Legal Considerations

Legal Considerations In Colombia

 

There are five main areas of law that entrepreneurs should be familiar with to do business in Colombia:

 

  1. Immigration 

Visa requirements and options

 

  1. Intellectual Property Protection

Registration for copyrights, trademarks, designs/models, and patents

 

  1. Forms of Business Organizations

SA Corporation, SAS Corporation, Limited Liability Company, Branch of Foreign Company

 

  1. International Trade

Requirements for imports and exports

 

  1. Taxation

Business and individual taxes

 

 

Immigration

A visa to enter Colombia may or may not be required depending on the length of visit, the purpose of visit, and the country of citizenship.

 

[Map with countries highlighted]

 

Visa is requiredVisa is not requiered
-Length: more than 90 days.

-Purpose: study or work.

-Citizens of countries not listed above.
  • Length: less than 90 days
  • Purpose: tourism, temporary visit
  • Citizens of the following countries:

    Andorra, Antigua and Barbuda, Argentina, Australia, Austria, Bahamas, Barbados, Belgium, Belize, Bhutan, Bolivia, Brazil, Brunei-Darussalam, Canada, Czech Republic, Chile, Cyprus, Costa Rica, Croatia, Denmark, Dominica, Dominican Republic, Ecuador, El Salvador, Estonia, Fiji, Finland, France, Germany, Granada, Greece, Guatemala, Guyana, Honduras, Hong Kong (SAR-China), Hungary, Indonesia, Ireland, Island, Islas Marshall, Israel, Italy, Jamaica, Japan, Latvia, Liechtenstein, Lithuania, Luxemburg, Malaysia, Malta, Mexico, Micronesia, Monaco, Norway, Netherlands, New Zealand, Palau, Panama, Papua New Guinea, Paraguay, Peru, Poland, Portugal, Romania, Russia, Saint Kits and Nevis, Samoa, San Marino, Saint Lucia, Saint Vincent and the Grenadines, Singapore, Slovakia, Slovenia, Solomon Islands, South Africa, South Korea, Spain, Sweden, Switzerland, Surinam, Taiwan, The Philippines, Trinidad and Tobago, Turkey, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United States of America, Uruguay, Vatican City and Venezuela.
  •  

     

    Visa Options

     

    For foreign entrepreneurs, four types of business visas are available:

     

    1. Business Visa
    2. Colombia Business Associate/Business Owner Visa
    3. Colombia Work Visa
    4. Colombia Investors Visa

     

    All necessary documents for visa can be submitted to a Colombian Consulate abroad, or the Ministerio de Relaciones Exteriores in Bogota.

     

    Visa typeBusiness visa
    Criteria
  • Worker of foreign company.
  • To engage in meetings, do consulting work, carry business activities in Colombia.
  • Not legally working in Colombia because paycheck came from foreign company.
  • Term: 4 years; multiple entries, maximum stay of 2 years per entry
  • How to apply
  • Submit visa application, Form FO-67 DP [http://www.
    cancilleria.gov.co/sites/default/files/4700.pdf] (must be signed by the applicant, not by foreign intermediary).
  • 2 identical recent photographs, 3x3 cm in white background.
  • A passport with at least 2 blank pages and valid for at least 3 months.
  • A photocopy of the main page of passport and pages with previous Colombian stamps.
  • Original letter from employer presenting the employee with the following information: applicant’s position in the company, time working for the company, purpose of the trip, and length of visit. The letter must state the responsibility of the company to cover all the expenses and the return of the applicant to his/her place of residence.
  • Certification of incorporation or legal representation of the company.
  • Letter from the company/client in Colombia confirming the meeting; must be signed and dated.
  • FeeVisa: 200 USD Application: 50 USD.

