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Taxation in Colombia

Hello All,
               Im considering to retire in Medellin next year. I visited the city this past February and enjoyed the city.  i was very impressed.  Im 61 years old from the USA.
               I would be living on my pension from my job, Social Security benefits, and possibly monthly payments from my 401k.  I have read that if you live in Colombia as an expat for more than five years, Colombia will require you to pay taxes on your income.
              My questions are:  Will I be dual taxed from Colombia and the USA?  If so, Colombia will look at my retirement benefits as taxable income then?  I see there is no  tax treaty between the USA and Colombia.
                I would keep all assets and income payments in a US bank.

It’s widely reported that if you live in Colombia more than about 180 days a year -- the maximum time allowed with a tourist stamp and non-immigrant visa extension -- you are liable to pay COL taxes on income.  So far as I know, that rule doesn’t kick in after Year 5 ... that’s for any year.  There have been reports on the Internet that the five-year rule was eliminated in 2013.

Common sense tells one that if you’re using Social Security income and/or a foreign-based-company pension as a basis for a residency visa or temporary visa, the Colombian government will know about it and can collect taxes on it.

Check with an attorney or an accountant in this country -- not so much us laymen on this forum -- for the ins and outs of COL taxation as related to your situation.

cccmedia from Pereira, Colombia

cccmedia is mostly right...especially the part about consulting an in-country attorney or tax professional, and even then be prepared to get perhaps several different answers.

Here it is straight from the horse's mouth DIAN although often the websites are not always updated to keep up with the latest developments - scroll down to number 7:

http://www.dian.gov.co/dian/12sobred.ns … entesrenta

This says, as cccmedia said, that after 5 years' residency you may also be obligated to pay Colombia income tax on foreign income.

But this site here, says that by the law cited (Ley 1607 del 2012), a foreigner is considered a resident for tax purposes if that person spends at least 183 days in-country in any 365 day period, with no mention of any 5-year "grace" period:

http://www.comunidadcontable.com/BancoC … asp?Miga=1

And another site that says the same thing about 183+ days, no 5 year grace period:

http://www.finanzaspersonales.com.co/im … mbia/54109

Also be aware that yet another "reforma tributaria" (tax reform) is being proposed and discussed but not yet finalized, as Colombia is pinched by falling oil revenues and squeezed by big spending plans that they can't possibly meet without getting blood from the turnips, including the foreign turnips or maybe they are cash cows...

You are correct that Colombia and the USA do not have any treaty about double-taxation yet - but they do already have in place information sharing agreements so Colombia can and will know your USA income if you reside in Colombia, as well as they want to know when any of their citizens make money in the USA so it can be taxed.

So before you jump to retire in Colombia it would be wise to have an extended visit (but less than 183 days) and do some serious talking with professionals there about your particular tax situation.  From the sound of it you will have plenty of income to lead an upper-class lifestyle but Colombian taxes for high-income residents (that's you) start at lower levels and with higher rates than in the USA.

Thank you for the information.  Any idea how I find a reputable accountant in Medellin?  Im guessing  that accountants in the USA do not know this type of information.  The one I use does not,
      Im thinking maybe an immigration attorney here in the USA could advise me on this.

USA-based professionals rarely get involved in personal tax issues for overseas Expats, unless it’s estate planning for the wealthy.

If you decide to move to Medellín, you’ll have time to network in the Gringo community and the established community to get a recommendation for a Colombian accountant.  Expat taxes for a USA federal filing are not due until June 15th of the subsequent calendar year, and the filing date can easily be extended till October of the latter year.

cccmedia, from Salento, Quindío, Colombia

Please be aware that the present tax reform on hold will only cover the period for present year 2016. Next year the expenditure of the government will increase extremly (postwar gifts to FARC). the government will need a lot more money and nobody knows from where to get it. In an international ranking of corporate taxes Colombia is on post 4. (without considering the present tax reform on hold).
Better look for another place to spent your money.

Like OP, I am considering to retire in Colombia. Like OP, I will have various sources of incomes: SS, pension, 401k and IRAs (withdrawn monthly), and Stocks/Mutual Fund.


Why is it so hard to find someone with similar situation give a somewhat an idea (no need to be specific) on which portion/part of the income is taxable by the Colombian government.

