Updated Guide: Corporate tax rate in Colombia for 2025

If you own a business or are considering investing in Colombia, it is crucial to understand how the corporate tax rate works in the country.

In 2025, the tax structure continues to evolve to improve revenue collection and offer incentives to certain strategic sectors.

This guide provides a clear and simple explanation of how much you need to pay, who is required to do so, and how you can optimize your tax burden.

Who needs to pay corporate income tax in Colombia?

The income tax in Colombia applies to both national companies and branches or permanent establishments of foreign companies.

If you have a registered company in Colombia, it will be subject to tax on its worldwide income.
If you are a foreign company without a permanent presence in the country, you will only be taxed on income generated within Colombian territory.

Corporate tax rate in 2025

The general corporate income tax rate remains at 35%. However, certain industries have different conditions:

Financial institutions and insurance companies with annual income above 120,000 UVT (approx. COP 5.975 billion) must pay a 5% surcharge, bringing their total tax rate to 40%.
Companies with mega-investments may qualify for a reduced rate of 27% if they generate at least 400 direct jobs and invest more than COP 1.14 trillion.
Companies in special zones (ZOMAC) may benefit from exemptions and reduced rates, depending on the length of their operation.

How to calculate corporate income tax

The tax is calculated based on taxable profit, which equals total income minus deductible costs and expenses.

Example Calculation:

Gross Income: COP 2.000 billion
Operating and Deductible Expenses: COP 800 million
Taxable Profit: COP 1.200 billion
Tax Payable: 35% on COP 1.200 billion = COP 420 million

If this company were a financial institution subject to the 5% surcharge, its total tax would be COP 480 million.

When and how to pay income tax?

Corporate income tax payments are made in two installments:

First installment (May 2025): Equivalent to 75% of the previous year’s tax liability.
Second installment (July 2025): Covers the remaining balance.

Each company must check its exact due date based on its NIT (Tax ID Number) by consulting the DIAN’s tax calendar.

Strategies to reduce tax burden

Paying taxes is a legal obligation, but there are legal strategies to optimize the amount payable. Here are some key options:

1. Take Advantage of Tax Incentives:

Deductions for investment in science and technology: Tax credits of up to 30% of the invested amount.
Up to 15-year tax exemption for renewable energy projects. Companies can also deduct 50% of the investment in renewable energy projects from their income tax, spread over 15 years, allowing them to recover their investment gradually.
Tax benefits for social housing (VIS) construction.

2. Maintain an Organized Accounting System:

Keeping updated financial records ensures you maximize deductions.
Complying with electronic invoicing helps avoid penalties and increases transparency.

3. Consult a Tax Advisor:

A tax expert can help you identify tax-saving opportunities and ensure full compliance with Colombian regulations.

Understanding Colombia’s corporate income tax is essential to avoid penalties and optimize your company’s financial health.

With proper planning and by taking advantage of tax benefits, you can reduce your tax burden and focus on growing your business.

At Nexo Legal, we provide specialized tax advisory services to help your company comply efficiently and without complications.

📩 Contact us today and secure your company’s financial success in 2025!

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Phone: (+57) 315 3354174

direccioncomercial@nexo.legal

Calle 11 no. 43b – 50,

Parque Empresarial Calle Once

Oficina 407

Medellín, Colombia