After you walk through the process of incorporating, the company will have legal existence, so it can begin to sign contracts or hire services, but will be no subject of taxes until the declaration of Beginning of Activities in front of the Tax Authority.
To avoid fines, this declaration must be made before the end of the second month after the actual business related activities had begun. It can be made online, and is better to ask for advice from a Lawyer or an Accountant to do it properly. If you prefer to do it personally in the Tax Authority offices, you will have to ask for the form 4418, and fill it with the company information.
As this point a Rut Number (Rol Único Tributario) will be generated, if it hasn’t been generated already. This number is unique, and is like the ID of the Company.
After doing the declaration of Beginning of Activities and obtaining the Rut Number, is necessary to exhibit some document to the Tax Authority, like the incorporation documents to demonstrate the appointment of representative and the lease contract or authorization to demonstrate the holding of a tax domicile.
In the case that your company will be subject of the IVA Tax (Tax to the Added Value of products and services) you will need to ask for a verification of the particular business activity that you are declaring to do. This topic will be the subject of another post.
Meanwhile, there is some other Tax that any Company has to take care of. Is the Municipal Tax called “Patente Comercial”. Your company will have to pay this tax in the Municipality with jurisdiction over the tax domicile that you choose. And once again, to avoid fines and over charges, the submission for payment, must be done before 30 days from the Beginning of Activities Declaration.
Is recommendable to be advised by a Lawyer for al this matters, especially if your business will be ruled by special regulation and could need specific authorizations or declarations.
Santiago Henríquez C. Lawyer.
Picture: Simon Schmitt (CC0)