:''See

Government of Colombia The Government of Colombia is a republic with separation of powers into executive, judicial and legislative branches. Its legislature has a congress, its judiciary has a supreme court, and its executive branch has a president. The citi ...

for a broader perspective of Colombian government.'' Taxation in

Colombia Colombia, officially the Republic of Colombia, is a country primarily located in South America with Insular region of Colombia, insular regions in North America. The Colombian mainland is bordered by the Caribbean Sea to the north, Venezuel ...

is determined by the

Congress of Colombia The Congress of the Republic of Colombia () is the name given to Colombia's bicameral national legislature. The Congress of Colombia consists of the 108-seat Senate, and the 188-seat Chamber of Representatives, Members of both houses are e ...

, 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, borough counc ...

, which determine what kind of taxes can be levied and which rates can be applied. The country inherited a harsh and diffused

taxation A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...

policy from the

Spanish Empire The Spanish Empire, sometimes referred to as the Hispanic Monarchy (political entity), Hispanic Monarchy or the Catholic Monarchy, was a colonial empire that existed between 1492 and 1976. In conjunction with the Portuguese Empire, it ushered ...

characterized by a heavy reliance on

customs Customs is an authority or Government agency, agency in a country responsible for collecting tariffs and for controlling International trade, the flow of goods, including animals, transports, personal effects, and hazardous items, into and out ...

duties.

National taxes

National taxes are administered by the National Directorate of Taxes and Customs (, DIAN). Some of these taxes include:

VAT

The

value-added tax A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...

(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 fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...

and

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; their odor is usually faint, and may b ...

. 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 Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...

es with estimated patrimony over 68 million

Colombian peso The Colombian peso (currency sign, sign: $; ISO 4217, code: COP) is the currency of Colombia. Its ISO 4217 code is ''COP''. The official sign is $, with ''Col$''. also being used to distinguish it from other peso- and dollar-denominated currencie ...

s (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. T ...

for the VAT or to generate invoices.

Financial transactions tax

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 An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

*''Corporations:'' Income tax () 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 product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...

upper $46,418,000 COP per year. (1400 UVT) * Natural person with incomes upper 3,868,166 COP /monthly (

Earnings {{Short description, Financial term 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 u ...

$46,418,000 per year). (1400 UVT) * Consumes and

purchases Purchasing is the procurement process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary gr ...

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 Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

, 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 A lottery (or lotto) is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse it to the extent of organizing a national or state lottery. It is common to find som ...

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 an alcoholic beverage produced by the brewing and fermentation of starches from cereal grain—most commonly malted barley, although wheat, maize (corn), rice, and oats are also used. The grain is mashed to convert starch in the ...

* ''Impuesto al consumo de licores, vinos, aperitivos y similares:'' Tax on

liquor Liquor ( , sometimes hard liquor), spirits, distilled spirits, or spiritous liquor are alcoholic drinks produced by the distillation of grains, fruits, vegetables, or sugar that have already gone through ethanol fermentation, alcoholic ferm ...

* ''Impuesto al consumo de cigarrillos:'' Tax on cigarettes * ''Impuesto al consumo de gasolina:'' Tax on

gasoline Gasoline ( North American English) or petrol ( Commonwealth English) is a petrochemical product characterized as a transparent, yellowish, and flammable liquid normally used as a fuel for spark-ignited internal combustion engines. When for ...

* ''Degüello de ganado mayor:'' Tax on

slaughterhouse In livestock agriculture and the meat industry, a slaughterhouse, also called an abattoir (), is a facility where livestock animals are slaughtered to provide food. Slaughterhouses supply meat, which then becomes the responsibility of a mea ...

s * ''Impuesto de registro:'' Tax to register academic degrees, patents, names, etc. * ''Impuesto sobre vehículos automotores:'' Tax on

automobile A car, or an automobile, is a motor vehicle with wheels. Most definitions of cars state that they run primarily on roads, Car seat, seat one to eight people, have four wheels, and mainly transport private transport#Personal transport, peopl ...

s * ''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 (business), product or Service (economics), service. Advertising aims to present a product or service in terms of utility, advantages, and qualities of int ...

* ''Impuesto predial:''

Property Tax A property tax (whose rate is expressed as a percentage or per mille, also called ''millage'') is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or Wealth t ...

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. ::

References

External links

Taxes in Colombia
Official Investment Portal
Principales impuestos nacionales, departamentales, distritales y municipales (Colombia)
Impuestos en Colombia {{DEFAULTSORT:Taxation In Colombia Finance in Colombia