What is considered income by the Colombian Tax Agency? I can understand that SS and pension payment can be considered as new moneys. 401k and IRA funds were earned way before considering retiring to Colombia (and US will definitely tax those).

Mutual fund and Stock investments were done with post tax earnings. I will only pay US tax on the gain.   would Colombia consider taxing the gain or the total value? If they tax the gain/profit, they have to start the clock from the date I become a resident, do they?

Anyway, It looks like the tax issue is a source of "stress". As a future retiree, I will be trying to avoid as much stress as possible.

I'm not a tax specialist in any country but I think it's safe to say that for a tax resident, DIAN will consider as taxable income any monies that become available to you in the tax period, that you can spend.  They don't care what the source is but they do have information sharing agreements in place with the US and other countries so theoretically they can know your reportable income that you filed with the IRS.   You may be able to deduct US taxes paid.

I hope someone can give you some names of attorneys or tax preparers - I would not rely on information given on any forum unless you can verify it with DIAN or another competent and knowledgable source.

akabo :

I am considering to retire in Colombia. Like OP, I will have various sources of incomes: SS, pension, 401k and IRAs (withdrawn monthly), and Stocks/Mutual Fund.

Anyway, It looks like the tax issue is a source of "stress". As a future retiree, I will be trying to avoid as much stress as possible.

OK, Akabo, reduced stress is the goal in your tax and residency planning.

In your case, your stress-reduced choice about retiring in Colombia or elsewhere may depend on the size of your tax obligation in Colombia once Uncle Sam has taken his cut of your annual income.  I’ll explain.

Based on your post, you could be a relatively high-income guy -- meaning Colombia could claim about 30 percent of your U.S. income based on the current fancy “marginal” or graduated tax chart that COL uses.  Additionally, Colombia may impose a tax on you based on 3 percent of your assets.

If your envisioned U.S. tax rate is at least 20 percent overall in retirement, then it may be well worth it to you to move to Colombia year-round, since you can deduct your IRS payment from your COL obligation .. making your COL tax obligation small.

Alternatively, if you expect to pay minimal U.S. tax, consider staying inside Colombia fewer than 183 days a year .. so that you avoid being considered a COL tax resident.

Here in Ecuador where I have my principal residence, I pay no federal taxes to either the U.S. or Ecuador.  A tax-favorable country such as Ecuador might be part of a solution for you.  Or consider a snow-bird life in which you spend half the year in a climate-favorable place in the U.S. and the other half in Colombia.

In any case, keep these three things in mind....

1.  Some types of income may be taxable by Colombia that you would not be taxed for in the U.S.  One example is gains in a retirement investment vehicle such as an IRA, possibly including monthly withdrawals up to an IRS-specified limit.

2.  If you decide on -- or are on the fence about -- Colombia, have a tax professional there give you a tax opinion based on your envisioned retirement income. 

3.  The COL tax rules are changing, and almost certainly not in Expats' favor. 

cccmedia in Quito

CCCmedia is correct.  Someone I know in the USA has an American friend that lives in Medellin.  He is retired from the USA, but does have a job in Medellin.   That friend contacted an accountant in Medellin that prepares his taxes.  The accountant emailed me with an explanation.  Since Im not fluent in Spanish anymore, I had a Dominican friend here in the USA read the response for me.
       My friend basically told me most of the same things that CCCmedia is saying.  Percentages and all.  My friend told me the tax law in Colombia, from what the accountant explained, does not seem too easy to understand. But basically the accountant did say that approx. 25 to 33 percent of income could be taxed for an expat resident.

CCmedia may not pays taxes in Ecuador but, as far as I understand the tax information I have read some time ago, foreigners are also taxable in Ecuador with their wealth out side Ecuador if they overcome the 6 months period of stay in the country. The point is he is not paying taxes because the tax authority is not asking him to do so. The same happens in Thailand.

When it comes to your desired residency in Colombia you should  wait for at least 6 month or more until the present peace talks with the FARC are concluded und a following violent reaction is not longer to expect. You may also check whether some of the suggested changes by the oppostion to peace accord will be applied, thus to avoid to find yourself in a situation where the FARC may try to overtake the power in the country.

