Verified Facts
Tax rates in Colombia range from 0% to 33% for personal income, with a corporate tax rate of 25%, and the country has a territorial taxation system, where residents are taxed on their Colombian-sourced income.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Colombia has a territorial taxation system, where residents are taxed on their Colombian-sourced income, and non-residents are taxed only on their income derived from Colombian sources. The residency rules for tax purposes in Colombia are based on the individual's physical presence in the country, with individuals being considered residents if they have a permanent home in Colombia, or if they spend more than 183 days in the country within a calendar year.
The Colombian tax system is administered by the Dirección de Impuestos y Aduanas Nacionales (DIAN), which is responsible for collecting taxes, customs, and other government revenues. The tax system is designed to promote economic growth, reduce poverty, and increase government revenues, with a focus on tax fairness and compliance. Colombia has a network of tax treaties with other countries, which helps to reduce double taxation and promote international trade and investment.
Personal Income Tax
| Income Bracket (COP) | Tax Rate |
|---|---|
| 0 - 1,090,000 | 0% |
| 1,090,001 - 4,357,000 | 19% |
| 4,357,001 - 10,670,000 | 28% |
| 10,670,001 - 18,970,000 | 33% |
| 18,970,001 and above | 33% |
| The personal income tax in Colombia is progressive, with higher income brackets subject to higher tax rates. Taxpayers are allowed to claim deductions and allowances for expenses such as mortgage interest, charitable donations, and education expenses. The tax filing deadline is typically in April of each year, and taxpayers can file their tax returns online or through a tax professional. It is recommended that taxpayers consult a tax professional to ensure compliance with all tax laws and regulations. |
Corporate & Business Tax
- The corporate tax rate in Colombia is 25%, which applies to all business profits, including income from sales, services, and investments.
- Small businesses and start-ups may be eligible for tax incentives, such as reduced tax rates or exemptions, to promote entrepreneurship and job creation.
- Colombia has a network of free zones, which offer tax exemptions and other incentives to businesses that operate within these zones.
- Businesses must register with the DIAN and obtain a tax ID number to operate in Colombia.
- Businesses must also comply with value-added tax (VAT) regulations, which apply to most goods and services.
VAT / Sales Tax
- The standard VAT rate in Colombia is 19%, which applies to most goods and services.
- There are reduced VAT rates of 5% and 0% for certain goods and services, such as basic food items, healthcare services, and education.
- Some goods and services are exempt from VAT, such as financial services, insurance, and real estate transactions.
- Colombia has a tourist refund scheme, which allows foreign tourists to claim a refund of VAT paid on certain goods and services.
For Expats & Foreign Workers
- Tax residency rules apply to expats and foreign workers, who are considered residents if they spend more than 183 days in Colombia within a calendar year.
- Colombia has a network of double taxation treaties with other countries, which helps to reduce double taxation and promote international trade and investment.
- Expats and foreign workers may be subject to social security contributions, which are used to fund pension, healthcare, and other social benefits.
- Expats and foreign workers must comply with tax laws and regulations, including filing tax returns and paying taxes on their Colombian-sourced income.
- Expats and foreign workers may be eligible for tax credits for taxes paid in their home country, which can help reduce their tax liability in Colombia.
- Expats and foreign workers should consult a tax professional to ensure compliance with all tax laws and regulations.
Crypto & Investment Income
- Investment income, such as dividends, interest, and capital gains, is subject to taxation in Colombia.
- Cryptocurrency transactions are subject to taxation, with gains from cryptocurrency sales subject to capital gains tax.
- Dividends paid to shareholders are subject to a withholding tax of 5%, which can be reduced or eliminated under certain circumstances.
- Capital gains from the sale of securities, such as stocks and bonds, are subject to a capital gains tax of 10%, which can be reduced or eliminated under certain circumstances.