deductions applicable to employees are capped to 40% of gross income less contributions to mandatory Social Security System. In any case, deductions and exemptions cannot exceed the annual amount of UVT1,340.
Taxable income reductions. Specific reductions and benefits are applicable for each basket income. The main items are described below.
Employment income. Mandatory contributions to health and pension systems decrease taxable income. Twenty-five percent of employment income is exempt up to UVT790 per year. Exemptions and deductions applicable to employees (including such 25%) are capped at 40% of gross income less contributions to the mandatory Social Security System. In any case, deductions and exemptions cannot exceed the annual amount of UVT1,340 (approximately COP63,067,000 for 2024).
Deductions include economic dependents, payments to private health enterprises, interest and payments on loans for the acquisition of a taxpayer’s house, all of them with specific applicable thresholds.
Starting from 2020, a deduction was established with respect to interest paid to the Colombian Institute of Educational Credit and Technical Studies Abroad (Instituto Colombiano de Crédito Educativo y Estudios Técnicos en el Exterior, or ICETEX) for educational loans obtained by the taxpayer. This deduction may not exceed annually the amount equivalent to UVT100 (approximately COP4,707,000 for 2024).
Exemptions are related to voluntary contributions deposited in a Colombian pension fund and deposits in AFC Accounts (for housing construction promotion) opened in local commercial banks.
From 1 January 2023, there is an additional deduction in the general basket for dependents. This dependent equals UVT72 and is for up to four dependents. There is also a deduction of up to 1% of all kinds of payments made by individuals for the acquisition of goods or services supported by electronic invoices, capped to an annual amount of UVT240. These deductions are not subject to the limit of UVT1,340 mentioned above.
Under Colombian law, the following are tax dependents:
• An employee’s child who is under 18 years old
• An employee’s child who is between 18 and 25 years old and who is studying in an institution certified by the appropriate official authority in Colombia or abroad, provided that the employee pays the education fees
• An employee’s child who is 18 years old or older and whose dependence is related to physical or psychological factors, as certified by the appropriate official authority in Colombia or abroad
• Employee’s spouse, one parent or sibling, who is financially dependent on the employee and who receives income in an amount of less than UVT260 in the year, as certified by a Colombian-certified public accountant
• An employee’s spouse, one parent or sibling, whose dependence is related to physical or psychological factors, as certified by the appropriate official authority in Colombia or abroad
Capital income. Gross capital income (financial interest, royalties and rental income) can be reduced applying expenses that meet general requirements applicable to deductions (for example, property tax and interest paid on the acquisition of real property). Deductions and exemptions cannot exceed the annual amount of UVT1,340, including the total exemptions and deductions of the general basket.
Monthly tax rates. The following table sets forth the marginal withholding tax rates applicable to monthly employment income for the 2024 tax year.
(Taxable employment income expressed in UVT – UVT95) x 19%
(Taxable employment income expressed in UVT – UVT150) x 28% + UVT10
(Taxable employment income expressed in UVT – UVT360) x 33% + UVT69
(Taxable employment income expressed in UVT – UVT640) x 35% + UVT162
(Taxable employment income expressed in UVT – UVT945) x 37% + UVT268
(Taxable employment income expressed in UVT – UVT2,300) x 39% + UVT770
The base for applying withholding tax on employment income is 75% of such income after the subtraction of the mandatory and voluntary contributions to pension funds, deposits in AFC Accounts and the other deductions described above. This 25% exemption is limited to UVT790 per year. Deductions and exemptions cannot exceed 40% of the amount of the income less the mandatory contributions to the health and pension system and cannot exceed UVT1,340.
The income tax withholding rate for nonresident individuals is 20% on gross income.
Annual tax rates. The applicable annual income tax rates for resident individuals depend on the category of income.
The following are the applicable rates for residents on income reported in the general basket, pensions and dividends.
0 1,090 1,700 19 (Taxable income in UVT – UVT1,090) x 19% 1,700 4,100 28 (Taxable income in UVT – UVT1,700) x 28% + UVT116 4,100 8,670 33 (Taxable income in UVT – UVT4,100) x 33% + UVT788 8,670 18,970 35 (Taxable income in UVT – UVT8,670) x 35% + UVT2,296 18,970 31,000 37 (Taxable income in UVT – UVT18,970) x 37% + UVT5,901 31,000 39 (Taxable income in UVT – UVT31,000) x 39% + UVT10,352
The annual income tax rate for nonresident individuals is 35%.
