Change of Tax Residency: Tax Implications of Moving to Colombia

Moving to Colombia does not only imply a change of country, culture, or lifestyle.

It also implies, in many cases, a change of tax residency, and with it, new tax obligations that are essential to understand before the DIAN assumes them as given.

In this guide, we explain in a clear and practical way what it means to become a Colombian tax resident, which taxes and reports apply, what the most common mistakes are, and how to plan this process if you are coming from the United States, Canada, or any other country.

When do you become a tax resident in Colombia?

The general rule is simple:

If you have been in Colombia for more than 183 days (consecutive or not) within a 365-day period… guess what: you are already a tax resident!

And be careful: the count is exact, it includes entry and exit days, and it can span across different years.
Example: if you arrived in October and stayed until April… it counts.

What changes when you acquire tax residency?

Once you are a Colombian tax resident, the worldwide income principle applies.

This means that Colombia may tax:

• Income obtained in Colombia
  
  
• Income obtained abroad
  
  
• Assets located inside and outside the country
  
  

It does not matter whether you are a foreigner or a Colombian: tax residency is what determines taxation.

Main tax obligations as a tax resident

Annual income tax return

You must file an income tax return if you exceed the thresholds defined each year in UVT, related to:

• Income
  
  
• Assets
  
  
• Credit card expenses
  
  
• Bank deposits
  
  

The return is filed as a resident individual and must include income from all over the world, not only from Colombia.

Report of foreign assets

If, as of January 1, your assets outside Colombia exceed 2,000 UVT, you must file Form 160 – Foreign Assets.

This report is informative, but mandatory, and includes:

• Bank accounts
  
  
• Real estate
  
  
• Investments
  
  
• Equity interests
  
  
• Other assets abroad
  
  

Failure to file can generate significant penalties, even if there is no tax to be paid.

Taxation of foreign income

As a tax resident, your foreign income must also be reported in Colombia:

• Salaries
  
  
• Pensions
  
  
• Rental income
  
  
• Interest
  
  
• Dividends
  
  

To avoid double taxation, Colombia allows you to credit taxes paid abroad, and in some cases apply double taxation treaties.

Pensions: a key advantage

Colombia offers an important benefit for foreign and Colombian pensioners:

Pensions are exempt from income tax in Colombia up to 1,000 UVT per month (12,000 UVT per year).

Only the amount exceeding that threshold is taxed.

This means that many pensions are fully or partially exempt, making Colombia an attractive destination for retirees.

Common risks we see in practice

Poorly managed double taxation

Especially common among U.S. persons, where citizenship creates permanent tax obligations.

Lack of understanding of UVT thresholds

Many foreigners believe they “don’t earn that much,” but once amounts are converted to Colombian pesos, they exceed the thresholds.

Failure to report foreign assets

One of the most frequently sanctioned mistakes.

Late filing or failure to file

Penalties for late filing or non-filing can be high, even if no tax is owed.

Practical advice before and after moving

• Plan the timing of your arrival to properly manage the 183-day rule
  
  
• Review pending obligations in your country of origin before changing tax residency
  
  
• Update your RUT and obtain a digital signature in Colombia
  
  
• Keep records of taxes paid abroad
  
  
• Review your asset structure before becoming a tax resident
  
  
• Do not assume that “no one will notice”: today, information is automatically cross-checked
  
  

Conclusion for individuals

Changing your tax residency to Colombia is not just a formality; it is a structural change in your relationship with taxes.

When well planned, it can be perfectly manageable and even efficient.

When poorly managed, it can lead to penalties, double taxation, and unnecessary problems.

We are reaching times of the year when many people:

• Move permanently
  
  
• Reorganize their financial life
  
  
• Change accountants
  
  
• Adjust their tax planning
  
  

That is the ideal moment to review your tax situation in advance, before the DIAN does it for you.

👉 At Nexo, we support foreign individuals throughout this process, helping them understand, plan, and correctly comply with their change of tax residency in Colombia.

A timely review can make all the difference.