Income tax in Colombia

July 13, 2018

INDIVIDUAL TAXATION

Residents are taxed on their worldwide income. Income of married couples are assessed and taxed separately.

Resident foreigners are taxed only on their Colombian-sourced income for the first four years of their stay in the country. After this period, resident foreigners are taxed on their worldwide income.

INCOME TAX (impuesto de renta)

Income is taxed at progressive rates. Income tax is levied on tax value units (unidad de valor tributario, UVT), which is annually adjusted by the retail price index.

INCOME TAX

TAXABLE INCOME, UVT TAX RATE
Up to 1,090 UVT
nil
1,090 UVT - 1,700 UVT
19%
1,700 UVT - 4,100 UVT
28%
Over 4,100 UVT
33%
Source: Global Property Guide

The UVT for 2017 is equivalent to COP31,859 (US$11). The UVT for 2016 is equivalent to COP29,279 (US$10).

INCOME TAX 2017

TAXABLE INCOME, COP (US$) TAX RATE
Up to 34,726,310 (US$11,772)
nil
34,726,310 – 54,160,300 (US$18,359)
19%
54,160,300 – 130,621,900 (US$44,279)
28%
Over 130,621,900 (US$44,279)
33%
Source: Global Property Guide

INCOME TAX 2016

TAXABLE INCOME, COP (US$) TAX RATE
Up to 31,914,110 (US$10,818)
nil
31,914,110 – 49,774,300 (US$16,873)
19%
49,774,300 – 120,043,900 (US$40,693)
28%
Over 120,043,900 (US$40,693)
33%
Source: Global Property Guide

A presumptive minimum income is annually calculated at the rate of the taxpayer´s net worth. The amount by which the taxpayer´s deemed income exceeds his net income calculated under ordinary rules may be deducted from his gross income over the next five years.

RENTAL INCOME
Colombia luxury residential housesIncome from leasing real property is considered as ordinary income and taxed at progressive rates. Rental income is subject to 3.5% withholding tax, which is considered as advance tax payment. This tax can be credited against the taxpayer´s income tax liability when he files his tax return.

Taxable rental income is computed by deducting income-generating expenses (such as administrative expenses, insurance, realtor or leasing agent fees, taxes, maintenance and repairs) from the gross rent. Property taxes are also deductible.

CAPITAL GAINS TAX
Capital gains from selling real property held for at least two years are subject to capital gains tax at a flat rate of 10%. The taxable gain is computed by deducting the following from the selling price: acquisition costs (as revalued by the consumer price index), costs of transferring ownership, and improvement costs.

Capital gains realized from properties sold within two years of acquisition are subject to income tax at progressive rates.

WEALTH TAX ((impuesto al patrimonio)

Wealth tax is an annual tax imposed on individuals who exceed a certain amount of wealth. Wealth tax is levied at progressive rates.

WEALTH TAX 2017

TAXABLE INCOME, COP (US$)
TAX RATE
Up to 2,000,000,000 (U$677,966)    0.05%
2,000,000,000 – 3,000,000,000 (US$1,016,949) 0.10%
3,000,000,000 – 5,000,000,000 (US$1,694,915) 0.20%
Over 5,000,000,000 (US$1,694,915) 0.40%
Source: Global Property Guide

WEALTH TAX 2016

TAXABLE INCOME, COP (US$)
TAX RATE
Up to 2,000,000,000 (U$677,966) 0.15%
2,000,000,000 – 3,000,000,000 (US$1,016,949) 0.25%
3,000,000,000 - 5,000,000,000 (US$1,727,116) 0.50%
Over 5,000,000,000 (US$1,694,915) 1.00%
Source: Global Property Guide

WEALTH TAX 2015

TAXABLE INCOME, COP (US$)
TAX RATE
Up to 2,000,000,000 (U$677,966) 0.20%
2,000,000,000 – 3,000,000,000 (US$1,016,949) 0.35%
3,000,000,000 - 5,000,000,000 (US$1,727,116) 0.75%
Over 5,000,000,000 (US$1,694,915) 1.15%
Source: Global Property Guide

PROPERTY TAX


Real Estate Tax (impuesto predial unificado)

Property taxes are levied on the cadastral value of the properties as assessed by the municipalities. The rates of the unified property tax on the aggregate value of the land and buildings range between 0.30% and 3.30%.

Real estate tax paid is deductible from rental income for individual income tax purposes.

CORPORATE TAXATION

INCOME TAX

Income earned by companies is liable to corporate income tax at a flat rate of 25%. Income-generating expenses are deductible when calculating taxable income.

CAPITAL GAINS TAX

Capital gains realized by companies from assets held for at least two years are liable to capital gains tax at a flat rate of 10%. The taxable gain is computed by deducting the following from the selling price: acquisition costs (as revalued by the consumer price index), costs of transferring ownership, and improvement costs.

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