     

    Reference: http://www.samspassport.com/visa/colombia.shtml

    http://www.consuladodecolombiany.com/index.php?option=com_content&view=article&id=409&Itemid=243

     

    Visa typeColombia Business Associate/Business Owner Visa
    CriteriaFor foreigners starting a new business in Colombia, or Purchasing a business in Colombia
    How to apply
  • Submit visa application, Form FO-67 DP [http://www.
    cancilleria.gov.co/sites/default/files/4700.pdf] (must be signed by the applicant, not by foreign intermediary).
  • 2 identical recent photographs, 3x3 cm in white background.
  • A passport with at least 2 blank pages and valid for at least 3 months.
  • A photocopy of the main page of passport and pages with previous Colombian stamps.
  • The Original Certificate of Existence and Legal Representation issued by the Chamber of Commerce - of the city where the company was incorporated issued no more than 90 days beforehand which states that the foreigner is a partner or owner of the registered establishment, indicating a capital or registered fixed assets of the foreign applicant, for no less than 100 legal monthly salaries in effect in Colombia.
  • For a corporation, the applicant must provide an original of the certificate of the operating composition subscribed by the auditor, indicating the value of the shares owned by the foreign applicant, which cannot be less than 100 legal monthly salaries in effect in Colombia.
  • Fee
  • Consular Visa + Consular Doc Review Fee: 175 USD + 50 USD
  • Professional Immigration Services: 359 USD/ 649.000 COP
  • Apostille, Translation, Legalization: 65 USD to 95 USD/ 117.000 COP to 171.000 COP
  • Messenger, Mail, Notary: 20 USD to 100 USD/ 36.000 COP to 180.000 COP
  •  

    Visa typeColombia Work Visa
    Criteria
  • Intend to live in Colombia.
  • Work directly for a Colombian corporation.
  • How to applyFor the Colombian Consulate:

  • Submit visa application, Form FO-67 DP [http://www.
    cancilleria.gov.co/sites/default/files/4700.pdf] (must be signed by the applicant, not by foreign intermediary).
  • 2 identical recent photographs, 3x3 cm in white background.
  • A passport with at least 2 blank pages and valid for at least 3 months.
  • A photocopy of the main page of passport and pages with previous Colombian stamps.
  • Notarized Resumen de Contrato signed by you and your boss.
  • Original letter from employer presenting the employee with the following information: applicant’s position in the company, time working for the company, purpose of the trip, and length of visit. The letter must state the responsibility of the company to cover all the expenses and the return of the applicant to his/her place of residence.
  • A photocopy of the Declaración de Renta from work.
  • A Certificado de Cámara de Comercio for work.

    For the Colombian Immigration (DAS): Apply for Cedula de Extranjería (Colombian national ID for foreigners)

  • Passport and visa.
  • 3 cédula photos on blue background.
  • 2 photocopies of your visa.
  • 2 photocopies of your passport and all pages with Colombian stamps.
  • Proof of your blood type.
  • FeeVisa: 225 USD Cédula de Extranjería: 77 USD/ 144.250 COP

     

    Reference: http://www.southamericaliving.com/how-to-obtain-a-colombian-work-visa/

     

    Visa typeColombia Investors Visa
    Criteria
  • Businessmen or investors.
  • Registered foreign investment capability of 100,000 USD.
  • Investment must be made in purchase of shares under the name of foreign applicant applying for the visa.
  • How to apply
  • Submit visa application, Form FO-67 DP [http://www.
    cancilleria.gov.co/sites/default/files/4700.pdf] (must be signed by the applicant, not by foreign intermediary).
  • 2 identical recent photographs, 3x3 cm in white background.
  • A passport with at least 2 blank pages and valid for at least 3 months.
  • A photocopy of the main page of passport and pages with previous Colombian stamps.
  • Original certificate issued by the Department of Foreign Exchange of the "Banco de la República" confirming the record of the direct foreign investment on the name of the foreigner visa applicant.
  • Fee
  • Consular Visa + Consular Doc Review Fee: 450 USD + 50 USD.
  • Visa Study Professional Immigration Services: 365 USD/ 657.000 COP.
  • Open Financial Account: 220 USD/395.000 COP.
  • Apostille, Translation, Legalization: Varies.
  • Messaging, Mali, Notary: 20USD to 100 USD/ 36.000 COP to 180.000 COP.
  •  

