The taxation system in Colombia

Colombia's tax entity is the National Taxes and Customs Direction (DIAN). The fiscal year runs from 1st January until 31st December and tax returns are submitted in August according to a schedule of dates based on resident ID number.

Income Tax

Expats who reside in Colombia for less than six months (183 days), including departure and arrival days, are considered non-residents and taxed solely on income earned in Colombia. Non-residents pay a flat tax of 35% regardless of income level.

If residing in Colombia more than 183 days, residents are taxed on all income, regardless of country of origin. Income tax rates vary based on individual income.

Businesses operating in Colombia are subject to a corporate income tax of 25% regardless of were the business owner resides.

Other national taxes

• Value added tax (VAT): Sales of imported goods and services provided are taxed at 19%.
• Income tax for equality (CREE): A temporary special tax levied for taxpayers with profits above 800 million COP. The rate is 6% in 2017 and will lower to 4% in 2018.
• Financial transactions tax: Each withdrawal from a checking, savings, or deposit account is subject to a 0,4% tax. This also applies to cashiers checks.
• Property tax: These are municipal taxes and will vary based on where a property is located. Property tax rates range from 0,3% - 3,3%.

Double Taxation

Most expats will be taxed by both Colombia and their passport country on Colombian earned income. Those subject to double taxation should check with their home country's tax entity to see if they are able to offset taxes on money earned in Colombia. Colombia currently has double taxation exemption agreements with Bolivia, Canada, Chile, Ecuador, India, Mexico, Peru, Portugal, South Korea, Spain, and Switzerland.

Useful Links:

National Taxes and Customs Direction (DIAN)
English summary of Colombian income tax regulations