Colombia
Financial Year – 1 January- 31 December
Currency – Colombian peso (COP)
Corporate Tax Summary
Residence – A company is considered a resident in Colombia if it meets any of the following conditions:
- It is incorporated in Colombia under Colombian law.
- It has its effective management headquarters in Colombia
Basis of Taxation – If a company is considered resident in Colombia, it will be taxed in Colombia on worldwide earnings (income – costs).
Non-residents companies in Colombia are only subject to taxation of Colombian income.
Permanent establishments of foreign companies located in countries with which Colombia does not have an agreement on income and capital must pay taxes on their attributable income worldwide.
Permanent establishments of foreign companies located in countries with which Colombia does have an agreement on income and capital must pay taxes only on their attributable income in Colombia.
| Reference | ||
| Corporate Income Tax Rate (%) | 35% | Art. 240 Colombian Tax Statute – The general rate of income tax applicable to national companies and their equivalents, permanent establishments of foreign entities and foreign legal entities with or without residence in the country, required to submit the annual income tax and complementary declaration, will be thirty-five percent. |
| Branch Tax Rate (%) | 35% | Art. 240 Colombian Tax Statute |
| Withholding Tax Rate: | ||
| Dividends – Franked | 0% / 15% | Art. 242 Colombian Tax Statute |
| Dividends – Unfranked | 32% + 0% /10% | Art. 242 Colombian Tax Statute |
| Dividends – Conduit Foreign Income | 20% | Art. 245 Colombian Tax Statute – The income tax rate corresponding to dividends or participations received by companies or other foreign entities without main domicile in the country, by natural persons without residence in Colombia and by illiquid inheritances of deceased persons who were not residents in Colombia will be twenty percent. |
| Interest | 15% / 20% | Art. 408 Colombian Tax Statute |
| Royalties from Intellectual Property | 20% | Art. 408 Colombian Tax Statute |
| Fund Payments from Managed Investment Trusts | ||
| Branch Remittance Tax | 20% | Art. 30 and 245 Colombian Tax Statute |
| Net Operating Losses (Years) | ||
| Carry Back | 2 years behind | |
| Carry Forward | 5 years in the future |
Individual Tax Summary
Residence – An individual becomes a resident if he or she remains in Colombia for a period of more than 183 continuous or discontinuous days in a 365-day period, and other specific cases.
Basis of Taxation – Residents in Colombia are taxed on their worldwide source income. To calculate the tax base, some discounts are possible and some income can be reported as exempt income. Non-residents in Colombia are only taxed on income generated in Colombia.
Filing Status – Article 387 of the National Tax Statute establishes that up to 10% of net income can be deducted for each economic dependent. It is important to keep in mind that the total amount of deductions cannot exceed 40% of a person’s net income.
Personal Income Tax Rates
| From | Until | Tax Payable – Residents |
| 0 | 1,090 UVT | 0 |
| >1,090 UVT | 1,700 UVT | 19% |
| > 1,700 UVT | 4,100 UVT | 28% |
| >4,100 UVT | 8,670 UVT | 33% |
| >8,670 UVT | 18,970 UVT | 35% |
| >18,971 UVT | 31,000 UVT | 37% |
| >31,000 UVT | 39% | 39% |
The single rate on taxable income from national sources, of natural persons without residence in the country, is thirty-five percent (35%). The same rate applies to successions of deceased persons without residence in the country.
UVT (its acronym in Spanish) is a unit of tax value which for 2024 is equivalent to COP $47.065.
Goods and Services Tax (GST)
| Rate | 19% |
| Taxable Transactions | In Colombia, goods and services are subject to VAT. The tax is also levied on the provision of digital services from abroad when the service is provided to a resident in Colombia. |
| Registration | Non-resident service providers must register as such with the Colombian tax authority (DIAN). |
| Filing and Payment | Non-resident service providers must submit a form and make the VAT payment. Payment can be made in US dollars. |
Other Taxes Payable
| Tax | Reference |
| Payroll Tax | 9% tax plus 20.5% social security of the monthly payroll. |
| Other cost related to the employee | ICF, compensation box, sena |
| Stamp Duty | o% |
| Land Tax | Known as “impuesto predial”, it is a municipal tax and ranges between 0.3% and 3.3% of the property’s value. |
Industry and commerce tax is a municipal tax and its rates range from two to ten per thousand (4,14-11,4 x 1,000) , depending on the activity carried out.
Last updated: 13.09.2024