THE COMPLETE UPDATED GUIDE: TAXES FOR FOREIGNERS IN COLOMBIA 2024

Breaking down taxes in Colombia: an easy guide for foreigners

When considering moving to Colombia, living in Colombia or even just visiting the country there are many aspects you want to keep in mind besides choosing the perfect city or maybe getting your Colombian resident visa.

Just like in any other country, living the dream comes with some other important duties, one of those is: paying your taxes.

So, the question is: do you have to pay taxes as a foreigner in Colombia? How do you know for sure if you apply as a tax resident in Colombia? And if so, are you eligible to declare taxes in the country?

Here we explain it plain and simple.

The brand you build for your business is what will make it stand out in the market and among the components of your brand is what is known as a trademark.

While the brand of your business represents your reputation and business in the public eye, a trademark will be a specific aspect of your brand which has legal protection as it is a unique identifier for you.

So, a trademark is known as any distinctive sign capable of distinguishing goods or services that can be graphically represented, it includes words, names, acronyms, letters, numbers, images, figures, symbols, graphics, logotypes, monograms, portraits, labels, emblems and shields, holograms, a color combination, 3D forms, sound marks, aromas, and any combination of the mentioned signs.

Determining if you are a tax resident

First things first, to get familiar with the Colombian tax law you have to be sure if you are considered as a tax resident to the country.

According to Colombian law, an individual is considered a tax resident if:

-They have stayed in the country (continuously or not) for more than 183 days (taking into account entry and exit dates) within a period of 365 consecutive days. If the 183-day period covers two different calendar years, the individual would be considered a Colombian taxpayer for the second year.

Here, the days count even from the day you arrived in the country and the day you left, and important to say, it doesn’t matter on which month you arrived, it will be counted on a period of exactly 365 days, even for different years.

-If they are related to the foreign service of the Colombian state.

-Or, if they are Colombian nationals, not only if they were actually born in the country but also because of their condition, this is, foreigners who now own a Colombian “cédula”, or ID. For this particular category there are also some other conditions attached to it; first, when 50% or more of the individual’s income comes from a national source, when 50% or more of their assets are administered in Colombia, when 50% or more of their assets are understood to be owned in Colombia, if they have not been yet able to prove that they reside at another country OR if their place of residency is considered as tax haven country to the colombian law.

“An individual is considered a tax resident in Colombia if they have stayed in the country for more than 183 days, if related to the foreign service of the Colombian state or if they are Colombian nationals, not only if they were actually born in the country but also because of their condition”

So for foreigners it is just enough to be considered as a tax resident the fact that you resided more than 183 days in the country, unless of course, you already are a foreigner who is considered as a national, belonging to that last previously explained category.

So you are a tax resident, what's next?

Being a tax resident in Colombia does not automatically mean you are required to report your income.

Income tax is a tax that only applies to natural persons, employees or self-employed, who must pay it to the state based on their salary, earnings, commissions, and other income marked on the previous year.

So, your tax return is basically the information that the DIAN (the Colombian Tax and Customs National Authority) requires you to submit in order to calculate your income tax obligation.

The fact that you are required to report your income or not will finally depend on your income itself, not relying only on your tax residency, since you can be a tax resident but not required to declare your tax income.

The income statement you present is based upon the economic transactions of your previous year, for example, your income statement of 2024 will be based on your movements of 2023.

“It is very important to note that not every tax resident is required to report income”. Here are the reasons:

This being said, natural persons that are required to declare income tax on 2024 are those whose:

Gross equity at the end of the 2023 fiscal year is equal to or greater than $190.854.000 COP.
Income of the taxable year is either
$59.377.000 COP or equal to it.
Credit card payments accounted for a total amount of more than
$59.377.000 COP.
Total value of purchases and consumption is equal to or more than
$59.377.000 COP.
Total value of accumulated income from bank appropriations, deposits, or financial investments is at least
$59.377.000 COP.