Whilst in Ecador,  Thailand and some other countries the tax authorities are applying a relaxed attitud to the tax obligations of foreigners the Colombian goverment needs urgently income to cover for both, the  lavish handling of taxpayers funds and to cover the the future costs for the peace pact with the FARC rebels.

epsacori :

CCmedia may not pays taxes in Ecuador but, as far as I understand the tax information I have read some time ago, foreigners are also taxable in Ecuador with their wealth out side Ecuador if they overcome the 6 months period of stay in the country. The point is he is not paying taxes because the tax authority is not asking him to do so. The same happens in Thailand.

Ecuador is listed as one of the nations that taxes foreign incomes of legal residents. Around here, in the Americas, the countries that do not tax your foreign incomes are: Belize, Panama, Costa-Rica, Guatemala, and Nicaragua.

I currently live in NJ. I will move south for sure. But, why stop at Florida? Why not something different?

Since I am not looking forward to being double-taxed, I will focus more on the countries listed above.

Thank you all for making it clear that double-taxing is kind of inescapable in Colombia.

akabo :

Thank you all for making it clear that double-taxing is kind of inescapable in Colombia.

Not what I said or implied for all cases.   

USA citizens who pay substantial income tax to the U.S. government may pay little or no tax while residing in Colombia due to the relevant deduction.

cccmedia

cccmedia :
akabo :

Thank you all for making it clear that double-taxing is kind of inescapable in Colombia.

Not what I said or implied. 

USA citizens who pay substantial income tax to the U.S. government may pay little or no tax while residing in Colombia due to the relevant deduction.

cccmedia

@cccmedia it is not what you said. I've been reading conflicting information on this subject. I was hoping to put it to rest (with respect to my planning) by getting some info from someone who actually filed US and Colombian taxes. I do get your point, that is, it may not be that bad, but I still have to go through the motion of declaring all investments, providing all relevant papers, etc ... Thanks.

akabo,  when you file your US taxes or have a question about them do you go to an internet forum and ask strangers and accept whatever they tell you, or do you go to a US tax professional?   Just asking.

OsageArcher :

akabo,  when you file your US taxes or have a question about them do you go to an internet forum and ask strangers and accept whatever they tell you, or do you go to a US tax professional?   Just asking.

@OsageArcher]akabo, I have not been in this situation before. But I do see your point, that is, don't trust everything you read on the internet. I agree completely. Having said that, I am not going to file tax in Colombia, I may may never even go there. All I am doing is gathering information for planning purposes. I have gathered so far:
         1- Colombia taxes foreign investments of Legal Residents (that's a fact)
         2- How much? It depends on the individual. Best case scenario: zero with the help of a tax Pro. Normally you will pay some taxes.

For me that's good information. It will help in my search for an oversea retirement location.

Thanks.

akabo :
epsacori :

CCmedia may not pays taxes in Ecuador but, as far as I understand the tax information I have read some time ago, foreigners are also taxable in Ecuador with their wealth out side Ecuador if they overcome the 6 months period of stay in the country. The point is he is not paying taxes because the tax authority is not asking him to do so. The same happens in Thailand.

Ecuador is listed as one of the nations that taxes foreign incomes of legal residents. Around here, in the Americas, the countries that do not tax your foreign incomes are: Belize, Panama, Costa-Rica, Guatemala, and Nicaragua.

I currently live in NJ. I will move south for sure. But, why stop at Florida? Why not something different?

Since I am not looking forward to being double-taxed, I will focus more on the countries listed above.

Thank you all for making it clear that double-taxing is kind of inescapable in Colombia.

On this thread, Epsacori and Akabo both asserted that they saw information that foreign residents living here in Ecuador owe taxes on income derived outside of Ecuador.

In both posts, these assertions are unattributed and thus questionable.

The information that Epsacori remembered from an unidentified source -- that foreign income is taxed for anyone living in the country more than about six months in one year -- applies to Colombia, but not to Ecuador.

Akabo claimed Ecuador is on a list of countries that tax non-Ecuador income .. but Akabo did not provide a link to this supposed list nor name the source of any such list.

----------

”Unless you are running a business in Ecuador, your tax liability as a foreign resident is very low.  If you live in Ecuador but obtain your income from overseas sources, there is no reporting requirement....

”Foreign residents of Ecuador are taxed on their Ecuador-sourced income but not on income earned outside of the country.”

-- internationalliving.com/countries/ecuador/taxes


Posted by cccmedia, resident of Quito, Ecuador

cccmedia :

On this thread, Epsacori and Akabo both asserted that they saw information that foreign residents living here in Ecuador owe taxes on income derived outside of Ecuador.