    Reference: http://www.investincolombia.com.co/images/Legal_Guide_to_Doing_Business_in_Colombia_2012_Chapter_6.pdf

    http://www.investincolombia.com.co/how-to-invest/visas.html

    http://www.cancilleria.gov.co/sites/default/files/visas-version-ingles_1.pdf

    http://www.colombiabusinessvisa.com/

    http://miami.consulado.gov.co/es/services/abroad/visas

    http://colombia.visahq.com

     

     

    Intellectual Property Protection

     

    Copyrights

     

    Copyright gives credits and exclusive rights to the creator of the original work for a limited time.  The copyright holder can determine the usage and adaption of his/her work.

     

    Registration of copyrights depends on the type of work: published literary work, unpublished literary work, audiovisual work, musical work, art work.

     

    Filing Requirement
  • Registration application form.
  • Submit original work.
  • RenewalN/A
    Time GrantedThe life of the author plus 80 years.

     

    Reference: http://www.derechodeautor.gov.co/

     

     

    Trademarks

     

    A trademark refers to a recognizable symbol, design, or expression that identifies with a product, service, or company as a whole.  A trademark owner can prevent unauthorized use of the trademark.

     

    Filing Requirement
  • Power of attorney notarized and legalized by the Colombian Consulate.
  • Certified copy of the certificate of incorporation or any equivalent document, notarized and legalized up to the Colombian Consulate.
  • Certified copy of the priority document duly notarized and legalized up to the Colombian Consulate.
  • 20 prints of the trademark.
  • Details of the trademark.
  • Time Granted10 Years from the date of application.
    Renewal10 Years.

     

    Designs/Models

     

    A design/model refers to the appearance of the product in two or three-dimension.  The design/model must be new and has not been made public. The right-holder can prevent unauthorized production and marketing of the design/model.

     

    Filing Requirement
  • Application form.
  • Power of attorney.
  • Receipt of payment for official fees.
  • An indication of the kind of products which would use the industrial design.
  • International classification.
  • Locarno Agreement.
  • Graphic presentation of the design.
  • As the case may be, a copy of assignment document from the designer to the applicant.
  • A copy of every application for registration of the industrial design or any other protection certificate that would have been filed or obtained abroad by the same applicant, if any;
  • Time Granted10 Years from the date of application.
    RenewalNon-renewable.

     

    Patents

     

    A patent gives exclusive rights to the inventor of a product or process for a limited time.  In exchange, the state can disclose the invention to the public.

     

    Filing Requirement
  • Application signed by registered attorney.
  • Power of attorney.
  • Title of invention with descriptions and drawings (if any); class of the international nomenclature to which it belong; one or more claims as to novelty, inventive step and industrial application of the invention; and a summary of the application comprising at least one characteristic claim.
  • A copy of the first corresponding foreign application, only when priority is claimed.
  • Receipt of payment for filing fee.
  • Date concerning identification of applicant or the person filing the application that allows the Patent Office to communicate with such person.
  • Time Granted20 Years from the date of application.
    RenewalN/A

     

    Reference: http://www.inventa.com/colombia

    http://www.iered.org/miembros/ulises/representacion-ideas/Derechos-Autor/propiedad_intelectual_en_la_legislacin_colombiana.html

    http://uk.practicallaw.com/3-530-2345?service=crossborder#a487384

     

    Forms of Business Organization

     

    The type of incorporation you choose will dictate the liability, tax benefits, and investment that your company can have.  In Colombia, there are four major forms:

     

    1. SA Corporation
    2. SAS Corporation
    3. Limited Liability Company (Ltda.)
    4. Branch of a Foreign Company

     

    SA Corporation

    Sociedad Anónima

     