The income statement does not only serve a purpose to the DIAN, but it also points to areas of interest to you, as the taxpayer, such as how much money you earn (financial gain), what you possess (resources), how much you owe (debts), and how much you generally spend (consumption expenditures).

“You must keep in mind that to present an income tax declaration doesn’t necessarily mean that you have to pay tax Income in Colombia”.

Income tax in Colombia: Deadlines

For the income statement of natural persons in Colombia, the first step is to take a look at the DIAN 2024 tax calendar. It is between August 12/2024 and October 24/2024, that the natural person who meets the previously detailed criteria is required to file their tax return.

The due date for the declaration and payment appears on the dates shown below, taking into account the preceding two numbers of the NIT corresponding to the RUT, (your tax identification numbers). It is very important to do it before the established date and protect yourself against possible fines:

Last digits of your NIT and deadline to declare:

DIGITS	DEADLINE	DIGITS	DEADLINE	DIGITS	DEADLINE	DIGITS	DEADLINE
01 and 02	August 12	27 and 28	September 2	53 and 54	September 19	79 and 80	October 9
03 and 04	August 13	29 and 30	September 3	55 and 56	September 20	81 and 82	October 10
05 and 06	August 14	31 and 32	September 4	57 and 58	September 23	83 and 84	October 11
07 and 08	August 15	33 and 34	September 5	59 and 60	September 24	85 and 86	October 15
09 and 10	August 16	35 and 36	September 6	61 and 62	September 25	87 and 88	October 16
11 and 12	August 20	37 and 38	September 9	63 and 64	September 26	89 and 90	October 17
13 and 14	August 21	39 and 40	September 10	65 and 66	September 27	91 and 92	October 18
15 and 16	August 22	41 and 42	September 11	67 and 68	October 1	93 and 94	October 21
17 and 18	August 23	43 and 44	September 12	69 and 70	October 2	95 and 96	October 22
19 and 20	August 26	45 and 46	September 13	71 and 72	October 3	97 and 98	October 23
21 and 22	August 27	47 and 48	September 16	73 and 74	October 4	99 and 00	October 24
23 and 24	August 28	49 and 50	September 17	75 and 76	October 7
25 and 26	August 29	51 and 52	September 18	77 and 78	October 8

Take a look at the full tax calendar in the official DIAN’s website https://www.dian.gov.co/Paginas/CalendarioTributario.aspx

What happens if I don't file my tax return or if I do it late?

Among the consequences of not declaring your tax income or declaring it outside the established calendar period dates, you may face some of the following:

If you file your tax return after the payment deadline has passed, you will incur a late filing penalty equal to 5% of the amount owed. The penalty will increase by 5% for each month or fraction of a month that passes between the payment deadline and the date on which the tax return is submitted.
The minimum fine to be paid to the DIAN is $471.000 COP in 2024 for unfulfilled or poorly fulfilled obligations declared after the time due. The penalty is applied even if the income statement shows a negative value in the figure to be paid to the DIAN.
A warning message will be sent to you, notifying you that you have as long as one year to make payments corresponding to the amount of the tax, if this payment is not registered by the end of the month, 10% will be added, as agreed on the article 642 of the established Colombian law.
In case you don’t file your corresponding income taxes at all, it would mean paying a 20% fine of the value of the bank deposits or gross income at the year you were supposed to declare, or 20% of the gross income that appears in the last income tax return filed, depending on which has the highest value.

Easier if you have someone by your side

We get that Colombian taxes for foreigners may be complicated to understand or difficult to keep up with. This considering the bureaucratic processes, the dates, and even the language itself if you are not so much of a fluent Spanish speaker.

Nevertheless, if you ever consider living or investing in Colombia this information is vital and required for you to know, that’s why Nexo Legal can be your best ally on any tax related activities.

Don’t hesitate to get in touch with us to receive the guidance you need regarding your taxes in Colombia, we will be more than happy to answer your questions and help you from the first to the last step of the way.

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