In both posts, these assertions are unattributed and thus questionable.

The information that Epsacori remembered from an unidentified source -- that foreign income is taxed for anyone living in the country more than about six months in one year -- applies to Colombia, but not to Ecuador.

Akabo claimed Ecuador is on a list of countries that tax non-Ecuador income .. but Akabo did not provide a link to this supposed list nor name the source of any such list.

----------

”Unless you are running a business in Ecuador, your tax liability as a foreign resident is very low.  If you live in Ecuador but obtain your income from overseas sources, there is no reporting requirement....

”Foreign residents of Ecuador are taxed on their Ecuador-sourced income but not on income earned outside of the country.”

-- internationalliving.com/countries/ecuador/taxes


Posted by cccmedia, resident of Quito, Ecuador

@cccmedia,

Here is the link of the table that I got the information. It may not be up-to-date.
https://en.wikipedia.org/wiki/International_taxation

Thanks.

Taxes on individuals:
==================
Income tax rates:                           Progressive to 33% for residents; 33% for nonresidents
Alternative minimum tax:             Progressive to 27%; see also net wealth tax below
Capital gains tax rates:                  0%/10%
Basis:                                                Worldwide income
Double taxation relief:                   Yes
Tax year:                                          Calendar year
Return due date:                            Deadline set annually, varies depending on tax ID number

Withholding tax
      − Dividends:                               0%/20%/33% (domestic individuals); 0%/33% (foreign individuals)
      − Interest:                                   7% (resident individuals); 14%/33% (nonresident individuals)
      − Royalties:                                 3.5% (domestic individuals); 26.4% (software license payments to
                                                           foreign individuals)/33% (other payments to foreign individuals)

Net wealth tax:                                Presumptive minimum income for income tax purposes is based on
                                                            net worth; temporary wealth tax of 0.125%-1.5% also may apply

Social security:                                 8%, withheld by the employer

Inheritance/gift tax:                          No (but gifts are treated as capital gains)
Real estate tax:                                 Varies
VAT:                                                   16% (standard rate)


Residence
=========
An individual is considered a Colombian resident for tax purposes if he or she is present in
Colombia for more than 183 days during a consecutive 365-day period.

Taxable income and rates
=====================
A resident individual is taxed on worldwide income; a nonresident is taxed only on Colombia-
source income. A foreign resident individual will be taxed on worldwide income as from the first
year he or she resides in the country.

A presumptive minimum income is calculated annually on the taxpayer's net worth held in the year
immediately preceding the taxable year at issue. Certain assets may be excluded from this
calculation, such as shares in Colombian companies and the individual's residence (up to a certain
maximum value).

Individuals must calculate their income according to the ordinary rules (including the rules on
presumptive income), as well as under a National Minimum Alternative Tax (IMAN) that contains
adjusted tax rate tables that provide for alternative rates ranging from 0% to 27% and a SimpleMinimum Alternative Tax (IMAS) that will allow certain taxpayers to prepare their tax returns
electronically.

Taxable income
=============
Most income is subject to tax, including employment income, business income, investment income
and capital gains; 25% of all labor income is exempt.

Deductions and reliefs
===================
Colombia provides deductions and allowances for health expenditure and for the purchase of a
residence, including related interest costs up to a certain amount. Deductible mortgage interest is
limited. A taxpayer may deduct charitable donations, provided certain requirements are met.

Rates
=====
Taxable income ranges are based on the UVT (tax value unit) and are 0% for UVT 0 to UVT 1,090;
19% for UVT 1,091 to UVT 1,700; 28% for UVT 1,701 to UVT 4,100; and 33% for UVT 4,101 and
above.

Dividends are taxable if the profits out of which they are distributed were not taxed. A 20% rate
applies where a resident individual taxpayer is required to file a tax return (33% if the individual is
not required to file a return).

The withholding tax on interest paid to a resident individual is 7%.

Capital gains (e.g. inheritances, gifts and proceeds from the sale of real estate) are subject to tax
at a rate of 10%. However, gains derived from the sale of shares through a stock exchange are
exempt, provided the shares sold do not represent more than 10% of the total shares of the
Colombian company that issued the shares.

akabo :

Taxable income and rates....

