Mónica Reyes Rodríguez
Founding Partner
The following is a summary regarding the taxation of Colombian tax residents and of non-resident individuals holding assets or earning revenues within the country:
As provided in articles 9, 12 and 20 of the Tax Code, individuals, both national or foreign, who qualify as non- Colombian residents, are only subject to income and complementary taxes on income or capital gains of national source. In the case of foreign investors holding a permanent establishment (PE) in Colombia, Article 66 Law 2010, 2019 established that income tax is assessed on the national and foreign source income that is attributable to the PE.
Colombian residents are subject to taxes on global-source earnings, so that Colombian residents must report income and assets on a worldwide basis. Foreigners residing in Colombia are only subject to taxation on domestic and foreign income after 183 days of continuous or discontinuous permanence in Colombia including days of arrival and departure during any 365-consecutive calendar-day period.
In the case of foreign individuals residing in Colombia, net worth taxes on a global basis will be applicable as of the first year of residence within the country.
Likewise, nationals who meet one of the following conditions, are considered residents, even if they themselves remain abroad:
- When the spouse or domestic partner or minor dependent children have tax residence in Colombia; or
- when 50 per cent or more of their income is from national source; or
- when 50 per cent or more of their assets are managed in the country; or
- when 50 per cent or more of their assets are deemed to be possessed in the country; or
- when having been required by the tax authorities, they do not prove their residency status abroad for tax purposes; or
- when the individual is a tax resident in a country qualified by the National Government as a low-tax jurisdiction, non-cooperative jurisdiction or preferential tax regime.
Nevertheless, nationals who meet any of the conditions referred to above are not considered Colombian tax residents if, and when, they comply with one of the following requirements:
- That 50 per cent or more of their annual income has its source in the jurisdiction of their domicile, or
- That 50 per cent or more of the national´s assets are located in the jurisdiction of their domicile.
Colombian law establishes that unsettled successions are subject to income tax, and therefore earnings, revenues and assets previously belonging to the decedent and which are part of the succession, must be declared by the succession. Likewise, unsettled successions of deceased persons who were not residing in the country at the time of their death, do not qualify as Colombian residents and are only subject to income tax on revenues and capital gains of local source and to equity tax with respect to the assets held in the country.
In compliance to dispositions regarding the administration of personal data, REYES ABOGADOS ASOCIADOS S.A requests that you contact us if you are not interested in receiving legal updates. This bulletin is a Service by REYES ABOGADOS ASOCIADOS S.A., which is sent exclusively for information purposes with no intention to render legal advice. For specific cases, we recommend that individual assistance is sought before making decisions based on the information contained herein.