Taxes

Taxes in Colombia

Understanding Colombian taxes is essential, especially for long-term residents and digital nomads.

Tax Residency

You become a Colombian tax resident if:

• You spend 183+ days in Colombia within any 12-month period
• OR your center of vital interests is in Colombia
• OR you have Colombian nationality (with some exceptions)

What this means:

Tax residents must report and potentially pay taxes on worldwide income, not just Colombian-source income.

Tax Rates (2026)

Personal income tax rates (progressive):

UVT (Unidad de Valor Tributario) is a tax unit adjusted annually. In 2025, 1 UVT = approximately COP 49,799.

Tax Exemptions

Pension income:

Retirement pensions are exempt up to 1,000 UVT monthly (~$12,100 USD). This makes Colombia very attractive for retirees.

25% Income Exemption:

Employees can exempt 25% of employment income (up to 790 UVT monthly).

Foreign income considerations:

• Tax treaties may prevent double taxation
• Foreign tax credits available in some cases
• Consult professional for your specific situation

Important Taxes

Income Tax (Renta):

Annual filing required if you meet thresholds. Filed by August/October of following year.

IVA (VAT):

19% on most goods and services (already included in prices).

Industry and Commerce Tax (ICA):

For businesses operating in Colombia.

Property Tax (Predial):

Annual tax on real estate (0.3-3.3% depending on location and value).

Digital Nomads and Taxes

The complexity:

• Digital nomad visa doesn't exempt you from taxes
• After 183 days, you're a tax resident
• Must report worldwide income including remote work income

Strategies (consult professional):

• Careful day counting (stay under 183 days)
• Proper documentation of income sources
• Understanding tax treaty benefits
• Potentially using Colombian company structure

Common misconception:

"Remote work for foreign company isn't taxed in Colombia" - False if you're a tax resident.

Filing Requirements

Who must file:

Tax residents with income above filing thresholds (varies by year and income type).

Documents needed:

• RUT (Tax ID number)
• Income statements
• Bank records
• Foreign income documentation

Deadlines:

August-October depending on last digit of RUT.

Getting a RUT

RUT (Registro Unico Tributario) is the tax ID number.

Required for:

• Opening bank accounts
• Receiving formal income in Colombia
• Filing taxes
• Purchasing property

How to obtain:

Register at DIAN (Colombian tax authority) office with cedula or passport.

Professional Help

Strongly recommended:

Colombian tax law is complex, especially for foreigners with international income.

Options:

• Colombian accountant (contador): $50-200/month
• Tax advisory firms: Higher cost but more comprehensive
• Many accountants work with expats and understand international situations

Key Takeaways

1. Track your days carefully if trying to avoid tax residency
2. Pension income is largely exempt - great for retirees
3. Digital nomads aren't exempt - plan accordingly
4. Get professional help - worth the investment
5. File on time - penalties are significant