Capital gains (e.g. inheritances, gifts and proceeds from the sale of real estate) are subject to tax at a rate of 10%.

The following response was posted in November: 

According to three Internet sites I visited, including Deloitte and PwC, sites at which COL tax information is provided .. cash inheritances are not subject to any tax.

If the inheritance includes real estate, yes, Colombia will tax any capital gains -- for instance, if the property is sold for a profit.

cccmedia

----------

Revised opinion, posted January 9, 2017:

I have done further research on multiple websites that dispense COL tax information .. and it has changed my understanding of COL taxes on inheritance income.

I now agree with akabo's statement that inheritances, even if all cash, are subject to ten percent in taxes, being considered capital gains and extraordinary income.

It's a confusing point because there evidently is no specific tax on cash inheritances in Colombia, and yet La República considers them capital gains, which category is taxed at ten percent.

cccmedia

Thanks for providing this long list about individual taxation in Colombia, Akabo.

I don’t see this list at any Wikipedia page, including the one you linked to.

Where did you find this list?

cccmedia

Still to be deciphered from the long list Akabo provided....

1.  Alternative tax:  what the heck is that all about?

2.  Wealth tax:  what is the minimum assets-value in pesos and (approximate) dollars for COL to impose the wealth tax on ‘wealthy' individuals?  Is the wealth tax imposed on assets outside of Colombia in addition to inside-COL holdings?

cccmedia

cccmedia :
akabo :

Taxable income and rates....

Capital gains (e.g. inheritances, gifts and proceeds from the sale of real estate) are subject to tax at a rate of 10%.

According to three Internet sites I visited, including Deloitte and PwC, sites at which COL tax information is provided .. cash inheritances are not subject to any tax.

If the inheritance includes real estate, yes, Colombia will tax any capital gains -- for instance, if the property is sold for a profit.

cccmedia

I got the information from the Deloitte site. I cut and pasted here, maybe OP or other visitors might find the info useful.

I really don´t have the time to read all the posts but one very important thing is this, as everybody has written you´re obligated to file a tax return if you stay more than 180 days within a calendar year BUT your won´t have your US income taxed if you have a good accountant who knows how to file the tax return correctly.
Let me explain, the colombian Tax Authority accepts any payments you made when you filed your US tax return as a valid tax payment for Colombia, all you have to do is declare the amount paid in the US in the specific part of the colombian tax return form.
So, find a good colombian accountant who knows how to do that.

realtycol :

you´re obligated to file a tax return if you stay more than 180 days within a calendar year.

The correct number is 183 days before becoming a so-called tax resident of Colombia.

180 days is the total time you may stay in Colombia during a year based on tourist stamp and tourist visa extension(s).

Osage Archer correctly stated the 183-days tax restriction in Report 3 of this thread above.  I earlier stated “about 180 days” in an earlier post, and am using this opportunity to clarify that the 183 figure is correct.

cccmedia

m07801 :

Any idea how I find a reputable accountant in Medellin?

Since Realty Col, a Colombia citizen in Medellin, just emphasized the need to get a qualified COL accountant to obtain the paid-U.S. taxes deduction, perhaps Realty Col could provide a recommendation and contact information for such an accountant in Colombia.

cccmedia

OsageArcher :

Here it is straight from the horse's mouth DIAN although often the websites are not always updated to keep up with the latest developments - scroll down to number 7:

http://www.dian.gov.co/dian/12sobred.ns … entesrenta
This says, as cccmedia said, that after 5 years' residency you may also be obligated to pay Colombia income tax on foreign income.

But this site here, says that by the law cited (Ley 1607 del 2012), a foreigner is considered a resident for tax purposes if that person spends at least 183 days in-country in any 365 day period, with no mention of any 5-year "grace" period:

http://www.comunidadcontable.com/BancoC … asp?Miga=1

And another site that says the same thing about 183+ days, no 5 year grace period:

http://www.finanzaspersonales.com.co/im … mbia/54109

My position was misrepresented in this case, as I believe the five-year rule was abolished in 2013 and I mentioned in Report 2 of this thread that this change had been widely reported.

The first link above to a DIAN page is out of date.  It's from seven years before the five-year rule was nixed.  The date of the latest updating or última actualización of that DIAN page is listed at the bottom of the DIAN page as January 24, 2006.

