Taxation in Colombia

See Government of Colombia for a broader perspective of Colombian government.

Taxation
An aspect of fiscal policy
Policies Government revenue Tax revenue Non-tax revenue Tax law Tax bracket Tax threshold Exemption Credit Deduction Tax shift Tax cut Tax holiday Tax advantage Tax incentive Tax reform Tax harmonization Tax competition Double taxation Representation Unions Medical savings account Tax, tariff and trade
Economics General Theory Price effect Excess burden Tax incidence Laffer curve Optimal tax Theory Optimal capital income taxation Distribution of Tax Tax rate Flat Progressive Regressive Proportional
Collection Revenue service Revenue stamp Tax assessment Taxable income Tax lien Tax refund Tax shield Tax residence Tax preparation Tax investigation Tax shelter Private tax collection Tax farming
Noncompliance General Tax avoidance Tax evasion Tax resistance Tax shelter Smuggling Black market Unreported employment Corporate Tax inversion Transfer mispricing Base erosion and profit shifting (BEPS) Double Irish Dutch Sandwich Single Malt CAIA/Green Jersey Locations Tax havens Corporate tax havens Offshore financial centres (OFCs) Offshore magic circle Conduit and Sink OFCs Financial centres Financial Secrecy Index Major examples Apple €13 billion fine Ireland as a tax haven Leprechaun economics Liechtenstein tax affair Luxembourg Leaks Offshore Leaks Paradise Papers Panama Papers Swiss Leaks United States as a tax haven Panama as a tax haven
Types Direct Indirect Per unit Ad valorem In rem Capital gains Carbon Consumption Dividend Ecotax Excise Fuel Georgist Gift Gross receipts Income Inheritance (estate) Land value Payroll Pigovian Property Sales Sin Single Stamp Steering Turnover Value-added (VAT) Corporate profit Excess profits Windfall profits Negative (income) Wealth
International Financial transaction tax Currency transaction tax European Union Common Consolidated Corporate Tax Base (CCCTB) Tobin tax Spahn tax Tax equalization Tax treaty Permanent establishment Transfer pricing European Union FTT Foreign revenue rule
Trade Custom Duty Tariff Import Export Tariff war Free trade Free trade zone Trade agreement ATA Carnet
Research Academic Mihir A. Desai Dhammika Dharmapala James R. Hines Jr. Ronen Palan Joel Slemrod Gabriel Zucman Advocacy groups Tax Justice Network (TJN) Institute on Taxation and Economic Policy (ITEP) Oxfam (UK) Tax Foundation (US) Tax Policy Center (US)
Religious Church tax Eight per thousand Teind Tithe Fiscus Judaicus Leibzoll Temple tax Tolerance tax Jizya Kharaj Khums Nisab Zakat
By country All Countries List of countries by tax rates Tax revenues as % of GDP Tax rates in Europe Individual Countries Albania Algeria Argentina Australia Azerbaijan Bangladesh Bhutan Brazil Bulgaria BVI Canada China Colombia Croatia Denmark Finland France Germany Greece Hong Kong Iceland India Indonesia Iran Ireland Israel Italy Japan Kazakhstan Lithuania Malta Morocco Namibia Netherlands New Zealand Norway Pakistan Palestine Peru Philippines Poland Russia Singapore South Africa Sri Lanka Sweden Switzerland Taiwan Tanzania United Kingdom United States Uruguay

Taxation in Colombia is determined by the Congress of Colombia, every Department Assembly and every City Council, which determine what kind of taxes can be levied and which rates can be applied. The country inherited a harsh and diffused taxation policy from the Spanish Empire characterized by a heavy reliance on customs duties.

National taxes

National taxes are administered by the National Directorate of Taxes and Customs (Spanish: Dirección de Impuestos y Aduanas Nacionales, DIAN). Some of these taxes include:

VAT

The value-added tax (VAT) is the main indirect tax. Apparently, this is rising to 19 percent in 2017; up to the end of 2016 the tax was 16 percent of the price of merchandise, goods and services with some exceptions: public transportation, water supply and sanitation and the transportation of natural gas and hydrocarbons. The DIAN recognizes two separate categories (regimenes) of VAT: common and simplified. The first refers to businesses with estimated patrimony over 68 million Colombian pesos (about 34,000 USD), and the second refers to those with patrimony less than that. Although both are obligated to pay the same percentage, the simplified taxpayers are not obligated to conduct separate bookkeeping for the VAT or to generate invoices.

