Most important taxes on companies in Colombia

Most important taxes on companies in Colombia

Colombia maintains a tax system according to the needs that it must cover as a State. Every citizen must pay the corresponding taxes through Colombian tax services, and, usually, they resort to the advice of a good Bogotá accounting firm, specifically a Bogotá accountant who advises them on the payment of taxes.

Most important taxes in Colombia

According to studies carried out by the Organization for Economic Cooperation and Development (OECD), Colombia has the ninth highest tax burden in Latin America. This means that the Colombian tax services that companies and citizens must comply with are extensive, highlighting the following:

Income and capital gains

They are national taxes. The occasional profit tax is 10% and refers to profits obtained from activities not classified as current. Examples of these are: the collection of inheritances, donations and legacies; life insurance claims; winnings from raffles, lotteries, bets and the like.

While the income tax has a rate of 35% and taxes the profits that come from the ordinary operations of a business organization.

Dividend taxation

Taxes 10% of the profits obtained by the company or permanent establishment. That is, when a company pays dividends to its shareholders, they must pay 10% of what they receive.

Consumption tax

This tax can vary between 4, 8 and 16%. It applies to the telecommunications, vehicle, beverage and food sectors. For example, if you buy a family vehicle for less than $30,000, the selling agency withholds 8% of the value, to deliver it to pay this tax.

Value Added Tax (VAT)

This indirect tax is levied on the provision of services, sale and import of goods. Its general rate is 19% and the special rates are between 0% and 5%. It is important to know that every time you buy any product, this tax will be added.

Tax on Financial Transactions

This tax corresponds to 0.4% and is applied to each transaction you make in savings and checking accounts.

Tax on Industry and Commerce

It is a tax that varies between 0.2% and 1.4%. It covers all commercial, industrial, and service activities carried out within a municipality or district.

Property tax

This is an annual tax to ensure the ownership of a real estate. Varies between 0.3% and 3.3%; being exclusive of the municipalities or districts.

Registration tax

It encumbers the documents, acts, or contracts that are registered in the Chamber of Commerce and public offices. It ranges from 0.1% to 1% and is also typical of municipalities and districts.

To comply with any of these taxes, it is advisable to seek the support of a good accountant. With the help of a professional accounting advisor, the work is greatly facilitated, in addition to fulfilling this important citizen task.

DIAN Taxes

The Directorate of National Taxes and Customs (DIAN) is an institution attached to the Colombian Ministry of Finance, which administers and controls a series of national taxes, which in turn apply to both companies and individuals. Among those that stand out:

  • Wealth tax.
  • Income tax for legal entities.
  • VAT
  • Withholding at source.
  • National consumption tax.
  • Income tax for natural persons not required to keep accounts.
  • Income tax for persons required to keep accounts.

Whether you are a company or an individual, you must always pay the corresponding taxes, and it is best to seek professional support in the corresponding accounting offices.