The end of the five-year rule means that Expats living in COL for more than 183 days out of any 365 consecutive days are liable for paying Colombia taxes on their worldwide income on the graduated scale of up to 30-plus percent, starting with Year 1 of their ‘tax residency,’ with no five-year grace period. 

Naturally, U.S.-paid taxes or other legal deductions/exemptions such as inheritance cash-income may be deducted/excluded from one’s COL tax obligation.

cccmedia

A few years back, I sold some very old stocks at a loss. I could not find any records of the initial purchase, the original trading company had been merged with the current one, and did not have any record to calculate the cost basis. When I filed taxes that year, I was too lazy to do more research, I just did not report it. It was a mistake, IRS knew about it, and computed as gain, and sent a very strong letter with the amount of money I owed. I had to redo the tax and reported it correctly, and IRS ended up owing me money.

The point of the story is IRS knows everything and is all-powerful in the US. This leads to these questions: how intrusive is the Colombia tax Agency on US citizen asset? If you fail to report some incomes, how will Colombia find out? If Colombia does find out, how can they force you to pay?

akabo :

The point of the story is IRS knows everything and is all-powerful in the US. This leads to these questions: how intrusive is the Colombia tax Agency on US citizen asset? If you fail to report some incomes, how will Colombia find out? If Colombia does find out, how can they force you to pay?

Moral of the story:  in the Age of IT, don’t presume a taxing authority will be less than omniscient, no matter how inefficient or tolerant it used to be.

Do presume that governments have potent weapons to use on tax evaders:  collection agents, fines that increase over time, incarceration, deportation.

Use a qualified tax adviser.  Then do the right thing.

cccmedia

cccmedia :
akabo :

The point of the story is IRS knows everything and is all-powerful in the US. This leads to these questions: how intrusive is the Colombia tax Agency on US citizen asset? If you fail to report some incomes, how will Colombia find out? If Colombia does find out, how can they force you to pay?

Moral of the story:  in the Age of IT, don’t presume a taxing authority will be less than omniscient, no matter how inefficient or tolerant it used to be.

Do presume that governments have potent weapons to use on tax evaders:  collection agents, fines that increase over time, incarceration, deportation.

Use a qualified tax adviser.  Then do the right thing.

cccmedia

Hello cccmedia,

I was hoping for something just a bit more specific. We are not discussing "moral issue" here, we all know it is bad if you don't pay your taxes, and you will be punished accordingly.

For example, I might be a good driver, but will never drive in a country where the penalty if you get caught without a driver license is "jail". Sooner or later, statistically speaking, you will forget your driver's license, or forget to renew it on time.

By the way, tax adviser is as good as the information you provide. Let's go back to my previous story. Let's assume I failed to report this income as loss while filing taxes in Colombia. I paid the taxes that I owed, and left Colombia to another country. Sometime later, Colombia find about this unreported transaction. Remember, I just did not report my loss. What would Colombia typically do in such case? Would they send me a nice letter to my Colombian address to pay the correct amount owed? Would they also send a letter to my US address (if they have it on file)? I am nowhere to be found, would they use State Department to freeze my US bank account (I am not a Colombian citizen)? Would they use IRS to act on their behalf? Would they send me directly to jail next time I cross Colombian border? I think these questions are more important than knowing how much deduction I can claim here or there.

In conclusion, we are all human, we make mistakes. We can get in a lot of troubles by not knowing the consequences of a casual act. Read the fine prints before signing up for something.

There are too many variables involved to predict what the Colombian government would do to someone who has unpaid taxes.

These variables include... the amount owed, interpretation of longstanding tax laws, changes in the laws, the quality of your accountant or attorney, discretion by the taxing authorities, how difficult it would be to find someone who is outside the country, the ease or difficulty of attaching relevant assets .. and how lucky the debtor might be on a day when his or her case was addressed by a particular bureaucrat.

That is a partial list.

cccmedia

cccmedia :

There are too many variables involved to predict what the Colombian government would do to someone who has unpaid taxes.

These variables include... the amount owed, longstanding tax laws, changes in the laws, the quality of your accountant or attorney, discretion by the taxing authorities, how difficult it would be to find and penalize someone who is outside the country, the ease or difficulty of attaching relevant assets .. and how lucky the debtor might be on a day when his/her case was addressed by a particular bureaucrat.

