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Taxes on global income and global assets for Colombian Residents

Encanta Medellin. I have been in Laureles for several months. I WISH I could live here.  I am happy here and have all I ever dreamed of.

If you stay here for 184 days in any 12-month period for any reason and under any visa then you become a TAX RESIDENT. You must file a tax return in Colombia declaring all assets globally and pay an asset tax, a small percentage of global assets. This includes traditional and Roth IRAs. You must pay a tax on global income including Social Security benefits and IRA distributions. Further, it is presumed that you have a minimum income of 3% of your global assets, and you must pay a tax on that whether or not you actually had any income.

I think that Colombia does not want retirees lounging about in Cafe Revolucion. It is probably better for a young person with no money, no skills, no education, no prospects - the less the better. I love it here, but I'm surprised I'm not alone.

See you all again in six months.

SanMarcos :

If you stay here for 184 days in any 12-month period for any reason and under any visa then you become a TAX RESIDENT. You must file a tax return in Colombia declaring all assets globally and pay an asset tax, a small percentage of global assets. This includes traditional and Roth IRAs. You must pay a tax on global income including Social Security benefits and IRA distributions. Further, it is presumed that you have a minimum income of 3% of your global assets, and you must pay a tax on that whether or not you actually had any income.

According to my calculations from the Colombian tax chart, I would have to pay 33 percent of my worldwide income to Colombia for any 12-month period in which I was in-country for 184-plus days.

That might be in addition to the global-assets tax that San Marcos posted on.

  -- cccmedia, resident of Ecuador where I pay no income tax ..
     nor do I pay federal income tax to my country of citizenship, USA. 
     Posted from Medellín.

Thanks for your reply.

SanMarcos :

If you stay here for 184 days in any 12-month period for any reason and under any visa then you become a TAX RESIDENT. You must file a tax return in Colombia declaring all assets globally and pay an asset tax, a small percentage of global assets. This includes traditional and Roth IRAs. You must pay a tax on global income, including Social Security benefits and IRA distributions. Further, it is presumed that you have a minimum income of 3% of your global assets, and you must pay a tax on that whether or not you actually had any income.

Based on my further research on Internet sites, it appears there is a consensus...

With 184-plus days in Colombia inside any 12 months, you would be required to pay either the worldwide-income tax of up to 33 percent .. OR .. the 3-percent tax on assets -- whichever is greater.  You do not pay both.

cccmedia from Medellín

It is not a 3% tax on assets. It is presumed that you make 3% income on your assets, and you pay a tax on that income, which you cannot, of course obtain from a US bank. Also - there's no choice - you pay a smaller tax on your global assets.

It seems to me that, beyond the tax itself, Colombian authorities want5 too much information.

Any truth to the post that said tax-residents are exempt from the presumed-assets-income taxation provided that the assets total less in value that one billion pesos?  That amount could be $333,000 to $350,000 US depending on the floating COP-USD exchange.

cccmedia

http://www.medellinlawyer.com/colombia- … claration/

the untaxed asset limit is 127,256,000 pesos.

Hi! My husband and I run a successful advertising agency, serving to local and international clients based in Puerto Rico. Due to the critical political climate in the US (PR is a colony of the US), it's mounting debt and the crisis in PR (that just declared bankruptcy) we a have growing sense or urgency to relocate as soon as possible. Colombia is one of the destinations on our radar. I just posted a question regarding exactly this matter and how expats deal with it. It seems to me then that a permanent relocation is not possible, since I would be paying taxes both to the Us and Colombia?

atreyes5 :

Puerto Rico. Due to the critical political climate in the US (PR is a colony of the US), it's mounting debt and the crisis in PR (that just declared bankruptcy) we a have growing urgency to relocate as soon as possible....

It seems to me then that a permanent relocation is not possible, since I would be paying taxes both to the Us and Colombia?

Dear atreyes5,

Welcome to the Colombia forum.

This appears to be an excellent time to bail on Puerto Rico.  The island's filing for bankruptcy last week (on May 3, 2017) is evidence that things have spiraled downward .. and you-know-who has made it clear he won't lift a finger to make things any better.  (source: CNN Money.)

----

As for Colombia, you have been misinformed.

Colombia does not double-tax its tax residents.

Paid U.S. income taxes are fully deductible on Colombia tax filings.  Income taxes payable in Colombia are due in August or September of the following year, making this process relatively easy.

if you post here again:  where did you read that there is double taxation?  Do you plan to continue running your advertising agency from Colombia or wherever you land?

cccmedia in Medellín

http://taxsummaries.pwc.com/ID/Colombia … nal-income

As I have researched an expat's status in Colombia is determined by 2 factors; Whether or not a double-taxation agreement exists between Colombia and his "home" nation, and his "residential" status in Colombia. If no double taxation agreements exist, and if you have a full, permanent residential visa (After 5 years residence), then YOU WILL BE LIABLE for Colombian tax. I also read that to avoid this I cannot live there more than 6 months a year? If this is incorrect I would be very happy!  Yes, I do plan to continue serving my clients online, with the help of employees based in PR, and of course, explore the market in Medellin, which is the city that interests me the most. Am I on the right track?

This is the second time I have heard about the 6 month time limit and that the Colombian Government may start to tax us. I am retired we are on a fixed income for now.   I was going to get a Marriage Visa which is good for at least 2 years.  Also once you have been in Colombia with any form of visa for at least 3 years, I believe you can qualify for a 5 year visa.  I still return home to visit my father every 3 months or so and this helps me avoid the 6 month problem.  I am considering not filing for a Marriage Visa as I believe this will trigger the tax requirement regardless if I leave every 3 months.    So I am laying low for now.  The other day, my wife and I had business in Paraguay and the reset my 90 clock without needing a Visa.  So perhaps even a quick trip to Equador could reset your 90 clock at low cost.  Just some thoughts.

Mark Leon :

once you have been in Colombia with any form of visa for at least 3 years, I believe you can qualify for a 5 year visa.

Mark is misinformed on the above point.

Expats living in Colombia on renewable one-year temporary visas do not typically qualify to apply for the five-year residency visa in three years' time.

They need to renew their visas for a continuous total of at least five years in-country .. before obtaining the residency visa is possible.

It is widely reported by Expats that five renewals will normally be necessary because of the difficulty of 'threading the needle' to get exactly five full years via four renewals. 

cccmedia in Medellín, TP-7 visa holder

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