The tax authority in Colombia is the DIAN (Direccion de Impuestos y Aduanas Nacionales de Colombia). Taxes are collected on the earnings obtained in Colombia by companies and individuals, whether nationals or foreigners.

Tax rates in Colombia are generally high, with the corporate tax as much as 34%, and several reforms are under way. The most recent changes in the Colombian tax code were implemented in 2016.

The fiscal year-end  in Colombia is December 31.

Individual Tax in Colombia

Individual tax is due in Colombia by both fiscal residents and non-residents.

• Fiscal residents are persons who, continuously or not, reside in Colombia for a minimum of 183 days out of a 365-day period, regardless of nationality. Fiscal residents are taxed on worldwide income and need to report equity owed in other countries as well as in Colombia.
• Non-residents are persons who, while not meeting the fiscal residency criteria, obtain taxable income in Colombia according to local law. They are only obliged to report Colombian-sourced income and equity.

There are several types of taxable income in Colombia:

• Employment and pension income
• Non-employment and capital income (interest, financial income, rent, royalties, intellectual property income)
• Dividends

The tax rates differ depending on the type of income earned. Colombia has a progressive tax rate for individual taxes, depending on the taxable base. Taxable base is calculated in fiscal units (Unidad de Valor Tributario - UVT), the value of which is set yearly by the DIAN. In 2018, the value of a UVT is COP 33,156. All income is considered, but deductions may apply for some social security benefits, health insurance costs and school expenses.

Employment income below 1090 UVT, and non-employment and dividend income below 600 UVT are not taxed. Marginal rates from 5-35% are applied for income above these thresholds. Specific rates depend on type and level of income.

There are no significant differences between foreigners and locals for the income earned in Colombia. Expats are subject to the same taxation levels if they are tax residents. Non-residents are subject to a flat 35% tax rate. 

Reporting Taxes in Colombia

In order to file a tax return, foreigners must first obtain a National Idetification Number (NIT) that will be used for tax purposes.

The tax returns in Colombia are called Declaracion de Renta and need to be submitted individually by each taxpayer. Tax returns are filed with the DIAN, and the deadlines for filing vary each year, with declarations being accepted until October. The exact due date is based on the last two digits of the individual's tax identification number. Please check the Tax Calendar (Calendario Tributario on the DIAN website).

Tax returns are only mandatory if the individual meets a number of conditions relating to total income, gross equity, whole purchases or accumulated balance of bank accounts and financial instruments. The thresholds for each vary from year to year, so it is important to check them periodically.

Outstanding tax amounts must be paid when filing the tax return.

Refunds

There are no tax refunds for residents in Colombia. People entering the country on a tourist visa and having purchases over 10 UVT may request their VAT to be reimbursed.

VAT in Colombia

Value Added Tax (Impuesto al Valor Agregado – IVA) in Colombia is currently 19% for most goods and services, with exceptions such as public transport, utilities, education and some basic goods. VAT is charged on imports as well.

VAT is already included in the selling price of goods and services.

Double Taxation Treaties with Colombia

Colombia has signed double taxation treaties with certain countries, providing tax relief for residents who also pay income tax there.  As of 2018, the list of countries with which double taxation agreements were signed included Bolivia, Canada, Chile, the Czech Republic, Ecuador, France, India, Mexico, Peru, Portugal, South Korea, Spain, Switzerland and the United Kingdom.

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