    Features
  • Minimum of 5 shareholders.
  • A shareholder cannot own 95% or more of the contributed shares.
  • Must have a board of directors.
  • Must have a legal representative.
  • Must have a statutory auditor.
  • LiabilityShareholders are liable up to the amount of their capital contributions, except for tax and labor liabilities.
    TaxationSubject to worldwide income tax.
    Investment
  • May issue common and preferred shares and ordinary or compulsory convertible bonds.
  • Shares are divided into equal value.
  • Shares are classified as authorized or stated capital, subscribed capital, or paid-in capital.
  • Company shares can be traded in the stock exchange.
  • No minimum capital required for incorporation.
  •  

    SAS Corporation

    Sociedad por Acciones Simplificada (Simplified Stock Corporation)

     

    Features
  • Minimum of 1 shareholder.
  • Distinct legal entity independent of its shareholder(s).
  • No need for board of directors.
  • Shareholders could directly implement decisions.
  • Flexible capital structure.
  • Simplified incorporation process; no public deed required.
  • Supervision by the Companies.
  • Superintendence if it is monitored by other Superintendence and assets/revenues are greater than 30,000 minimum legal wages.
  • May have a board of directors.
  • Must have a legal representative.
  • May have a statutory auditor.
  • Liability
  • Shareholders are liable up to the amount of their capital contributions.
  • Never liable for tax or labor obligations.
  • Full-fledged limited liability.
  • Taxation
  • Subject to worldwide income tax.
  • Investment
  • Company shares cannot be traded in the stock exchange.
  • Equity of SAS is independent of shareholders’ equity.
  • No minimum or maximum share capital.
  •  

    Limited Liability Company (Ltda.)

    Sociedad de Responsabilidad Limitada

     

    Features
  • 2 to 25 partners.
  • Management by board of partners.
  • Banks, insurance companies, and public utilities cannot be limited liability companies.
  • May have a board of directors.
  • May have a legal representative.
  • May have a statutory auditor depending on company income.
  • Liability
  • Partners are liable up to the amount of their capital contributions.
  • Taxation
  • Partners are jointly liable for all income tax obligations.
  • Investment
  • No minimum capital required for incorporation.
  • May issue bonds exclusively through a trust company.
  • Company shares cannot be traded in the stock exchange.
  •  

    Branch of a Foreign Company

     

    Features
  • Foreign company establishes permanent activities in Colombia (ie. offices, commercial establishments).
  • Not considered an independent legal entity, but an extension of the home office (an offshore entity).
  • Managed by corporate body of the home office unless delegated to legal representative in Colombia.
  • Limited decision-making in Colombia.
  • Compensation account that works as a reciprocal account between the branch and its foreign parent.
  • Must have a legal representative in Colombia.
  • Must have a statutory auditor.
  • Liability
  • Responsible for all liabilities incurred by the branch in Colombia.
  • Taxation
  • Subject to tax on Colombian-source income.
  • Investment
  • No minimum capital required for incorporation.
  •  

    How to Incorporate

     

     

    Reference:

    http://www.ccb.org.co/contenido/contenido.aspx?catID=132&conID=4232

    http://www.kpmg.com/CO/es/IssuesAndInsights/ArticlesPublications/Documents/Doing_Business_in_Colombia.pdf

    http://www.frfirm.com/files/lcuervo%20-%2004-02-09%20-%20S5DRQPT.pdf

    http://www.diazreus.com/news-articles-setup-foreign-business-in-colombia.html

    http://www.investincolombia.com.co/how-to-invest/steps-to-establish-your-company/creating-a-foreign-company-branch.html

    http://www.bakermckenzie.com/files/Uploads/Documents/LATAX%202010/09_General%20Publications/db_04_colombia.pdf

    http://www.mondaq.com/x/2826/Audit/Choice+Of+Business+Entity+In+Colombia

    http://www.doingbusiness.org/data/exploreeconomies/colombia/starting-a-business

    http://www.ghy.com/Doing_Business_Colombia_2011_English_Version_FINAL_26042011.pdf

     

     

    International Trade

     

