Taxation in Colombia

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

Taxation in Colombia is determined by the Congress of Colombia, the Department 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 and local governments' budgets run significant deficits.

National Taxes

National taxes are administered by the National Tax and Customs Direction (DIAN) . 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: public transportation services, Water supply and sanitation services, 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 imposed over the years 1998-1999 that covers all of 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%.

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%.

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	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