TKEG Expat™ (Test) Colombia Corporate Tax Guide

Colombia imposes a general VAT rate of 19%. However, specific goods and services are taxed at a reduced rate of 5%, including products like corn for industrial use, raw palm oils, certain agricultural equipment, and electric or hybrid vehicles. Additionally, some goods and services such as meat, eggs, dairy products, exported goods, and biofuels for engines are taxed at 0%. VAT applies to both local and imported goods, depending on the type of product and service.

Property tax in Colombia is a municipal tax levied annually on real estate properties, whether improved or unimproved, located in urban, suburban, or rural areas. The taxable base is the property's cadastral value, often adjusted for inflation, and ranges between 0.5% and 1.2% depending on the property's nature and usage. In cities like Bogotá, the property tax base depends on the appraised value. This tax is deductible for Corporate Income Tax (CIT) purposes if it is linked to the income-generating activity of the property.

The general CIT rate in Colombia is 35%. A 5% additional surcharge applies to financial institutions (including insurance, reinsurance, and securities brokers) with taxable income of 120,000+ UVT, effective through 2027. Oil and coal extractors face a 5–15% surtax tied to commodity prices. A 3% temporary surcharge applies to hydro-electric power companies (FY 2023–2026). From FY 2023, a Minimum Effective Tax Rate (METR) of 15% applies to resident corporations under OECD Pillar II rules. The general capital gains tax rate is 15% (increased from 10% since FY 2023). CIT returns are due between April and May, with large taxpayers paying in 3 installments and other taxpayers in 2.

Colombia imposes a progressive personal income tax with a top rate of 39%. The tax return deadlines are determined based on the last two digits of a taxpayer's tax ID number, typically starting in August and extending through October for the previous year's taxes. The final payment for PIT is due upon the filing of the return, with no estimated payments required.

Colombia applies a permanent financial transactions tax at a rate of 0.4% on financial transactions involving the disposal of resources in checking and savings accounts or deposit accounts with the Central Bank (Banco de la República). This tax applies to financial transactions carried out by regulated financial institutions and is partially deductible for CIT purposes. Several transactions are exempt from this tax, including specific operations outlined by law.