Editors note: this post was updated in July 2016 with updated income tax information for Colombia.
Tax time for filing 2014 personal income tax returns in Colombia is fast approaching. In Colombia personal income tax returns are filed later in the year than in the U.S.
In Colombia, the dates to file personal tax returns for the prior year normally start in August. Personal income taxes in Colombia are known as “renta personas naturales.”
DIAN is the agency in Colombia responsible for collecting income taxes. DIAN performs similar functions as the IRS does in the U.S.
Note the following is based on my understanding of Colombian income taxes based on my experience but keep in mind I am not a tax expert. We strongly recommend consulting a tax expert.
Filing Taxes in Colombia – Requirements
An individual is considered a Colombian resident for tax purposes if he or she stays in Colombia for more than 183 days during a year, whether or not the stay was continuous during the year.
If you are considered a Colombian resident for tax purposes, you are not required to file income taxes in Colombia if the following requirements (for 2014) are met:
- Gross equity (net worth) on the last day of 2014 does not exceed 4,500 UVT, which is 123,682,500 pesos ($51,675 USD).
- Gross income in 2014 is less than 1,400 UVT, which is 38,479,000 pesos ($16,077 USD).
- Credit card consumption in 2014 does not exceed 2,800 UVT, which is 76,958,000 pesos ($32,153 USD).
- Total value of purchases and consumption in 2014 does not exceed 2,800 UVT, which is 76,958,000 pesos ($32,153 USD).
- Total value of accumulated bank savings, deposits or financial investments held at the end of 2014 does not exceed 4,500 UVT, which is 123,682,500 pesos ($51,675 USD).
If you are a Colombian resident for tax purposes and exceed any one of these amounts, you are technically required to file income taxes in Colombia. Note that Colombia taxes worldwide income, just like the United State does.
When to File Income Taxes in Colombia?
Your income tax filing date in Colombia depends on the last two digits your Colombia tax ID number, which is known as a Número de Identificacíon de Tributaria (NIT).
The filing dates in Colombia for income taxes for individuals for the 2014 tax year start in 2015 on August 11 and run until October 21.
The complete schedule of filing dates for 2014 Colombia personal income tax returns can be found on the DIAN website here.
How to Get a NIT
To get a NIT, you must go to a DIAN office to request one. The NIT is found on a RUT (Registro Único Tributario) form that will be given to you when you go to a DIAN office.
In Medellín, to get a NIT you just need to go to the DIAN office in the Alpujarra administrative complex.
DIAN’s office in Alpujarra is located in the basement of one of the buildings. You can ask any of the security guards which building has the DIAN office.
When you enter the DIAN office at the entrance just say you need a NIT for the first time.
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).
They will direct you to a reception desk that will give you a number to wait your turn. Watch the monitors for your number.
When your number is called you go to a desk and they will ask you for the copy of your ID, your address, and your phone number and for an activity code. The activity code is the type of work you do. A list of activity codes (in Spanish) can be found here.
The entire process in the DIAN office in Medellín took me less than 20 minutes when I did this a while back. I understand the DIAN office is often less busy in the mornings.
Colombia Income Tax Rates
Colombia has progressive income tax rates like in the U.S. that max out in Colombia at 33 percent. The following is the tax table for 2014 income taxes in Colombia:
Note that there isn’t any tax break in the tax rate schedule for Colombia for your marital status (being married) or for having children. However, it is possible to have a deduction from your income in Colombia for dependents.
In Colombia income taxes are calculated starting with your gross income.
You then deduct expenses related to receiving your income as well as any pension/retirement savings contributions with the result being your net income.
Colombia is much more lenient for home office deductions than in the U.S. I am able to deduct several home office expenses in Colombia that I am not able to deduct in the U.S.
In Colombia, 25 percent of your net income is exempt from taxes up to a limit of 2,800 UVT or 79,256,800 pesos. So you subtract this exempt income from your net income to get taxable income.
You then calculate Colombian income taxes due for your taxable income using the Colombia income tax table (see above).
After calculating Colombian income taxes due you can deduct income taxes paid in another country.
For example, I have a job in the U.S. but work remotely from Colombia. I pay taxes in the U.S. on my income since the U.S. taxes citizens wherever they are in the world.
I also file income taxes in Colombia, but I don’t have to pay any income taxes in Colombia since I pay more income taxes in the U.S. than my calculated Colombian income taxes due. I can deduct my U.S. income taxes on my Colombian tax return.
The Bottom Line
If you think you need to file a Colombian income tax return, you should talk to a tax expert. A tax expert can help you navigate all of the Colombian regulations, determine what you can deduct, and help you file.
I use a bilingual accountant to file my Colombian income tax return. She has many expat clients and her name, title and contact information are:
Paula Cruz, Colombian Public Accountant, email: firstname.lastname@example.org, Skype: cliping21
My cost this year for filing taxes in Colombia using her services was only 330,000 pesos ($118).
If you work remotely in Colombia with a job in the U.S. like I do, it is possible that you will not have to pay any income taxes in Colombia, depending on your personal situation.