Dividends distributed by a Colombian company are taxed according to the rules discussed below.
Dividends distributed to resident individuals out of profits that were taxed at the level of the distributing company are subject to rates from 0% to 39%, depending on the level of the income received.
For nonresidents, the applicable tax rate is 20%.
In addition, tax residents may take a tax discount of 19% on the value of dividends exceeding UVT1,090. The dividend withholding tax rates range from 0% to 15%, depending on the amount received.
Dividends distributed out of profits that were not subject to tax at the level of the distributing company are taxed at a rate of 35% (for 2024), regardless of whether the recipient of the dividend is an individual resident in Colombia or a nonresident, plus the dividend tax (0% to 39% for residents and 20% for nonresidents). In this case, the dividend tax should be applied to the amount of the dividends, reduced by the 35% tax (for 2024).
Dividends distributed by foreign companies are taxed in the same way as described in the last paragraph.
B. Estate and gift tax
A “capital gain” is unexpected income or profit from an extraordinary event, such as an extraordinary sale or winning a lottery or a raffle. An inheritance or legacy is deemed to be a “capital gain” if it is received by individuals other than the legal inheritors. Capital gains are taxed at a fixed rate of 15%. This rate is applied separately from the ordinary income.
For the 2024 tax year, the first UVT3,250 received as a gift or inheritance by spouses and legal heirs is exempt from tax. For inheritances or legacies received by individuals other than the legitimate heirs and spouse, as well as for donations, the exempt amount of the “capital gain” is 20% of the value received.
In addition, the first UVT13,000 for urban real estate and the first UVT6,500 for rural real estate received as a gift or inheritance by spouses and legal heirs is exempt from tax.
C. Social security
Employers and employees are subject to the following monthly social security contributions (calculated as percentages of salaries).
(a) Contributions to the health system and labor risks are mandatory for all employees. Under Law 1819 of 2016, companies, consortiums, free-trade zones and joint ventures that have not signed legal stability agreements, as well as trusts acting as employers, are exempted from paying the 8.5% health contribution for employees who earn less than 10 monthly legal minimum salaries per month, if they file income tax returns. One monthly legal minimum salary equals COP1.16 million for 2023.
(b) According to Article 15 of Law 100 of 1993 modified by Article 3 of Law 797 of 2003, foreign employees are considered as voluntary affiliates (not mandatory) to the social security pension system, whenever they have been covered by a foreign pension system and are paying actively a contribution for a pension who covers risks associated to retirement, disability and death. However, the Management Unit for Pension and Payroll Contributions (UGPP), the authority in charge of monitoring and reviewing the effective payment of social security and payroll tax contributions, is requesting the affiliation certificate to the pension system abroad, to foreigners who are not affiliated in Colombia but in a pension fund abroad, to be exempted from contributing to this system in Colombia. This certificate is an original document given by the pension entity in the home country stating that the assignee is affiliated to the pension system abroad and that the assignee is currently paying the contributions.
(c) An additional 1% contribution for pensions must be paid by employees who earn at least four monthly legal minimum salaries (COP4.6 million) per month. This rate will be increased by 0.2%, 0.4%, 0.6%, 0.8% or 1%, depending on the total amount of the salary (from 16 to 25 monthly minimum legal salaries).
(d) The contribution for labor risks ranges between 0.522% and 8.7% of the employee’s salary. It varies if the company is new or has been operating and according to the insured risk, which is based on the type of activity carried out by the employee.
The base on which these contributions are calculated is limited to the equivalent of 25 monthly legal minimum salaries (COP25 million) per month.
In addition to the above, employers must pay monthly payroll taxes equal to 9% of the salaries paid to their employees. These taxes are distributed in the following percentages among the following entities:
• Family Compensation Funds: 4%
• Colombian Family Welfare Institute (ICBF): 3%
• National Learning Service (SENA): 2%
The base for payroll taxes is not limited to 25 times the monthly legal minimum salaries as for social security.
For payroll tax calculation purposes, employers must consider only salary payments and paid rest days and exclude extralegal benefits, allowances and fringe benefits.