    Imports

     

    [Chart of top countries importing to Colombia]

     

    1. Register as an importer at the Chamber of Commerce
    2. Find the location of the tariff sub-regime

     

    Two methods:

     

     

    Note: DIAN is the only authorized entity to determine tariff classification

     

     

      1. Identify the product
          • Verify the tariff sub-regime to determine the custom tributes (tariff burden, sales tax, IVA) and other requirements

         

          • *Determine if the product is subject to approvals with organizations like CA, INVIMA, the ministries of Mines, Environment, Transport, Agriculture, the Superintendence of Monitoring and Private Security, the Superintendence of Industry and Commerce, Ingeominas

         

          • If the product is not subject to any prior requirements, authorization of import registry is not required

         

        • For trading of goods, the company must:
          • Enroll in the Chamber of Commerce
          • Request a Unique Tax Registry Number (RUT – Registro Unico Tributario)
          • Request a Number of Tax Identification (NIT) with the DIAN

     

    1. *Complete the Registry of Import if required (refer to step 3)

     

    For goods valued greater than 1000 USD
  • Obtain a digital signature before an authorized organization from the Supervision of Industry and Commerce (CERTICAMARA).
  • Enroll in the Operations Group at registro@micomercio.gov.co. The Ministry of Trade, Industry, and Tourism will email your username and password.
  • Register in the DIPS system
    Go to www.vuce.gov.co, then Imports module and make a payment.
  • For goods valued less than 1000 USDEnroll in the Operations Group (Calle 28 # 13 – 15, local 3), Chamber of Commerce, and RUT.b) Obtain signature of Company Conditions Use in the operations group. A password will be emailed to you.c) Elaboration of the registry of import through the VUCE System at www.vuce.gov.co.d) Payment of Registry of electronic import.

    Note: The Importer who uses a customs agency, or a special proxy to obtain the Registry of Import, must submit an authenticated power with the Conditions of Use to VUCE at 28 Street # 13-15, Building 3.

     

     

      1. Import Exchange
        • Wire abroad currencies for the payment of import
        • If transaction is over the FOB value of 10,000 USD, the financial intermediary must notify the Bank of Republic, and Form No. 6 (given by the bank) must be completed
        • Submit Exchange Declaration No. 1 Form to an exchange intermediary

     

    2.Determine the icoterm,  a set of three-letter standard trade terms most commonly used in international contracts for the sale of goods

     

    3. Process of nationalization 

        • For goods valued 5,000 USD or more, the Andean Value Declaration is required at Customs
        • Liquidation of Customs Tributes (Tariff Burden, VAT) is done via the Declaration of Import
        • Payment of taxes is done through financial intermediaries at Customs
        • The following people can go directly to the DIAN:
          1. Legal entities who make individually imports not surpassing the FOB value of a thousand American dollars (USD 1,000) and who will act personally and directly via a power of attorney or through their legal representatives before the DIAN.
          2. Individuals whose individual imports do not surpass the FOB value of 1,000 USD acting directly and personally before the DIAN.
          3. Travelers.
        • A custom agency is required if imports is over 1,000 USD
        • To pick up the merchandise, present the following documents to the Customs Agent at the Customs Deposit Center:
          1. Commercial Invoice
          2. Registry or License of Import, if required
          3. Declaration of Import
          4. Andean Declaration of the Value in Customs, if required
          5. Packing List
          6. Certificate of Origin
          7. Document of Transportation
          8. Other certifications or approvals, if required

     

    Reference: http://www.dian.gov.co/DIAN/15Servicios.nsf/cb0b582428cd50c605256fe4007ea157/6e355c9c4924739f052570ff00746af1?OpenDocument

    http://www.vuce.gov.co

    https://www.mincomercio.gov.co/englishmin/publicaciones.php?id=654

     

    Exports

     

    [Chart of top countries exporting to Colombia]

     

    1. Register as an exporter at the Chamber of Commerce
    2. Find the location of the tariff sub-regime

     

