Expat Community > Chile

cinalaowai
Joined 2016
Posts: 10

Tax Questions

8 years ago

Hi everyone!

I am an American, my wife is Chinese with a US Permanent resident card. We are in the USA now but want to move somewhere with nicer climate and due to high level of income we pay ALOT of taxes in the US. If we leave the US we can avoid paying state income tax (10%) and we would also get the Foreign Earned Income credit if we were outside of the US for 330 days a year. All in all this would save us $60,000 every year and possibly more as our income could increase. We run an online company and work remotely. Our company is an Oregon S-Corporation.

My questions are:

1. As I understand it, the first three years as a resident of Chile we would not pay taxes on income derived outside of Chile, but on the 4th year we would. As the sole owner of my USA S-Corporation I pay myself
$35,000 a year but earn much more in the form of profits from the business which considered "Ordinary Business Income" (not dividends). I am taxed on all this income in the USA, but would the Chilean IRS try to tax me on this income too? Or is there some way for me to indicate to them that I paid taxes on it in the USA and end of story? Or would they want to see my income from my US Company, deduct what the US charged me in taxes and then apply their own tax rate and charge me the difference?

Example:
If I was in Chile, I would pay about 20% taxes on my US derived income (no Oregon state income taxes and reduced Federal Taxes after claiming the Foreign Earned Income Exclusion), but according to Chilean Tax code if I made as much as I do I could be taxed at the rate of 40%. So... would pay I taxes on the 20% in the USA and then pay 40% to Chile but less what I already paid to the US?

2. Finally, we would need to get samples of teas from China and Taiwan sent to us regularly. Any idea about receiving parcels like that? Will they be subject to VAT? Are they likely to get delivered? What delivery services from abroad are the safest and less likely to get hung up in Customs?

Thanks in advance for any help or insight ya'all can offer!

Thanks in advance!

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SJB Global

SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
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SJB Global

SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
Learn More

SJB Global

SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
Learn More

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