Complete guide for taxes in Colombia in 2025
Understanding the tax system in Colombia is essential for every citizen.
Taxes vary depending on your income, assets, and economic activity. Navigating these obligations can be confusing—especially if you don’t know where to start.
That’s why we created this comprehensive guide. We’ll walk you through each step so you can identify your specific obligations and confidently comply with tax requirements in 2025.
Step-by-Step: How to Know Which Taxes You Must Declare
If you’re new to the Colombian tax system, follow these steps to determine your obligations:
Step 1: Identify Your Tax Situation
Start by answering the following key questions:
- Are you an individual or a legal entity?
- Do you reside in Colombia for more than 183 days a year?
- Do you earn income from employment, investments, or business activities?
- Do you own real estate, vehicles, or significant bank accounts?
- Do you make frequent financial transactions that may be taxable?
If you answered “yes” to any of these, it’s likely you have tax obligations in Colombia.
Step 2: Check if You Must File an Income Tax Return (Individuals)
To determine whether you need to file a personal income tax return in 2025, check if you meet any of the following conditions:
- You are not liable for VAT (Value Added Tax).
- Your gross assets as of December 31, 2024, exceed 4,500 UVT:
4,500 UVT × $47,065 = COP $211,792,500 - Your gross income exceeds 1,400 UVT:
1,400 UVT × $47,065 = COP $65,891,000 - Credit card purchases exceed 1,400 UVT:
COP $65,891,000 - Total purchases and expenses exceed 1,400 UVT
- Total deposits, bank transfers, or investments exceed 1,400 UVT
If you exceed any of these thresholds, you’re required to file your income tax return with the DIAN.
Step 3: Determine if You Owe Wealth Tax
This tax applies if your net worth exceeds COP $3,388,680,000 as of January 1, 2025.
Step 4: Check if You Must Pay ICA (Industry and Commerce Tax)
If you run a business or offer professional services in a municipality, you may be subject to ICA (Impuesto de Industria y Comercio). This tax is based on your gross income, and the rate depends on your city and type of business.
To determine if you owe ICA:
- Check with your local municipal government:
Each municipality sets its own ICA (Industry and Commerce Tax) rates and regulations. It’s important to verify with your city’s treasury department the income threshold and applicable rate for your specific economic activity. - Verify if your annual income exceeds the threshold set by your city:
Some municipalities establish a minimum income level below which certain taxpayers are exempt from paying the ICA. If your income falls below this limit, you may not be required to declare or pay this tax. - Determine the payment frequency:
In some cities like Bogotá, the ICA must be declared and paid bimonthly, while in other municipalities, it’s paid annually. - Review your economic activity classification:
Depending on the nature of your business, ICA rates can range from 0.2% to 1% of your gross income, with exceptions for certain sectors. - Consider the simplified ICA regime:
In some municipalities, small business owners and independent professionals can opt into a simplified regime with reduced rates or presumptive taxation based on estimated income.
Step 5: Check if You Must Pay Property Tax
If you own real estate, you’re likely required to pay Property Tax (Impuesto Predial Unificado). This tax is based on the property’s cadastral value, determined by your local government.
To determine if you must pay property tax and how much you owe, follow these steps:
Check the cadastral value of your property:
This value is set by the Agustín Codazzi Geographic Institute (IGAC) or your local cadastral authority. You can find it on your municipality’s website or on last year’s property tax bill.Review the applicable rates:
Each municipality sets its own rates, which typically range around 1.6% of the cadastral value. Commercial and luxury properties generally have higher rates.Verify the payment deadlines:
Property tax is usually paid annually, with due dates that vary by city. Some cities allow payment in installments.Check for early payment discounts:
Some municipalities offer discounts between 5% and 15% for paying before the deadline.Confirm if you qualify for exemptions or tax benefits:
There are exemptions for certain types of properties, such as social interest housing (VIS), cultural-use buildings, or historical heritage properties.Check for penalties due to late payment:
If you miss the payment deadline, you may incur late interest charges and additional penalties.
Step 6: Check if You Must Pay Vehicle Tax
If you own a vehicle registered in Colombia, you are required to pay the Motor Vehicle Tax, a departmental tax that must be paid annually by all vehicle owners.
The amount due depends on the type of vehicle, its commercial appraisal, and the rate established by the department where the vehicle is registered.
