The Chilean Tax Office reported that during this year there will probably be about 950K SMEs that will declare income, with an annual growth average of 25K. Regarding the 2018th Declaration, the Tax & Legal partner of Kreston MCA, Juan Marín, warns that small and medium-sized companies should work well in advance to be preparing for the April process, in accounting closings, external auditing processes and adjustments.
Initially, “the terms are advanced to February and after the resolution of the SII – on Friday, 1st of December – with the declarations of tax bases and balance sheets, form 1926 (to March 15 and May 30 respectively).
Secondly, “it is essential to pay attention to what is declared, since this year is the first year in full implementation of the tax reform, so that all pending modifications, especially the new profit registers, will be put into practice. In this way all control is fundamental.
In this context, the executive delivers five tips for SMEs:
- Work in an orderly way in the profit registry that corresponds to each tax regime that you have selected. If you have a combination of both, you should review the tax effects of the combination, in each case.
- In the case that you have used utilities that paid the substitute tax to the FUT, you must register it properly to avoid confusion with the profits that do pay tax.
- In that case, you must establish to which profits you will allocate the withdrawals (according to imputation orders) considering withdrawals and reductions of capital and the associated credits.
- The high number of incomes to be issued must be in mind, both the previous ones and the later ones of the rental operation process, since all this large amount of complementary information serves to the Chilean Tax Office to control the income tax. As such, it may generate subsequent inspection processes and delays in tax refunds, if applicable.
- In the case of small taxpayers in preferential regimes, the tax benefits that have been used in the year must be taken, for purposes of their declaration in the period of income tax operation, such as accelerated or instantaneous depreciation, suspension of taxes payments (VAT and PPM), application or imputation of part of utilities as expenses. Restrictions to the use of general and private expenses, among others.
Finally, the Tax & Legal partner of Kreston MCA comments that “there is not enough clarity as to the effects that the interaction of these regimes can generate, nor in relation to the declaration processes in each of these”.