7. TAX REGIME
The Colombian tax system is composed of different taxes, where at the national level the Income Tax, both for corporations and individuals, VAT, GMF, among others, stand out. At the territorial level (departmental and municipal), there are multiple taxes that may vary according to the region, in some elements such as the rate, of which the ICA, the real estate tax (property tax), and some others that affect certain sectors such as the consumption of alcohol and tobacco, or state contracting, stand out. Below you will find the main aspects of this regime to be taken into account when considering investments in Colombia.
GUIDE TO INVEST IN COLOMBIA
Consult each of the chapters of the Legal Guide for doing business in Colombia 2024.
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What should you know about taxes in Colombia?
The competent authority is the National Tax and Customs Directorate (DIAN), and the primary legal framework is the Colombian Tax Code (Estatuto Tributario), which is periodically amended through tax reforms. For this reason, this page indicates the applicable year and refers users to the official sources for confirmation.
In addition to corporate income tax and VAT, companies should consider the Industry and Commerce Tax (ICA), a municipal tax whose rate varies by municipality; the Financial Transactions Tax (GMF, commonly known as the "4x1000" tax); and the occasional gains tax.
The standard Value Added Tax (VAT) rate is 19%. Reduced rates of 5% and 0% (for exempt goods and services) also apply depending on the type of good or service. Since tax treatment varies by industry, it is important to define your investment sector and consult a trusted tax advisor or statutory auditor.