Taxation in Colombia

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See Government of Colombia for a broader perspective of Colombian government.

Taxation in Colombia is determined by the Congress of Colombia, every Department Assembly and every City Council, which determine what kind of taxes can be levied and which rates can be applied. The country inherited a harsh and diffused taxation policy from the Spanish Empire characterized by a heavy reliance on customs duties.

National taxes[edit]

National taxes are administered by the National Taxes and Customs Direction (DIAN).[1] Some of these taxes include:

VAT

The value-added tax (VAT) is the main indirect tax. Apparently, this is rising to 19 percent in 2017[2]; up to the end of 2016 the tax was 16 percent of the price of merchandise, goods and services with some exceptions: public transportation, water supply and sanitation and the transportation of natural gas and hydrocarbons. The DIAN recognizes two separate categories (regimenes) of VAT: common and simplified. The first refers to businesses with estimated patrimony over 68 million Colombian pesos (about 34,000 USD), and the second refers to those with patrimony less than that. Although both are obligated to pay the same percentage, the simplified taxpayers are not obligated to conduct separate bookkeeping for the VAT or to generate invoices.

Stamp tax

The stamp tax (Spanish: impuesto de timbre) is a tax on the expedition of an official document (or on the validity of private documents), such as a contract or contractual modification.

Financial transactions tax

A 0.4% tax rate is imposed on all financial transactions, including withdraw money from ATM, promissory notes, wire transfers, internet banking, bank drafts and bank checks, money on term deposit, overdrafts, installment loans, securities underwriting commitments and other forms of off-balance sheet exposures, safekeeping of documents and other items in safe deposit boxes, currency exchange or unit trusts.

Patrimony tax

This tax requires the annual payment of 0.3% of the total patrimony of people with patrimony estimated over 3 billion pesos (about 1 million USD).

Income tax
  • Corporations: Income tax (Spanish: Impuesto a la renta y complementarios) must be paid by all local and foreign corporations operating in Colombia, who are subject to a corporate tax of 25%.[3]
  • Individuals: Colombian citizens and foreign nationals who have lived continuously in Colombia for a total of 183 days, are thereafter subject to individual Income tax based on a system of graduated marginal tax rates.

The table below shows the tax rate in units of UVT (Unidad de Valor Tributario), in which 1 UVT = $29,753 COP for 2016.[4]

Income Range in UVT[5] Tax Rate
0 to 1,400 0%
>1,400 to 1,700 19%
>1,700 to 4,100 28%
>4,100 33%

Payroll taxes[edit]

Both the employer and the employee are subject to monthly payroll taxes from the employee's gross salary, as follows:[6]

  • Employer:
    • Health plan - 8.5%
    • Occupational risk - 0.348% - 8.7%
    • ICFB (Instituto Colombiano de Bienestar Familiar; Family Welfare) - 3%
    • CAJA (banco caja social) - 4%
    • SENA (The National Service of Learning) - 2%
    • Pension fund - 12%
    • Vacation - 4.17%
  • Employee:
    • Health plan - 4%
    • Pension fund - 4%

Local taxes[edit]

This group of taxes includes:

  • Impuesto a ganadores de loterías: Tax on lottery winnings
  • Impuesto a loterías foráneas: Tax on 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 liquor
  • 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 on industrial or commercial establishments
  • Impuesto de avisos y tableros: Tax on advertising
  • Impuesto predial: Property Tax

References[edit]

  1. ^ DIAN National Tax and Customs Direction
  2. ^ "Tax Reform in Colombia 2017". auxadi (in Spanish). 2017-01-25. Retrieved 2017-02-01. 
  3. ^ Estatuto Tributario colombiano. Art. 240, Estatuto Tributario Nacional
  4. ^ "DIAN - Resolución 115, 6 November 2015: [1].
  5. ^ 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.
  6. ^ "Colombia - CountryPedia - Papaya Global". 

External links[edit]