Colombian Corporate Tax
Businesses in Colombia need to file taxes on a monthly, bimonthly, and annual basis. With the Colombian tax and business laws regularly changing, it’s essential to have both a Colombian accountant and a lawyer that are dedicated to you and the success of your company. Having a Colombian accountant means your books will be kept up-to-date from week to week, saving you time, money, and stress as you learn the ropes in Colombia.
(Since some changes to the laws within the last few years, even expats who spend more than 183 days in Colombia per calendar year have to file individual taxes, though you do get a deduction based on taxes paid in your country of origin.)
Employee payroll taxes in Colombia cover health, retirement, and other benefits for your employees, which tend to cost approximately 42-53% of the employee’s salary, and are due to certain Government Agencies in Colombia on a monthly basis. (There are some exceptions; we can examine your case to see if they would apply to you.) Liquidation, vacation, and employee bonuses (certain ones are required by law) must be paid at certain times. Liquidation is paid when the employee’s contract is terminated and bonuses are paid at the end of the year or every other year.
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There is no skirting this issue: these tax laws are rigidly regulated and enforced. Ignorance is no excuse for the employer, and if you fail to understand and comply by these regulations you face fines and possibly, in extreme cases, the possible downfall of your company via forced bankruptcy.
We don’t say this to scare you, but to impress upon you the importance of careful planning and understanding of what each employee costs you. There are thousands upon thousands of businesses in Colombia that are thriving and following the regulations. With a qualified Colombian accountant keeping track of your records, there is no reason for you to worry about doing business and paying taxes in Colombia.
At the minimum, your annual corporate tax declarations will include renta, cree, información exogena, and industria comercio. These are due in April (the exact date will depend on the last two numbers of your business ID), and late payments result in fines starting at $400.000 COP.
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All this to say: if you’re not caught up on your books, now is the time to get there. Our bilingual Colombian accounting team is proud of the work we do, and we’re here to help. For more information on Colombian corporate tax filings and corporate tax planning, contact us.
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