That is a partial list.

cccmedia

@cccmedia,

Thanks! I get it.

Hi there! Can I please have some information about what happen when the money isn't considered income to U.S will it be to Colombia? I am a disabled Veteran and I receive my benefit from the Department of Veterans here in United States, is disability pay not income. Is non taxed in here so why it would be in Colombia if I am disabled? Also, I receive Social Security benefits but is Social Security disability pay so would it be taxed?

Where can I found the right info about this? Thanks!

Basically as a foreigner in Colombia, if you are considered a resident for tax purposes and if it's money you receive during the year that can be spent, it's going to be considered as income.

Colombia has different laws than the US.  Just because it isn't taxed in the US you cannot expect Colombia not to tax it.

Remember Colombia is a place where the minimum wage is now set at about $230 USD/month, and that barely half of the people there are even covered by that minimum wage in "formal" employment - the rest have to get by on informal employment which often pays even less than that.  So as a rule they are not too concerned about the tax problems foreigners have who receive many times the minimum wage.

These links may help:

http://www.gerencie.com/tratamiento-de- … ombia.html

http://www.dian.gov.co/dian/12sobred.ns … entesrenta

This last link to DIAN which is the governing body on taxes in Colombia also has contact information:

http://www.dian.gov.co/

You'd be well advised to contact them directly and ask your questions, as well as consult with a Colombian tax attorney who knows the laws about foreigners paying taxes in Colombia.

any1973 :

Where can I found the right info about this?

Brother Archer is correct on all counts.

For a detailed, English-language report on Taxes (and Investment) in COL, go to the relevant Deloitte accounting site.

Google:  colombia taxes 2016 deloitte

-- cccmedia from La Zona Cafetera, Colombia

I have revised my opinion on inheritance taxes and posted the revision on Report 21 above.

Based on further research, I now agree with Akabo that Colombia taxes cash inheritance income as capital gains at a ten percent rate.

cccmedia from La Zona Cafetera

OsageArcher :

Just because it isn't taxed in the US you cannot expect Colombia not to tax it....

consult with a Colombian tax attorney who knows the laws about foreigners paying taxes in Colombia.

I believed the first statement above .. until today.

This week, I was offered a gratis tax-opinion via the head of an international law firm with office in Medellín.  His firm is also assisting me with a TP visa.

Seeking the tax opinion, I explained that in my most recent IRS (U.S.) filing, I paid no taxes (based on my U.S. accountant’s work -- all income was U.S. income).

I asked:  What would be my tax obligation to Colombia if receiving income from the same U.S. sources .. if / when I establish tax residency in COL?

The law firm put the question to an accountant and came back to me today with the following tax opinion....

If I don’t pay tax to the U.S. on my U.S. income, I don’t owe tax to Colombia on that income.

This surprised me because a chunk of the income is from an inheritance .. and I believed that all inheritances received by COL tax residents are taxed by Colombia as capital gains at ten percent.  I had made known to the Medellín attorney that I had inheritance income.

cccmedia in La Zona Cafetera

Hi,

I am right there with you. I am an Army Vet living off of VA compensation. It is not taxed in the USA but I am not sure how that works here.

Guillermo

cccmedia :
OsageArcher :

Just because it isn't taxed in the US you cannot expect Colombia not to tax it....

consult with a Colombian tax attorney who knows the laws about foreigners paying taxes in Colombia.

I believed the first statement above .. until today.

This week, I was offered a gratis tax-opinion via the head of an international law firm with office in Medellín.  His firm is also assisting me with a TP visa.

Seeking the tax opinion, I explained that in my most recent IRS (U.S.) filing, I paid no taxes (based on my U.S. accountant’s work -- all income was U.S. income).

I asked:  What would be my tax obligation to Colombia if receiving income from the same U.S. sources .. if / when I establish tax residency in COL?

The law firm put the question to an accountant and came back to me today with the following tax opinion....

If I don’t pay tax to the U.S. on my U.S. income, I don’t owe tax to Colombia on that income.

This surprised me because a chunk of the income is from an inheritance .. and I believed that all inheritances received by COL tax residents are taxed by Colombia as capital gains at ten percent.  I had made known to the Medellín attorney that I had inheritance income.

cccmedia in La Zona Cafetera

Do you have that accountants information? I receive VA Compensation and it's not taxable in the US, I am hoping it's not here either.

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