    Two methods:

     

     

    Note: DIAN is the only authorized entity to determine tariff classification

     

    1. Procedure with Ministry of Trade, Industry and Tourism
      • Request a Determination of Origin – Judicial Declaration
      • Request a Certificate of Origin
        • Go to www.vuce.gov.co, then Exports module.
        • The following code is used for each certificate:

     

    CodeCountry
    250European Union, Oriental Europe, Japan, Canada
    251United States
    252European Union (for textile exports)
    253Andean and Aladi communities (Latin American countries including Cuba, except Argentina, Brazil and Uruguay)
    257Panama
    258Chile
    260Third Countries (not a member of the EU)
    271Caribbean community
    273Mercosur (Argentina, Brazil, Uruguay)

     

     

      1. Check if exports are subject to approvals/permissions from other organizations, such as:
        • ICA (animal and vegetable health)
        • INVIMA (cosmetics, medicines, and foods)
        • Ministry of Environment, Housing, and Territorial Development (preservation of native fauna and flora)
        • Secretariat of the Environment (woods and seeds)
        • Ingeominas (precious stones and metals, emeralds)
        • Ministry of Culture (art, culture, and archaeology)

     

    2. Custom procedures with the DIAN

     

        • Verify term of negotiation (Incoterms)
        • To determine if physical, automatic, or document inspection is required:
          • Request access key to DIAN’s information system for Request of Authorization for Boarding from the airport of Avda in Bogota
          • For export valued greater than 10,000, you must go through an agency of customs
          • Present documents:
            1. Trade invoice
            2. Packing list, if required
            3. Sanitary registrations or approvals, if required
            4. Transport document
            5. Other documents required
          • Once completed, the Certification of Boarding and Request of Authorization of Boarding then becomes the Declaration of Export (DEX)

     

    3. Determine type of payment

     

    • Examples: Guaranteed letter, letters of credit, standby guarantees
    • Contact Bancoldex advisers at Zeiky for further information

     

    4. Exchange procedures (refund of currencies)

     

    • To conduct sale of currencies , you must submit Declaration of Change No. 2 Form to exchange intermediaries

     

    Reference:

    https://www.mincomercio.gov.co/englishmin/publicaciones.php?id=645&dPrint=1

    http://export.gov/colombia/doingbusinessincolombia/traderegulationsstandards/index.asp

    http://www.investincolombia.com.co/Adjuntos/110_Chapter%203%20Foreign%20Trade%20and%20Customs%20Rules.pdf

    http://colombia.visahq.com/customs/

    http://trade.gov/publications/ita-newsletter/0411/colombia.asp

     

    Taxation

     

    Colombian tax authority is called Dirección de Impuestos y Aduanas Nacionales de Colombia, or DIAN.  The tax year is the calendar year.

     

     

    Business Taxation

     

    A firm is considered a tax-resident business if it meets one of the following conditions:

    • Domiciled in Colombia
    • Established under the laws of Colombia
    • Management is in Colombia

     

    Common taxes for businesses include:

    • Corporate Income Tax
    • Capital Gain Tax
    • Value Added Tax (VAT)
    • Financial Transaction Tax

     

