Taxation in Colombia: Difference between revisions
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'''Taxation in Colombia''' is determined by the [[Congress of Colombia]], the [[Departments of Colombia]] Assemblies and the [[Municipalities of Colombia]] councils, which determine what kind of taxes can be levied and which rates can be applied. |
'''Taxation in Colombia''' is determined by the [[Congress of Colombia]], the [[Departments of Colombia]] Assemblies and the [[Municipalities of Colombia]] councils, which determine what kind of taxes can be levied and which rates can be applied. |
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[[Colombia]] inherited a harsh and diffused [[taxation]] policy from the [[Spanish Empire]], characterized by a |
[[Colombia]] inherited a harsh and diffused [[taxation]] policy from the [[Spanish Empire]], characterized by a heavy reliance on [[customs]], due to the relatively low capacity of local production of goods. |
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Both the national government local governments' budgets run significant [[deficit]]s. |
Both the national government local governments' budgets run significant [[deficit]]s. |
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Revision as of 20:58, 27 January 2011
 | This article may require copy editing for grammar, style, cohesion, tone, or spelling. (October 2010) |
- See Government of Colombia for a wider perspective of Colombian government.
| Part of a series on |
| Taxation |
|---|
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| An aspect of fiscal policy |
Taxation in Colombia is determined by the Congress of Colombia, the Departments of Colombia Assemblies and the Municipalities of Colombia councils, which determine what kind of taxes can be levied and which rates can be applied.
Colombia inherited a harsh and diffused taxation policy from the Spanish Empire, characterized by a heavy reliance on customs, due to the relatively low capacity of local production of goods.
Both the national government local governments' budgets run significant deficits.
National Taxes
National taxes are administered by the DIAN National Tax and Customs Direction. Some of these taxes include:
IVA
The Value-added tax (IVA) is a variant of the sales-tax. This tax charges 16% of the price of sale of all kind of merchandise, goods, and services, with some exceptions: the public transportation, the Water supply and sanitation, and the transportation of natural gas and hydrocarbons. The Dian recognizes two separated categories (regimenes) of IVA responsibles: The common and the simplified. The first refers to businesses with estimated patrimony over 68 million Colombian pesos (about 34,000 dollars), and the second refers to those with patrimony less than that. Although both are obligated to pay the same percentage, the simplified responsibles are not obligated to carry separated bookkeepings for the IVA or to generate sale bills.
Stamp tax
The stamp tax (Spanish: "impuesto de timbre") is a contribution over the expedition of any official document, and over the validity of private documents, as is the case of any kind of contract or contractual modifications.
Financial transactions tax
This is a tax that covers all the financial transactions including banknotes, promissory notes, processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means, bank drafts and bank cheques, money on term deposit, overdrafts, installment loans, documentary and standby letters of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures, safekeeping of documents and other items in safe deposit boxes, currency exchange, sale, distribution or brokerage, with or without advice, unit trusts and similar financial products. In 1998-99 the tax rate was 0.2%.[1]
Patrimony tax
This tax requires the annual payment of 0.3% of the total patrimony of those people with patrimony estimated over 3000 million pesos (about 1.5 million dollars). It is a temporary tax to help the military.
Income tax
Corporations: Income tax (Spanish: "Impuesto a la renta y complementarios") must be paid by all local and foreign corporations operating in Colombia. They are subject to a corporate tax of 33%. [2].
Individuals: Colombian citizens and foreign individuals who have lived continuously or cumulatively in Colombia, for a total of 5 years are thereafter subject to individual income tax based on a system of graduated marginal tax rates. See table below:
| Income. Range in UVT[3] | Tax Rate |
|---|---|
| 0 to 1090 | 0% |
| >1.090 to 1700 | 19% |
| >1.700 to 4100 | 28% |
| >4.100 | 33% |
Local order taxes
This group of taxes includes among others:
- Impuesto a ganadores de loterías: Tax on lottery winnings
- Impuesto a loterías foráneas: Tax to allow the sale of out-of-state lottery tickets
- Impuesto al consumo de cervezas, sifones y refajos: Tax on Beer
- Impuesto al consumo de licores, vinos, aperitivos y similares: Tax on Liquors
- Impuesto al consumo de cigarrillos: Tax on cigarettes
- Impuesto al consumo de gasolina: Tax on gasoline
- Degüello de ganado mayor: Tax on slaughterhouses
- Impuesto de registro: Tax to register (academic degrees, patents, names, etc.)
- Impuesto sobre vehículos automotores: Tax on automobiles
- Impuesto de industria y comercio: Tax to allow the opening of industrial or commercial establishments
- Impuesto de avisos y tableros: Tax on advertising
- Impuesto predial: Real estate tax.
References
- Taxes in Colombia Official Investment Portal
- DIAN official taxes services DIAN, Dirección Impuestos y Aduanas Nacionales
- ^ [www.banrep.gov.co/documentos/presentaciones-discursos/pdf/aso4eng.pdf "TOWARDS MULTIBANKING IN COLOMBIA: FROM 'PATCHWORK' TO FINANCIAL HOLDINGS"] (PDF). p. 7.
{{cite web}}: Check|url=value (help); Cite has empty unknown parameter:|1=(help) - ^ Estatuto Tributario colombiano. Art. 240
- ^ UVT means "Unidad de Valor Tributario" - Tax Value Unit. Instead of setting a range in colombian pesos, DIAN has a UVT value that is updated at least every year. As per 2010, one UVT is equal to COP $24.555