Taxation in Colombia

The value-added tax (VAT) is the main indirect tax. This rose 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.

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.

This tax requires the annual payment of 1% of the total patrimony of people with patrimony estimated over 5 billion pesos (about 1 million USD).

• 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 30%.[3]
• Individuals: Colombian citizens and foreign nationals who have lived in Colombia for more than 183 days total in any 365 day period not necessarily a calendar year, are considered to be tax residents (residentes fiscales) and 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 = $33.156 COP for 2018.[4] See UVT.

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%

In Colombia the natural persons who must present income declaration are classified on the next table.[6]

Requisites	Amount in UVT
Natural person with gross asset value	>4500
gross revenue incomes upper 3.868.166 COP /monthly or Earnings Consumes and purchases If consumes through credit card If cumulative value of banking deposits, wire transfer or financial investment	>1400

For 2019 are:

• Natural person with gross asset value upper $149.202.000 COP. (4500 UVT)
• Natural persons with gross revenue upper $46.418.000 COP per year. (1400 UVT)
• Natural person with incomes upper 3.868.166 COP /monthly (Earnings $46.418.000 per year). (1400 UVT)
• Consumes and purchases upper $46.418.000 (1400 UVT)
• If consumes through credit card exceeds $46.418.000 (1400 UVT)
• If cumulative value of banking deposits, wire transfer or financial investment, exceeds $46.418.000 COP. (1400 UVT)

See UVT.

Both the employer and the employee are subject to monthly payroll taxes from the employee's gross salary, as follows:[7]

• Employer:
  • Health plan - 8.5%
  • Occupational risk - 0.348% - 8.7%
  • ICFB (Instituto Colombiano de Bienestar Familiar; Family Welfare) - 3%
  • CAJA (Cajas de compensación familiar; Family compensation funds) - 4%
  • SENA (National Occupational Training Service) - 2%
  • Pension fund - 12%
  • Vacation - 4.17%
• Employee:
  • Health plan - 4%
  • Pension fund - 4%