Colombia legal and accounting and tax considerations in 2024

Tax and legal obligations for Colombia company

  1. Corporate tax in Colombia is imposed at a standard rate of 25% for resident companies. All legal entities must register with the National Tax and Customs Office (DIAN) and file annual tax returns by April/May of the year following the end of the tax year;
  2. Branches of foreign companies established in Colombia are subject to a branch tax rate of 33%;
  3. A capital gains tax of 10% is only chargeable on the sale of assets possessed for more than two years;
  4. The Value Added Tax (VAT) in Colombia is levied at a standard rate of 16%. Companies must register for VAT and file returns on a monthly basis. However, companies with less annual sales may report on a quarterly or annual basis;
  5. Withholding tax on dividends is applicable at the rate of i) 33% on dividends paid to foreign companies ii) 20% on dividends paid to resident companies, unless the income from which the dividends are paid had previously been taxed at the corporate level;
  6. A 14% withholding tax is applicable on interests remitted to non-resident companies. A higher rate of 33% is applicable where the loan period is below one year;
  7. Other withholding taxes in Colombia include i) 33% withholding tax on royalties paid non-resident companies ii) 10% withholding tax on technical services fees iii) 33% branch remittance tax on remittances abroad;
  8. Employers in Colombia are subject to i) 9% monthly payroll tax contribution ii) social security contribution at 8% for health insurance and 12% for the pension scheme;
  9. Colombia has blacklisted about 44 countries as low-tax jurisdictions including Hong Kong, Dominica, Liechtenstein, Angola, Seychelles, Isle of Man, Cyprus, Bahrain among others;
  10. Business losses in Colombia can be carried forward indefinitely, however a carryback of losses is not permitted;
  11. Colombia has so far only concluded 7 double tax treaties with other countries including Canada, Chile, Argentina, Mexico, USA among others;
  12. Healy Consultants will assist the Client with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
  13. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations;
  14. Every foreign individual must secure a Colombian ID (cedula) and tax number (RUT) before we can appoint him/her as the bank signatory to a Colombian corporate bank account. It takes up to 6 weeks to secure the a cedula and RUT and an additional 3 weeks to secure the new company extract from the Chamber of Commerce before bank signatory appointment;
  15. In Jan 2022, the corporate income tax rate for domestic companies will be increasing from 30% to 35% . See this link and this link;
  16. All Colombian entities are required to pay a monthly municipality tax to the local City Council where they are registered. This tax varies month on month and is established depending on the City’s budget. Average monthly municipality fees range from US$12 to US$20.

Contact us

For additional information on our accounting and tax services in Colombia, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
Guide to invest in Colombia free trade zone banco central de colombia Colombia's Minister of Trade, Industry and Tourism colombia government website Colombia's Ministry of Foreign Affairs - visa application