    Corporate Income Tax
    National tax on profits and gains from ordinary income.
  • Colombian companies are taxed on worldwide income, which includes gains from the sale of stock of foreign corporations.
  • Foreign companies are taxed only on their Colombian-source income, which include:
    Profits from Colombian companies.
    Transfer/exploitation of tangible and intangible goods in Colombia.
    Transfers of goods produced in Colombia.
    Services in Colombia.
    Technical and consulting services within or outside Colombia.
  • A rate of 25% applies to all Colombian firms and branches of foreign companies (2013).
  • A reduced rate of 15% applies to companies located in a free-trade zone:
    Atlantico
    Bolivar
    Guajira
    Magdalena
    Norte de Santander
    Santander
    Cundinamarca
    Antioquia
    Quindio
    Caldas
    Risaralda
    Huila
    Cauca
    Valle del Cauca
  • Special case: Small companies that started their activities in 2011 receive progress income tax rates:
    Year 0 to 1: 0%
    Year 3: 8.25%
    Year 4: 16.50%
    Year 5: 24.75%
    Year 6 onward: 33%
    Presumptive income does not apply for the first 5 years
  • Special case: Small companies domiciled and operate all their economic activities in the departments of Amazonas, Guainia, and Vaupes in 2011 receive special income tax rates:
    Year 0 to 8: 0%
    Year 9: 16.5%
    Year 10: 24.75%
    Year 11 onward: 33%
    Presumptive income does not apply for the first 10 years
  • A new income tax for equity (CREE) applies to special social projects:
    2013-2015: 9%
    2016 onward: 8%
  • Minimum presumptive tax
  • Capital Gain Tax
    Tax on extraordinary income, such as:

  • Sale of fixed assets
  • Excess of invested capital
  • Liquidation of legal entity
  • Trade of financial derivatives
  • Lotteries, raffles, and similar activities
  • Standard corporate tax of 10% from 2013
    Value Added Tax
    (VAT)Indirect national tax on supplies of goods and services by a taxable person in Colombia and on importation of goods into Colombia by any person
    Standard rate is 16%
    Financial Transaction Tax
    Tax from withdrawing resources from checking, deposit or saving accounts, and cashier checks
    Current rate is 0.4% of the value of the operation
  • 2014 to 2015: 0.2%
  • 2016 to 2017: 0.1%
  • 2018 onward: 0%
  •  

    Individual Taxation

     

    For tax purposes, an individual is considered a Colombian resident:

    • If he/she stays in Colombia for more than 6 months in the tax year (continuous or non-continuous)
    • If his/her family lives in Colombia even though the individual is outside the country
    • If his/her main place of business is in Colombia even though the individual is outside the country

     

     

    A salaried individual MUST file an income tax return if one of the following is met:

    • Employment income exceeds 4,073 UVT
    • Equity owned as of December 31st exceeds 4,500 UVT
    • Credit card charges during the taxable year exceed 2,800 UVT
    • Total value of cash purchases exceed 2,800 UVT
    • Total value of bank deposits and other investments during the taxable year exceed 4,500 UVT

     

    Note: A tax unit value, or UVT, is used instead of Colombian pesos to measure the limits and thresholds.  UVT is annually adjusted by retail price index.  As of 2012, 1 UVT = 26.049 COP.

     

    Common taxes for individuals include:

    • Personal income Tax
    • Net Wealth Tax
    • Social Security Contribution
    • Real Property Tax

     

    Personal Income Tax
    Tax on ordinary income of individuals
  • Colombian resident is taxed on world-wide income.
  • Nonresident is taxed only on Colombian-source income *also calculated by presumptive income.
  • At maximum of 33%
  • Nonformal employment contract is subject to 3.5%-10%
  • Net worth of 3 billion COP or more is subject to 1.2% of assets.
  • Net Wealth Tax
    Tax on assets valued over 1 billion COP in January 2011
    0% to 6%
    Social Security Contribution 4% of employee’s salary goes to pension and health contributions.
    Real Property Tax
    Municipal tax on the ownership, usufruct, or possession or real estate property.
  • Rate varies according to a band of 1 to 16 thousands.
  • Between 0.3% to 3.3%
  • Undeveloped plots of land may be subject to higher tax rates.
  •  

    Reference:

    http://taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/JDCN-89HS2C

    http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Taxation%20and%20Investment%20Guides/2011/dttl_tax_guide_2011_Colombia.pdf

    http://www.claytonmckervey.com/attach/worldwide-tax-guide-columbia.pdf

    http://www.knowyourcountry.com/columbia3.html

    http://www.col-law.com/userfiles/file/DG&A-Doing%20Business%20in%20Colombia.pdf

    http://www.investincolombia.com.co/how-to-invest/taxes.html

     

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