Filing taxes is no fun no matter where you are, but at least in your home country you (generally) know what's expected of you. It might be tempting to think that taxes are one less responsibility you'll have when you move to Colombia, but the truth is that by becoming a resident in this country, your tax situation just got more complicated.
But it's nothing to worry about. There are many ex-pats living in Colombia who are managing their tax obligations with no problems. Just like you would have an accountant in your country of origin to help you stay on top of tax laws and keep as much of your own money as you legally can, you'll want to have an experienced Colombian accountant to help you address issues such as deductions and double taxation in your home country, and to make sure you understand the tax structure in Colombia, which may be different from that in your home country.
Colombian Tax Residents
Think you're not a Colombian tax resident? Think again! Colombia says you are, indeed, if you are in Colombia for more than 183 days in a year. If that's you, you will need to file personal taxes in Colombia and pay based on your worldwide income.
If you are in Colombia for less than 183 days but you are still making money in Colombia, you will need to pay taxes on the Colombian income (but not on your worldwide income).
The Dirección de Impuestos y Aduanas Nacionales (DIAN) is the organization responsible for taxes in Colombia (similar to the IRS in the United States). You'll already be familiar DIAN if you started a business in Colombia, and you're indirectly familiar with them via the IVA you see on your restaurant bills and the taxes on financial transactions, including wire transfers, overdrafts, currency exchange, and ATM withdrawals.
When to Pay Your Colombian Taxes
The tax year runs from January 1 to December 31. Personal taxes are filed in October, unlike corporate taxes which are filed in April. The exact deadline will depend on the last two digits of your Colombian tax identification number.
Late filing results in fines that add up with each month of delinquency.
Tax Brackets in Colombia
As in the US, the percentage you pay in taxes depends upon how much you earn. Your income is exempt up to a certain amount; after that, there are three brackets: 19%, 28% and 33%.
Tax Deductions in Colombia
Although children are not one of them, Colombia does have a variety of deductions that foreigners and nationals alike are allowed to claim. Your Colombian accountant will help you determine which deductions you qualify for.
Colombia Legal & Accounting strives to make your life in Colombia as carefree as possible. Our team of Colombian accountants, lawyers, and assistants will take a look at your unique situation and assist with Colombian tax planning and filing to ensure your peace of mind.