To determine if you need to pay, follow these steps:
Check with your Department’s Treasury Office:
Each department sets different tax rates based on the type of vehicle (e.g., motorcycles, private cars, cargo trucks, etc.).Verify the commercial appraisal:
This value is set annually by the Ministry of Transportation and serves as the basis for calculating the tax.Review the applicable rates:
Generally, rates range from 1.5% to 3.5% of the vehicle’s commercial value, depending on the vehicle category.Know the payment deadlines:
Departments set their own deadlines and may offer early payment discounts.Avoid penalties and seizures:
Late payments generate interest charges, and your vehicle may be subject to seizure or driving restrictions.
Step 7: Evaluate if You’re Subject to the 4x1000 Tax
The Financial Transactions Tax (GMF), commonly known as 4×1000, is a tax applied to certain financial transactions in Colombia. It consists of a 0.4% charge on every withdrawal or transfer made from Colombian bank accounts.
To determine if this tax affects you, follow these steps:
Check if your account is exempt:
Each individual can request one bank account to be exempt from the 4×1000 tax, as long as the total monthly transactions do not exceed 350 UVT
(equivalent to COP $17,429,650 in 2025).Identify which transactions are taxed:
The 4×1000 applies to cash withdrawals, transfers between different banks, electronic payments, and issued checks.Consult your bank:
Some special accounts may offer partial exemptions or provide strategies to reduce the tax’s impact.Consider alternative payment methods:
To avoid this tax on frequent transactions, some individuals choose to use multiple bank accounts or electronic payment methods strategically.
Step 8: Watch for Temporary Taxes in 2025
1. 1% Stamp Tax on Transactions Over COP $300 Million
This tax applies to all financial and commercial transactions exceeding COP $300 million. It is charged at the time the transaction is formalized through public or private documents that certify the operation.
Who is affected by this tax?
Businesses and individuals involved in high-value sales, mergers, acquisitions, or transfers of large real estate properties.
Large-scale financial transactions, such as loans or investments.
Example:
If a business owner sells a property for COP $500 million, they must pay 1% of the total amount—COP $5 million—as stamp tax.
2. 1% Tax on Oil and Coal Sales
This tax applies to the sale of crude oil and coal, both domestically and through exports. Its purpose is to increase tax revenue from high-profit strategic sectors.
Who is affected by this tax?
Companies that extract or commercialize oil and coal
Exporters of these commodities to international markets
Refining and distribution companies operating within Colombia
Example:
A company that exports COP $1 billion in crude oil will owe 1% in tax, which amounts to COP $10 million.
3. 19% VAT on Online Gambling
A 19% Value-Added Tax (VAT) applies to all bets and gambling activities conducted through online platforms registered in Colombia.
Who is affected by this tax?
Users who participate in online casinos, sports betting, and virtual lottery games
Betting platform operators registered in Colombia
Example:
If you deposit COP $100,000 into an online gambling platform, you must pay an additional COP $19,000 in VAT.
This tax aims to regulate and generate revenue from a growing industry and align its tax burden with other sectors in the entertainment industry.
How to Stay Compliant in 2025
Stay Informed:
Regularly check updates from the National Tax and Customs Directorate (DIAN) and your local tax offices.Keep Organized Financial Records:
Track your income, expenses, assets, and financial transactions to make tax filing easier.Use Official Forms:
Access the most up-to-date forms and guides on DIAN’s official website.Meet Declaration Deadlines:
File your returns on time to avoid penalties and benefit from early payment discounts.Seek Professional Advice:
For complex tax scenarios, it’s best to consult a certified public accountant or tax advisor.
Staying informed and organized will help you manage your tax responsibilities effectively in 2025—and avoid unnecessary penalties.
If you’re unsure about your tax situation or need assistance managing and optimizing your tax payments, Nexo Legal is here to help.
Contact us for professional guidance and ensure that all your tax obligations are met safely and efficiently.
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After submitting the form, your case undergoes a comprehensive review by our team of specialist to assess its viability. Providing clear and concise information about your objectives accelerates this process.
Subsequently, a specialist will be assigned to your case, reaching out to you within a day to clear up details about your case and outline the next steps to help you achieve your goals.
Get started with a free case assessment
What will happen after you fill out this form?
After submitting the form, your case undergoes a comprehensive review by our team of specialist to assess its viability. Providing clear and concise information about your objectives accelerates this process.
Subsequently, a specialist will be assigned to your case, reaching out to you within a day to clear up details about your case and outline the next steps to help you achieve your goals.
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