Tax season as a foreigner in Colombia can be overwhelming, and any expats, living in the country full-time or owning businesses or properties here, often struggle with deadlines, expatriates taxes, legal requirements, and obligations. Unlike in the U.S., where tax season follows a familiar schedule, Colombia has its tax calendar and regulations, managed by the DIAN (Dirección de Impuestos y Aduanas Nacionales).
If you’re an American expat living in Colombia or own assets, understanding how expatriates taxes work is crucial to avoid fines and ensure compliance. In this guide, we’ll break down what you need to know about tax season in Colombia, key deadlines, and how Gutierrez Group can help you stay ahead of the game.
Why expats in Colombia need to pay attention
Who needs to file taxes in Colombia?
Many foreigners assume they only need to pay taxes in their home country, but if you meet Colombia’s tax residency criteria, you may have to file local taxes as well.
You are considered a Colombian tax resident if:
– If you spend 183 days or more in Colombia within 365 days (these don’t have to be consecutive).
– You earn income in Colombia from a job, rental property, or business.
– As an owner of assets in Colombia that exceed 4,500 UVT (approx. $55,000 USD) and are required to file a patrimony tax declaration.
As a tax resident, you must report your global income, even if it was earned outside of Colombia. Non-residents, however, only pay taxes on Colombian-sourced income.
What taxes do expats need to pay in Colombia?
As an expat, you might be subject to several taxes, depending on your situation:
- Income Tax: Colombia has a progressive tax rate between 0% and 39% for individuals, depending on your income level.
- Wealth Tax: If you have high-value assets in Colombia, such as real estate or investments, you may be subject to patrimony tax.
- Capital Gains Tax: Selling a property or business? Capital gains in Colombia are taxed at 10%.
- VAT (IVA): If you run a business in Colombia, you may need to charge 19% VAT on goods and services.
Understanding these obligations is critical for staying compliant and avoiding hefty penalties from DIAN.
Key deadlines for expats in Colombia
Unlike the U.S. tax deadline (April 15), Colombia’s tax season varies each year and is based on your income level and tax ID (NIT).
- Income Tax Filings: Usually from August to October, based on the last two digits of your NIT.
- VAT (IVA) Declarations: Filed quarterly or bi-monthly, depending on your revenue.
- Wealth Tax: Deadline typically falls in September for high-net-worth individuals.
- Local & Business Taxes: Vary by city but typically annually in the first quarter.
Failure to file taxes on time can result in penalties of up to 200% of the tax owed, plus interest charges. Hiring a tax advisor can ensure you never miss an important deadline.
Common mistakes expats make with taxes in Colombia
Assuming they don’t have to file
Even if you don’t earn money in Colombia, owning assets or staying too long in the country might require you to file taxes. Many expats only realize this after receiving a penalty notice from DIAN.
Not declaring foreign income
Being a tax resident, Colombia taxes worldwide income. Failing to report foreign earnings can result in audits, fines, or even legal consequences.
Misunderstanding double taxation agreements
Colombia has tax treaties with the U.S. and other countries to prevent double taxation. However, you must file correctly to benefit from these agreements.
Skipping tax planning
Many foreigners overpay taxes because they don’t optimize deductions or exemptions available to them.
How Gutierrez Group helps expats with tax compliance
Navigating expatriates taxes in Colombia is complex, especially if you don’t speak Spanish or aren’t familiar with DIAN’s processes. That’s where Gutierrez Group comes in.
Full-service tax assistance for expats
Our team of bilingual tax experts ensures that your taxes are filed accurately and on time—so you never have to deal with DIAN penalties.
Tax planning & strategy
We help optimize your tax payments, ensuring that you benefit from deductions and tax treaties to reduce your liabilities.
Compliance for expats with businesses
If you own a business, we handle VAT, payroll taxes, and corporate filings so you can focus on growing your company.
Ongoing support & representation
We act as your direct liaison with DIAN, handling audits, responding to tax inquiries, and ensuring total compliance.
With 2000+ expat clients trusting us to manage their taxes in Colombia, Gutierrez Group makes sure you stay compliant while enjoying the benefits of living or investing in the country.
Conclusion
Understanding expatriates taxes is crucial for avoiding penalties and making the most of your financial situation in Colombia. Whether you live, work, or invest in the country, you need a clear tax strategy to ensure compliance with DIAN’s regulations.
With expert guidance from Gutierrez Group, you can confidently manage your taxes, focus on your business or investments, and enjoy all the benefits Colombia has to offer.
Need help filing your taxes in Colombia? Contact Gutierrez Group today for expert tax assistance tailored to expats!
