Taxation in Colombia



:''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 A municipal council is the legislative body of a municipality or local government area. Depending on the location and classification of the municipality it may be known as a city council, town council, town board, community council, rural counci ...
, 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 The Spanish Empire ( es, link=no, Imperio español), also known as the Hispanic Monarchy ( es, link=no, Monarquía Hispánica) or the Catholic Monarchy ( es, link=no, Monarquía Católica) was a colonial empire governed by Spain and its predec ...
characterized by a heavy reliance on
customs Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country. Traditionally, customs h ...

National taxes

National taxes are administered by the
National Directorate of Taxes and Customs National may refer to: Common uses * Nation or country ** Nationality – a ''national'' is a person who is subject to a nation, regardless of whether the person has full rights as a citizen Places in the United States * National, Maryland, ...
( es, Dirección de Impuestos y Aduanas Nacionales, DIAN). Some of these taxes include:


The value-added tax (VAT) is the main indirect tax. This rose to 19 percent in 2017; 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 Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbon di ...
hydrocarbons In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons are examples of group 14 hydrides. Hydrocarbons are generally colourless and hydrophobic, and their odors are usually weak or ex ...
. The DIAN recognizes two separate categories (''regimenes'') of VAT: common and simplified. The first refers to
business Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." Having a business name does not separ ...
es 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 Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. Tr ...
for the VAT or to generate invoices.

Financial transactions tax A financial transaction tax (FTT) is a levy on a specific type of financial transaction for a particular purpose. The tax has been most commonly associated with the financial sector for transactions involving intangible property rather than rea ...

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 1% of the total patrimony of people with patrimony estimated over 5 thousand million pesos (about 1,4 million USD as of February 2021).

Income tax

*''Corporations:'' Income tax ( es, 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%.Estatuto Tributario colombiano. Art. 240
Estatuto Tributario Nacional
*''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. See UVT. ::

Income declaration

In Colombia the natural persons who must present income declaration are classified on the next table. :: For 2019 are: * Natural person with gross asset value upper $149,202,000 COP. (4500 UVT) * Natural persons with
gross revenue In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive revenue ...
upper $46,418,000 COP per year. (1400 UVT) * Natural person with incomes upper 3,868,166 COP /monthly (
Earnings Earnings are the net benefits of a corporation's operation. Earnings is also the amount on which corporate tax is due. For an analysis of specific aspects of corporate operations several more specific terms are used as EBIT (earnings before intere ...
$46,418,000 per year). (1400 UVT) * Consumes and purchases upper $46,418,000 (1400 UVT) * If consumes through
credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ot ...
exceeds $46,418,000 (1400 UVT) * If cumulative value of banking deposits,
wire transfer Wire transfer, bank transfer, or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account, or through a transfer of cash at a cash ...
or financial investment, exceeds $46,418,000 COP. (1400 UVT) See UVT.

Payroll taxes

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

Local taxes

The local taxes are fixed by Local Councils through Acuerdos. 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 Beer is one of the oldest and the most widely consumed type of alcoholic drink in the world, and the third most popular drink overall after water and tea. It is produced by the brewing and fermentation of starches, mainly derived from cere ...
* ''Impuesto al consumo de licores, vinos, aperitivos y similares:'' Tax on
liquor Liquor (or a spirit) is an alcoholic drink produced by distillation of grains, fruits, vegetables, or sugar, that have already gone through alcoholic fermentation. Other terms for liquor include: spirit drink, distilled beverage or hard l ...
* ''Impuesto al consumo de cigarrillos:'' Tax on
cigarettes A cigarette is a narrow cylinder containing a combustible material, typically tobacco, that is rolled into thin paper for smoking. The cigarette is ignited at one end, causing it to smolder; the resulting smoke is orally inhaled via the oppo ...
* ''Impuesto al consumo de gasolina:'' Tax on gasoline * ''Degüello de ganado mayor:'' Tax on
slaughterhouse A slaughterhouse, also called abattoir (), is a facility where animals are Animal slaughter, slaughtered to provide food. Slaughterhouses supply meat, which then becomes the responsibility of a Meat packing industry, packaging facility. Slaug ...
s * ''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, services or commercial establishments The local council on each city fix the rate between this parameters:Art. 33 Ley 43 de 1983 * From 2 up to 7 per mil (0.2-0.7%) for industrial activities * From 2 up to 10 per mil (0.2-1.0%) for commercial and services. * ''Impuesto de avisos y tableros:'' Tax on
advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
* ''Impuesto predial:'' Property Tax

Tax Value Unit

UVT (Unidad de Valor Tributario) means Tax Value Unit. Instead of setting a range in Colombian pesos, DIAN has the UVT value which represents a variable amount of pesos, and is updated at least every year. The next table shows the variation of this index in Colombia per year. ::


External links

Taxes in Colombia
Official Investment Portal

Impuestos en Colombia {{DEFAULTSORT:Taxation In Colombia Taxation in Colombia, Finance in Colombia