Relocating to Colombia means immersing yourself in a country rich in culture, natural beauty, and warmth. With its low cost of living, excellent healthcare, and growing expat communities, Colombia is attracting digital nomads, retirees and entrepreneurs from around the world.
In this guide, we’ll walk you through everything you need to know about relocating to Colombia from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Colombia follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you are present in Colombia on more than 182 days during any 12 month period.
if you are a Colombian national and your family reside in Colombia or 50% of your incomes or assets are located in Colombia.
Providing that you are non-domiciled and a) 50% of your income derived in the tax year is sourced to where you are domiciled or b) 50% of your assets are located where you are domiciled, foreign incomes and gains will be exempt from Colombian taxation. Colombia can be a very tax efficient place to live in and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Colombian taxation.
Must be non-domiciled.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Colombia, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Colombia has 16 double taxation agreements signed.