Financial transactions tax

A 0.4% tax rate is imposed on all financial transactions, including withdraw money from ATM, promissory notes, wire transfers, internet banking, bank drafts and bank checks, money on term deposit, overdrafts, installment loans, securities underwriting commitments and other forms of off-balance sheet exposures, safekeeping of documents and other items in safe deposit boxes, currency exchange or unit trusts.

Patrimony tax

This tax requires the annual payment of 0.3% of the total patrimony of people with patrimony estimated over 3 billion pesos (about 1 million USD).

Income tax

• Corporations: Income tax (Spanish: Impuesto a la renta y complementarios) must be paid by all local and foreign corporations operating in Colombia, who are subject to a corporate tax of 25%.
• Individuals: Colombian citizens and foreign nationals who have lived in Colombia for more than 183 days total in any 365 day period not necessarily a calendar year, are considered to be tax residents (residentes fiscales) and are thereafter subject to individual Income tax based on a system of graduated marginal tax rates.

The table below shows the tax rate in units of UVT (Unidad de Valor Tributario), in which 1 UVT = $33.156 COP for 2018. See UVT.

Income Range in UVT	Tax Rate
0 to 1,400	0%
>1,400 to 1,700	19%
>1,700 to 4,100	28%
>4,100	33%

Income declaration

In Colombia the natural persons who must present income declaration are classified on the next table.

Requisites	Ammount in UVT
Natural person with gross asset value	>4500
gross revenue incomes upper 3.868.166 COP /monthly or Earnings Consumes and purchases If consumes through credit card If cummulative value of banking deposits, wire transfer or financial investment	>1400

For 2019 are:

• Natural person with gross asset value upper $149.202.000 COP. (4500 UVT)
• Natural persons with gross revenue upper $46.418.000 COP per year. (1400 UVT)
• Natural person with incomes upper 3.868.166 COP /monthly (Earnings $46.418.000 per year). (1400 UVT)
• Consumes and purchases upper $46.418.000 (1400 UVT)
• If consumes through credit card exceeds $46.418.000 (1400 UVT)
• If cummulative value of banking deposits, wire transfer or financial investment, exceeds $46.418.000 COP. (1400 UVT)

See UVT.

Payroll taxes

Both the employer and the employee are subject to monthly payroll taxes from the employee's gross salary, as follows:

• Employer:
  • Health plan - 8.5%
  • Occupational risk - 0.348% - 8.7%
  • ICFB (Instituto Colombiano de Bienestar Familiar; Family Welfare) - 3%
  • CAJA (Cajas de compensación familiar; Family compensation funds) - 4%
  • SENA (National Occupational Training Service) - 2%
  • Pension fund - 12%
  • Vacation - 4.17%
• Employee:
  • Health plan - 4%
  • Pension fund - 4%

Local taxes

The local taxes are fixed by Local Councils through Acuerdos. This group of taxes includes:

• Impuesto a ganadores de loterías: Tax on lottery winnings
• Impuesto a loterías foráneas: Tax on out-of-state lottery tickets
• Impuesto al consumo de cervezas, sifones y refajos: Tax on beer
• Impuesto al consumo de licores, vinos, aperitivos y similares: Tax on liquor
• Impuesto al consumo de cigarrillos: Tax on cigarettes
• Impuesto al consumo de gasolina: Tax on gasoline
• Degüello de ganado mayor: Tax on slaughterhouses
• Impuesto de registro: Tax to register academic degrees, patents, names, etc.
• Impuesto sobre vehículos automotores: Tax on automobiles
• Impuesto de industria y comercio: Tax on industrial, services or commercial establishments

The local council on each city fix the rate between this parameters:

• From 2 up to 7 per mil (0.2-0.7%) for industrial activities
• From 2 up to 10 per mil (0.2-1.0%) for commercial and services.

• Impuesto de avisos y tableros: Tax on advertising
• Impuesto predial: Property Tax

Tax Value Unity

Tax Value Unity UVT means "Unidad de Valor Tributario" - Tax Value Unit. Instead of setting a range in Colombian pesos, DIAN has a UVT value that is updated at least every year. The next table shows the variation of index in Colombia per year.

Year	Value per UVT (colombian pesos)	Variation	Resolution
2019	34.270	3,36%
2018	33.156	4,07%
2017	31.859	7,08%
2016	29.753

External links

• Taxes in Colombia Official Investment Portal
• [1] Impuestos en Colombia