confirmation may delay up to 48 hours. After the financial institution chosen pays, the Receipt Certificate of the Income Tax Return will be granted to the taxpayer.
The second option is the payment at maturity, so those taxpayers who maintain active transfers may file the return but indicate that the payment will be made by the bank later.
What is the deadline for taxpayers to file their Annual Tax Return?
The return filing and the Annual Income Tax payment are due in April if is made by electronic payment on April 28 and paid online on April 30.
How can I check my return status?
Enter the IRS’ web page, go to the “online services” option, then click on the “Income Tax Return” option, and select in the menu the “Consult Income Tax Return Status” option, where information is provided regarding the filing date, page number, and result of the return.
What is the penalty for filing the Annual Affidavit out of the deadline?
If tax returns were filed after the established deadlines, a fine of 10% of the tax-adjusted by the Consumer Price Index (CPI) will be imposed when the delay does not exceed 5 months.
After 5 months, the fine will increase by 2% for each month or fraction thereof but may not exceed 30% of the tax.
If the return has been filed with a refund, the fine will be ranging between one Monthly Tax Unit and one Annual Tax Unit.
What happens if a balance is generated in favor of the taxpayer?
If it is noted that no unpaid tax by the taxpayer at the moment this is filling the return out, but obtained a balance in his favor, the tax refund may be collected, leaving the data of the means which he wishes to be made, in Form 22.
As to the means used for the refund, there shall be a check, an electronic transference, and a cashier.
It will be possible to verify if you are entitled to it through the IRS web page. The refund date will depend on the return filing date, which is commonly done in May.
Is it possible to request an early Income Tax refund?
Yes, you can request a percentage of early Income Tax refund, if during the previous year provisional mandatory monthly payments were made.
This benefit only applies to MSMEs whose sales in October have varied by 10% or more in relation to the average declared on Form 29 in the last 12 months.