Companies that file income tax returns, consortiums and free trade zones, and joint ventures that have not signed legal stability agreements, as well as trusts acting as employers, are exempted from paying the payroll taxes that are allocable to the ICBF and the SENA with respect to the payroll of employees who earn less than 10 monthly legal minimum salaries. They continue to be obligated to pay payroll taxes designated to the Family Compensation Funds for these employees (4%).
Non-salary payments exceeding 40% of the employee’s monthly remuneration must be part of the base for contributions to the Social Security System (Pension, Health and Labor Risks) (Article 30, Law 1393 of 2010). This 40% limit does not apply for payroll taxes.
If the employee earns an integral salary (all-inclusive salary), social security contributions and payroll taxes are calculated based on 70% of such salary. For 2024, minimum integral salary is equivalent to COP16,900,000. This labor rule does not apply for the calculation of the income tax withholding. For income tax withholding purposes, the base is 100% of the taxable income, regardless of the type of salary (ordinary or all-inclusive).
D. Tax filing and payment procedures
The tax year is the calendar year.
Each year, the Colombian government establishes deadlines for filing income tax returns through the issuance of an Official Decree.
Usually, the tax-filing dates for individuals are between August and October of each year, according to the last two digits of the Colombian tax identification number.
An income tax return for the 2024 tax year must be filed if any of the following conditions is met by a tax resident:
• Gross assets or equity are equal to or higher than UVT4,500 (COP211,793,000) (for 2024).
• Annual gross income is equal to or higher than UVT1,400 (COP65,891,000) (for 2024).
• The total of purchases and consumptions is equal to or higher than UVT1,400 (COP65,891,000) during the year (for 2024).
• The total of consumptions with credit cards is equal to or higher than UVT1,400 (COP65,891,000) during the year (for 2024).
• Bank deposits or investments in Colombia are equal to or higher than UVT1,400 (COP65,891,000) during the year (for 2024).
Nonresidents must file a tax return if 100% of their total taxable income was not subject to local withholding tax at the nonresident rate (currently 20% on gross income). Additionally, nonresidents are required to file a return if they meet any of the last three requirements mentioned above for residents.
Individuals who are required to file tax returns must calculate and pay advance tax for the following tax year in accordance with the applicable rules under specific circumstances.
Married individuals are taxed separately, not jointly, on all types of income.
There is an audit benefit for the 2023 tax year for individuals who increase their net income tax by at least 25% as compared to the preceding year.
Typically, the tax authority could review income tax returns within three years. With this benefit, such term could be reduced to six months if there is an increase up to 35%. If there is an increase up to 25%, the term could be reduced to 12 months.
Report of assets held abroad. The report of assets held abroad is a tax obligation for resident individuals that entered into force as of 2015. Individuals must submit a report listing assets held outside Colombia if the assets have a value greater than UVT2,000 (COP94,130,000) for 2024, including the value of the assets, and the jurisdictions in which they are located.
E. Double tax relief and tax treaties
Taxpayers deemed tax residents who receive foreign-source income subject to income tax in the country of origin may apply a tax credit for the foreign tax paid in their income tax return, up to the amount of Colombian tax payable on the same income. As of the 2024 tax year, Colombia has entered into double tax treaties with Canada, Chile, the Czech Republic, France, India, Italy, Japan, Korea (South), Mexico, Portugal, Spain, Switzerland, the United Kingdom and the Andean Community member countries (Bolivia, Ecuador and Peru).
F. Entry visas
Decree 1067 of 2015, which has been in force since 26 May 2015, unifies Colombia’s immigration regulations. This decree establishes that all foreigners who are going to work or run a business in Colombia must apply for the corresponding visa. Resolution 5477 of July 2022 establishes the immigration requirements for each type of visa, replacing the previous Resolution 6045 of August 2017.
The Ministry of Foreign Affairs and the foreign consular offices may grant any type of visa. However, citizens of restricted nationalities must have a visa to enter Colombia. Visas can be requested electronically through the website of the country’s Ministry of Foreign Affairs.
Under Resolution 5488 of 22 July 2022, the following are the jurisdictions with unrestricted nationalities.
