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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:

  1. It is incorporated in Colombia under Colombian law.
  2. 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 (%) 32% Art. 240 Colombian Tax Statute
Branch Tax Rate (%) 32% Art. 240 Colombian Tax Statute
Withholding Tax Rate:
Dividends – Franked 0% / 10% Art. 242 Colombian Tax Statute
Dividends – Unfranked 32% + 0% /10% Art. 242 Colombian Tax Statute
Dividends – Conduit Foreign Income 10% Art. 245 Colombian Tax Statute
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 10% Art. 30 and 245 Colombian Tax Statute
Net Operating Losses (Years)
Carry Back Does not apply
Carry Forward 12

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

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 – Discounts are allowed for economic dependents. This deduction is limited to 10% of income or 32 UVT (tax value units), whichever is less.

 

Personal Income Tax Rates

Taxable Income Tax Payable – Residents Tax Payable – Non Residents
up to 1,090 UVT 0 35%
>1,090 UVT – 1,700 UVT 19% 35%
> 1,700 UVT – 4,100 UVT 28% 35%
>4,100 UVT – 8,670 UVT 33% 35%
>8,670 UVT – 18,970 UVT 35% 35%
>18,971 UVT – 31,000 UVT 37% 35%
>31,000 UVT 39% 35%

UVT (its acronym in Spanish) is a unit of tax value which for 2020 is equivalent to COP 35,607

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.
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 (2-10 x 1,000) , depending on the activity carried out.

Last updated: 04.09.2020