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: … 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: … asp?Miga=1

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

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