All You Need To Know About Taxes In Colombia, Not More Not Less
Tax structure can be important if you want to open a business in Colombia, or if you are a digital nomad and stay longer than 183 days in Colombia, or if you are a retiree and get a pension.
Who Needs To File Income Taxes In Colombia (2019)
You are a Colombian tax resident if you stay longer in Colombia than 183 days you have to file for tax. This also counts if you stay 183 days through the new year. It does not reset just because of the new year.
Even if you are a Colombian tax resident you are NOT, I repeat NOT obligated to file tax when ALL of the following requirements are met.
- 1. The total value of bank deposits (savings, financial investment, deposit) is less than:
1400 Colombian minimum wages – COP 47,978,000 (around USD 14,800)
- 2. The value of owned assets on the 31st of December is less than:
4500 Colombian minimum wages – COP 154,215,000 (around USD 45,000)
- 3. Your Gross Income is less than:
1400 Colombian minimum wages – COP 47,978,000 (around USD 14,800)
- 4. The total value of purchases and consumption in cash is less than:
1400 Colombian minimum wages – COP 47,978,000 (around USD 14,800)
- 5. Your Credit Card consumption is less than:
1400 Colombian minimum wages – COP 47,978,000 (around USD 14,800)
All figures for 2019 in the past the figures were even higher so most that are now 1400 Colombian minimum wages, were 2800 Colombian minimum wages.
When To File Colombian Income Tax?
The last two digits of your Colombian tax ID number (NIT) will tell in which month you have to file tax. The tax season normally is from August to Mid-October.
Tax For A Natural Person In Colombia In 2019
Colombia works with income brackets.
| Over (USD) | Below (USD) | Rate (%) | |
| 0 | 12,000 | 0 | |
| 12,000 | 18,000 | 19 | |
| 18,000 | 43,000 | 28 | |
| 43,000 | 92,000 | 33 | |
| 92,000 | 200,000 | 35 | |
| 200,000 | 330,000 | 37 | |
| 330,000 | and more | 39 |
(Numbers are rounded and can vary depending on exchange rate)
In 2018 the tax brackets were:
until USD 16,000 0%
after USD 16,000 19%
after USD 20,000 28%
after USD 48,000 33%
(Numbers are rounded and can vary depending on exchange rate)
Taxes For A Colombian SAS
Is 34% without brackets
Taxes For Capital Gains In Colombia
Depending on the amount of the capital gains it can be 0%, 5% or 10% max.
Is Foreign Social Security or A Foreign Pension Taxed?
Foreign social securities and foreign pensions are also taxed in Colombia. Although many people say the contrary. Technically they are taxed, practically–> It’s Colombia, there are 1001 different ways you can file your taxes.
Is Foreign Source of Income Taxed In Colombia?
Foreign source of income is also taxed in Colombia. Again, how people declare their taxes is a whole other story.
What’s Deductible?
There are a lot of positions you can deduct from taxes in Colombia, especially taxes you already have paid in your country. Some countries like Switzerland have double tax treaties.
Countries like the US, for example, do not. Still, some of the taxes you paid in the US can be deducted from the Colombian taxes.
What Else Is Deductible?
There are a million ways to deduct things from your taxes, like 25 percent of your labor salary, or your pension.
What You Really Have To Know
Believe us when we tell you, don’t go too much into detail with trying to understand the taxes in Colombia. There are just too many factors to consider. I worked on an Excel Sheet for two days to display my tax situation.
Then we went to our accountant with the Excel sheet just to find out that taxes here in Colombia are so complicated, that you better let your accountant handle that.
It’s not just that the laws and regulations are very complicated but the Gray zone of these laws is huge. So only a person who has advanced knowledge of taxes in Colombia AND practical experience can give you the best advice.
What You Really Have To Know Pt. 2
From our experience in the country, most of the expats in all kinds of positions and with all kinds of income don’t pay a lot of taxes.
A lot of expats pay less than USD 1000 a year. If you want a great accountant, contact us, we would love to recommend you a great accountant here in Medellin.
If you have a question about taxes in Colombia, we would love to help you out just contact us for information about your personal situation.
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