Albania Georgia Papua New Guinea
Andorra Germany Paraguay
Antigua and Greece Peru
Barbuda
Grenada
Philippines
Argentina Guatemala Poland
Australia Guyana
Portugal
Austria Honduras Qatar
Azerbaijan
Hungary
Romania
Bahamas Iceland Russian Federation
Barbados Indonesia St. Kitts and Nevis
Belgium Ireland Samoa
Belize
Israel
San Marino
Bhutan Italy Serbia
Bolivia Jamaica Singapore
Bosnia and Japan
Herzegovina Kazakhstan
Brazil
Korea (South)
Slovak Republic
Slovenia
Solomon Islands
Brunei Latvia Spain
Darussalam Liechtenstein St. Lucia
Bulgaria Lithuania St. Vincent and the Canada Luxembourg Grenadines
Chile Malta Suriname
Costa Rica
Marshall Islands Sweden
Croatia Mexico Switzerland
Cyprus
Micronesia
Trinidad and
Czech Republic Moldova Tobago
Denmark Monaco Türkiye
Dominica Montenegro Ukraine
Dominican Morocco
United Arab
Republic Netherlands Emirates
Ecuador New Zealand
El Salvador North Macedonia
United Kingdom
United States
Estonia Norway Uruguay
Fiji Oman Vatican City
Finland
Palau Venezuela
France Panama
The latest resolution includes the following jurisdictions:
• Morocco
• North Macedonia
• Oman
• Ukraine
Under the same resolution, citizens of Hong Kong and the Sovereign Military Order of Malta also do not need an entry visa.
Nationals from Cambodia, China Mainland, India, Myanmar, Nicaragua, Taiwan, Thailand and Vietnam may enter Colombia with an entry permit if they comply with one of the following requirements:
• They hold a residence permit in a Member State of the Schengen area or in the United States.
• They hold a visa from the Schengen area or the United States with a validity of at least six months at the time of arrival in Colombia.
For academic exchanges, the Colombian government does not consider the activities of teachers, scholars or researchers to be lucrative if foreigners receive air tickets and travel expenses from the academic institution or the organization that invites and receives them.
Nationals of Nicaragua who can certify they come from the Autonomous Regions of the South and North of the Caribbean Coast are also exempted from applying for a visa to enter Colombia.
entries and permits the holder to conduct studies. The visa is cancelled if the holder leaves Colombia for more than 180 consecutive days. It also allows for beneficiaries.
The employer must pay for the foreigner’s and his or her family’s travel expenses back to their jurisdiction or their last residence within 30 days after the end of his or her professional activities. If the foreigner decides not to use this benefit from the Colombian company, this company must report this to Migración Colombia. This needs to be reported within five working days after leaving the country.
Migrant Visa – MERCOSUR Agreement. This visa is valid for two years. Based on the Principle of Reciprocity, foreigners with nationalities from Argentina, Bolivia, Brazil, Ecuador, Paraguay, Peru and Uruguay can apply for this visa. The holder of this visa can perform any legal activity in Colombia, including employment activities, with a Colombian company, as a temporary service provider or as an independent contractor. After two years of holding this type of visa, it is possible to request the Resident (“R” type) Visa. It allows multiple entries, but it is not renewable. This visa allows beneficiaries.
For regulated professions (for example, engineering, accounting and economics), foreigners must request special permits or licenses from the competent Professional Council to practice their professions in Colombia. To obtain the permits or licenses, the foreigners must provide their diploma, legalized or apostilled and translated into Spanish by an official translator.
Resident (“R” type) Visa. A Resident Visa is granted to foreigners who want to settle permanently in Colombia. This visa is granted for five years. Foreigners holding this visa who leave the country for more than two continuous years will lose the validity of this visa. A Resident Visa holder can perform any legal activity. This visa allows beneficiaries.
A Resident Visa is granted to foreigners in the following types of cases:
• For previously renouncing Colombian nationality
• For accumulating legal residence time in Colombia
• For application of the Temporary Protection Status for Venezuelan Migrants
• For being a special resident of peace
Foreign Identification Card. Visa registration before the Administrative Unit of Migracion Colombia will be mandatory for all types of visas. Likewise, for visas with a duration of more than 90 days, the issuance of the Foreigner’s Identification Card will be mandatory (tourist and business visitor visas are exempted). Both processes must be carried out during the 15 calendar days following the issuance of the visa or the entry of the foreigner into the country. The Foreign Identification Card is the personal identification document within the country. Therefore, with this document, foreigners can have access to social security and other services, such as having a bank account.
Registration and deregistration of the visa, filed in the information system for reporting foreigners (Sistema de Información para el Reporte de Extranjeros, or SIRE) of Migración Colombia. Colombian companies must report the activities of their foreign employees