General information about taxation in Colombia

Colombia, like any other emerging economy, is facing an increasingly competitive international economic environment, characterized by the several advantages offered to foreign investors on taxes and incentives.

Taxes in Colombia can be of the National level or the regional level. This means that the National taxes will be applicable to all the inhabitants of the national territory with the same tariff, mean while taxes, regional taxes will be determined within a range determined by law, this range has a maximum and minimum tariff which regions cannot surpass. Here is brief description of the most important taxes:

Income and Windfall Tax	The income tax in Colombia is a national tax and it is considered a single tax, although it has two components: income and windfall.	33%
Sales Tax (VAT)	This is a national tax on supplied serces and on sales and imports of physical goods.	Outside Free trade Zone: The average tariff - 16% can range between 0% and 25%.
Wealth Tax	This tax is payable by individual and corporate taxpayers whose net worth at January 1 of 2007 was equal to or more than COPS 3.000.000.000 (2007 base figure), equivalent to approximately US$ 1.3 million, based on a $2,200 rate of exchange for 2009.	The yearly tariff is 1.2%
Tax on Financial Transactions	The tax is accrued on every transaction aimed at withdrawing resources from checking, deposit or savings accounts, and cashier´´ checks.	Four per thousand (0.004%) of the financial operation value.
Industry and Commerce Tax	This tax is levied on industrial, commercial or service activities carried out within the jurisdiction of a municipality or district by a taxpayer with or without a business establishment, and it is collected and managed by the municipality or district where the activity is carried out.	Ranges between 2 per thousand (0,2%) and 10 per thousand (1%)
Property Tax	This tax in Colombia is levied anually on the ownership, usufruct or possession of real estate property located in Colombia, and it is collected and managed by the municipallity where the property is located.	Ranges between 1 per thousand (0,1%) and 16 per thousand (1,6%)

For further information about Taxes in Colombia please download the Chapter of our Legal Frame Work about the subject. In that document you will find detailed information about deduction, discounts and other. Visit the following document to get more information on taxes.