Tax In Colombia

A Contractor’s Guide to Taxes :

One of the most consistently challenging aspects of contracting in Colombia is complying with the country’s tax system. As well as paying tax in Colombia, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income:

If you’re working in Colombia under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Colombia for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Colombia, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Colombia through PAYE is left with the prospect of doing everything themselves.

Do you know much about Colombian Tax Law? Does Colombia have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Colombia can range from 0 to 35 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator:

If you are a contractor and want a calculation on your tax and net retention in Colombia, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax :

Contractors in Colombia are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Colombian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Colombian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Colombian tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax:

We work with numerous umbrella companies in Colombia, many of whom are experts in tax and immigration laws. If you have any questions about tax in Colombia, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Colombian work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Colombia but without the overhead of directly dealing with the Colombian tax authorities. Get in touch with us today for some reliable advice on tax in Colombia!

 

When Do You Need to Lodge Your Tax Return?:
The tax year is the calendar year. Tax returns may be lodged after the end of the tax year.
Tax Filing Deadline :
Each year, the Colombian government establishes deadlines for filing income tax returns. Filing deadlines range from August to October. The exact deadline depends on the last two digits of your Colombian tax ID.
Can you file it online? :
Yes, https://muisca.dian.gov.co/WebArquitectura/DefLogin.faces
Currency:
Colombian Peso (COP)
Tax-free Threshold in:
1090 UVT (COP 36,140,040)
Grossed Income:
Up to 1090 UVT
Tax Rate:
0%
Grossed Income:
From 1091 UVT to 1700 UVT
Tax Rate:
19%
Grossed Income:
From 1,701 UVT to 4,100 UVT
Tax Rate:
28%
Grossed Income:
Above 4,100 UVT
Tax Rate:
33%
How long does it take to set up:
11 days.
How much does it cost:
COP 1,192,200 + 0.7% capital registration tax.
Is it easy? :
Starting a Business Rank: 96
How to File Taxes in:

The process for filing taxes in Colombia involves:

Step 1: Request a Registro Único Tributario (RUT) form from the DIAN Office. This RUT form will contain your Colombian Tax ID number, which is known as a Número de Identificacíon de Tributaria (NIT). You will need to bring your original ID (cedula or passport) and a copy of your ID (front and back of cedula or data page of passport).

Step 2: Log in here(link is external), using your NIT number and identification number.

Step 3: File the relevant form.

  • Form 210: Declaration of Income and Complementary returns
  • Form 160: Declaration of Assets abroad

Step 4: Once your tax return is completed, you can pay your tax via e-billing. You may also take your completed forms to any bank to pay the tax due. If you do not owe any taxes, the bank will stamp your form and process it without payment.

Additional Information

Notes:

The above progressive rates apply to annual employment income of employees.

 

The following progressive rates apply to non-employment income and capital income.

 

Grossed Income

Tax Rate

Up to 600 UVT

0%

From 601 UVT to 1,000 UVT

10%

From 1,001 UVT to 2,000 UVT

20%

From 2,001 UVT to 3,000 UVT

30%

From 3,001 UVT to 4,000 UVT

33%

Above 4,000 UVT

35%

*In December 2006, the Colombian government approved a reform of the Colombian tax system. Such reform incorporated the tax unit (Unidad de Valor Tributario or UVT) which is equivalent to COP 33,156 for fiscal year (FY) 2018.

Does the 183 day rule apply in:

Yes

When do you become a tax resident in:

You become a resident for tax purposes if you remain in Colombia for more than 183 continuous or discontinuous days during a 365-day period.

Am I taxed on my global income in:

Yes, if you are a Colombian resident. Non-residents are subject to tax on their Colombian-source income only.

 

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