Taxes in Colombia and formulation of tax structure
Tax Consulting
Ongresso provides a comprehensive set of tax services in Colombia. Our expert tax accountants and attorneys, specialized in taxes in Colombia and business audits will help you set up your structure in the best way, optimizing your international tax structure and guaranteeing full compliance with local regulations.
Hence the Colombian tax system can be overwhelming. Also the 2016 tax reform implemented many changes in the tax code, such as an increase in VAT (IVA in Spanish) from 16% to 19%, and modifications in the corporate income tax as a result you require the help of experts to navigate.
Furthermore we provided taxation consultancy, implementation and management of VAT, withholding tax, income tax, Colombia wage tax, filing of annual tax returns with the Colombian tax authority (DIAN), local and regional taxes (e.g. Industry and Commerce, property tax etc).
Most noteworthy Tax regulations in Colombia in recent years have changed and involved losts of benefits first of all tax exemptions, special credits, additional deductions, and so on. They purpose is encourage sectors for the national economy, improve infrastructure and assets of the country’s companies, as among other, aiming to generate employment.
Please Contact us, in case you need tax services consultation in Colombia.
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Glossary
DIAN
The Colombian tax authority DIAN (National Directorate of Taxes and Customs) is the special administrative unit in charge of ensuring the country’s fiscal security and the protection of national economic public order, through the administration and control of due compliance with tax, customs and exchange obligations, and the facilitation of foreign trade in regards to equity, transparency and legality in foreign and Colombian customs. (Source: Wikipedia)
General Accounting Office of the Nation
The General Accounting Office of the Nation is a Public Sector Entity created to determine the accounting policies, principles and rules that should govern in the country for the entire public sector (Source: official website)
Corporate income tax
The corporate income tax is a national duty levied on revenues that increase the taxpayer’s net equity derived from regular corporate operations.
Legal person
Legal person refers to a non-human entity that is treated as a person for limited legal purposes – e.g. corporations. Legal persons can sue and be sued, own property, and enter into contracts. In most countries, legal persons cannot vote, marry, or hold public office. (Source: Cornell University)
Natural person
In jurisprudence, a natural person is a person (in legal meaning, i.e., one who has its own legal personality) that is an individual human being, as opposed to a legal person, which may be a private organization. (Source: Wikipedia)
Wealth tax
Wealth tax is applicable to all companies and individuals with equity higher than COP 1,000 million (USD 418,000 approximately) by January 1, 2015
Wage in Colombia
Colombian Wage is considered much lower than other parts in latin america, up to this date (2018) Colombian minimum monthly wage is approximately $258,80 USD, for certain specialized jobs the salary is higher. Many foreign companies choose operate in colombia due to highly trained personal at a lower cost.
Retención en la Fuente (withholding source tax/tax withheld at source)
The withholding tax is not a tax but the advance payment of a certain tax that may be income tax, sales tax or industry and commerce tax.
Taxes are periodic, whether monthly, bimonthly, annual, etc., so the state, in need of money daily recourse to withholding tax at the source that generates it (purchase, provision of service), and thus prepares part of the tax.
Income tax for equality (CREE, now Autorenta)
Consists of a tax similar to the income tax, with certain differences on the deductions applicable when determining the taxable base.
NIT (Número de Identificación Tributaria or Tax identification number)
The tax identification is a unique code, generally of alphanumeric character, used in order to unequivocally identify any natural or legal person susceptible to be taxed, assigned to them by the States, with which they make the registration or census thereof, for administrative-tax purposes. It’s equivalent in USA is TIN (Taxpayer Identification Number)
Income and capital gains tax
Income tax is a national tax levied on profits and gains derived from day-to-day operations (ordinary income). The capital gains tax applies over the extraordinary income.
Sales tax (VAT)
VAT is an indirect national tax on services provided and on sales and imports of physical goods, a sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow (or require) the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax.
Consumption tax
Indirect tax levied on vehicles, telecommunications, food and beverages.
Tax on financial transactions
The tax is accrued on every transaction aimed at withdrawing resources from checking, deposit or savings accounts, and cashier checks.
Industry and Commerce Tax
The industry and commerce tax is a local tax that is imposed on revenue generated from industrial, commercial or service activities carried out in the corresponding municipality.
Property tax
This tax is levied annually on the ownership, usufruct or possession of real estate property. It is collected by the municipality where the property is located.
Our Offices
Ongresso Colombia
Medellín
Cra 41 # 9 - 60 Office 202
Phone: +57 4 501 73 78
Bogotá
Cra 7#116-50
Phone: +57 317 441 06 29
