Accountancy in Colombia

>> Taxation in Colombia

In Colombia there are national and regional taxes, the former apply to natural and legal persons, the latter are regulated by each department or municipality.

National Taxes

  • Income Tax: It is a tax of National Order that taxes the generated profits in a taxable period. It is of collected annual and its rate is 34%. As a complement to this tax, there is the occasional income tax, which corresponds to the income from the profits of the activities that are not specific to the business, such as the sale of shares or assets, among others. Its rate is 10%.
  • Wealth Tax:In Spanish known as “Impuesto a la Riqueza”. It taxes the gross assets of the taxpayers. The gross assets refers to the totality of goods and rights of a person or company of the immediately preceding taxable year equal or superior of $ 1,000 million pesos in its gross equity less debts.
  • Value Added Tax: In Spanish known as “Impuesto al Valor Agrado or IVA”. It is an indirect tax of national order. It taxes the provision of services, sale of goods, and the importation of movable tangible property. It is indirect because it is paid by each taxpayer at the moment of making a purchase or acquiring a service with some very specific exceptions Its rate is 19%, 5% and 0%.
  • Withholding at the source: In Spanish known as “Retencion en la fuente”. It is a mechanism of anticipated collection of a tax. In Colombia, there is withholding at the source for the income tax, IVA and industry and commerce.
  • Consumption Tax: It is an indirect tax that taxes the vehicle, telecommunications, beverages and food sectors. Its rate is 4%, 8% and 16%.
  • Tax on Financial Movements: It is a National Order tax that is applied to the financial transactions made by the users. In general it taxes the withdrawals of the checking or savings accounts, or management checks. Its rate is 0.4%. (4 per thousand).

Regional Taxes

  • Industry and Trade Tax: It taxes industrial, commercial or service activities carried out in each municipality by a taxpayer with or without establishment. Its frequency and rate is established by each municipality and the rates are from 0.2% to 1.4%.
  • Property Tax: It annually taxes the right of property, usufruct or possession of real estate located in Colombia and is collected and administered by each municipality.

 

Each municipality raises other taxes such as vehicles, liquor consumption, among others.

 


Latest version updated 5th April 2019

Country Breakdown

48.65

Million

Population

$

Colombian Peso

Currency

$ 282.5

Billion

GDP

1.142

Million

km2