How would I find old links pertaining to El DIAN and declaracion de renta for foreign residents in Colombia?

By dwr on Mar 14, 2008, 11:45 in Friendly Talkzone.

Ctg Bound says on Mar 14, 2008, 11:54:

Its no differant than Colombian residents as far as I am aware.

robi666 says on Mar 14, 2008, 11:57:

Old links?

http://www.dian.gov.co/

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

Ctg Bound says on Mar 14, 2008, 12:34:

dwr,

Just pay an accountant to fill the form in, the going rate for a good one is 1.5 times minimum salary.

BUT you can find one who does it for about 200,000 pesos or so.

dwr says on Mar 14, 2008, 12:51:

Question. if you earn a small salary in Colombia and a large one outside of Colombia, are you required to pay tax on money earned outside of Colombia?

robi666 says on Mar 14, 2008, 12:58:

Good question. It seems that after 5 years of residency, you are.

This are usually regulated through fiscal agreement between countries. If there is not a fiscal agreement, you are exposed to pay taxes twice.
I wonder if DIAN applies the international norms that say, as an example, that if you own a property that is rented out, you pay taxes in that country where the property is.

Never got a satisfactory response in Colombia.

Ctg Bound says on Mar 14, 2008, 13:23:

dwr,

QUESTION, do you have assets in Colombia that are registered at over 80 million pesos or so?

I say registered as you may have bought an apt for example for 100 million, but on the escritura it just says 50 million.

I wouldn't bring up overseas income.

robi666 says on Mar 14, 2008, 13:24:

Yes, pay what you have to pay here and cross your finger...

dwr says on Mar 14, 2008, 13:32:

Yes, property in Colombia with Colombian Wife over 80 million. I declare taxes in USA but not here. Escritura says over 80 million as well. Overseas income is what has me thinking.

dwr says on Mar 14, 2008, 13:34:

I have always paid the property tax here. I just haven't declared. My wife has declared on property. My income in Colombia is minimum. Overseas another story.

aztec says on Mar 14, 2008, 14:29:

dwr in the past few years there have been a good amount of discussion on this subject here on PBH. Many long time Colombian residents used to be regular posters here. They had already experienced most of the problems involved with migrating to Colombia. So I am assuming your question referred to prior information.

There was a time when you could find most of the discussions by using the search tool. Haven't tried it lately but Google is always a good bet to recover information.

dwr says on Mar 14, 2008, 14:35:

That's right aztec. Thanks!

Ctg Bound says on Mar 14, 2008, 17:22:

dwr ,

If you own assets on approx 80 million, you need to declare.

The 80 million number may be a few million more now, as that is a number from a few years ago.

I am not sure if combined with your wife may raises/lowers the numbers though, as you will probably own the property 50/50, maybe somebody else does, or an accountant can tell you.

I would get a recomendation from friends for an accountant to do the form or to advice you that you don't need to declare, my accountant does mine each July for the year before.

fecherklyn says on Mar 14, 2008, 19:16:

dwr, to my knowledge many people have attacked this problem but nobody has yet found an answer.

Elk initiated one of the better recent threads on 2007-03-04 entitled "Tax on Foreign Income" (Friendly Talk Zone). At that time the concensus was also use a "friendly" tax accountant and declare only sufficient incomes (and/or assets) in Colombia that keep you within the taxable threshhold.

I was not satisfied by this as I prefer to abide by the law (even if it means reviewing my residence in Colombia) and I tried to research the matter. What is easy to find are the following extracts from Dian which give their guidelines on the matter:

Impuesto Sobre la Renta y Complementarios
http://www.dian.gov.co/dian/15servicios.nsf/etributario?OpenView&Start...

Capitulo VII Rentas Exentas de Trabajo
http://www.dian.gov.co/dian/15servicios.nsf/0108fdc3639d83ff05256f0b00...?

These extracts confirm "residentes extranjeras" ARE SUBJECT to this tax on their worldwide income once they have been 5 years resident here. However, beyond this point matters become less clear.

What if your foreign incomes are comprised of pension revenues? In this case Art. 56.1 states pension incomes are not imposable "if the appropriate conditions are satisfied". You must refer to another law (cannot remember which) to find out what these conditions are. I did look some time ago and seem to remember these "conditions" do not pose any problems for most people. This exemption of pension incomes is further conditioned by Law 223/95 Art 96 which seperately limits the exemption to 50 "salarios minimos mensuales".

So the problem is, as far as I can see, is:

- Do the pension income exemptions apply equally to "extranjeras" as well as locals?

- Are other, foreign incomes (dividends, capital gains, consultancy fees, etc.) declarable/imposable even if it can be demonstrated they have been taxed elsewhere?

On these points I have been unable to find any definitive answers despite hiring several supposedly expert tax accountants and writing to the DIAN. The Dian simply refer you to the extracts I have already given and the tax accountants...well don't ask.

What is clear is that hardly anybody commands this subject which is at yet at the infancy stage in Colombia. Apparantly, the DIAN extracts only provide the "bare bones" and the applications are in practice created by specific laws as and when required.

dwr says on Mar 15, 2008, 04:42:

Thank you very much for the advice. I appreciate the imput. Sounds like a cluster that requires a little bit of wiggling.

robi666 says on Mar 15, 2008, 05:45:

Again, I came to the same point as fech.

This matter is usually regulated by international bilateral tax agreement to avoid double taxing of the same income.
Talking about Italy, as an example, there are in place agreement with Argentina and Brasile, but not with Colombia. That treatment is still a matter of studying and Colombia is indeed still at an infancy stage.

Usually, when a treatment is not in place, internal rules or "modus operandi" mitigate the lack of existence of such treatments. It is often left to the individual agent enforcing the law.

Another thing to consider, else than the income tax, is the patrimony tax. It is due after five years of residency and the patrimony includes foreign assets.

Again, at this stage and due to the not clear situation, as Ctg_Bound said and as my tax accountant advices, I would not bring up overseas income and just cross my finger.

aztec says on Mar 15, 2008, 07:39:

Why not research the comments by viewpoint. He was and is still heavily invested in Colombia. However, he became so disillusioned with the government regulations he moved to Panama where he continues investing millions.

Unfortunately, he rarely posts here anymore. Too bad since he still has substantial investments in Colombia.

buggy says on Mar 16, 2008, 02:33:

http://poorbuthappy.com/colombia/post/income-tax-and-retirement/

http://poorbuthappy.com/colombia/post/pensionado-income-tax1/

“Ojos y oídos para Norteamérica / para su propio pueblo, sordo y ciego" Pablo Neruda

fecherklyn says on Mar 16, 2008, 07:30:

Buggy, thanks for sharing these informations with us....they seem to be reassuring (at least as concerns pension income). Can you tell us if you have received the "follow-up" lawyer's opinion from the DIAN?

Even so, all this only concerns EXEMPTION of pension income. Does anyone have any idea on how "Exemption" affects "Reporting" obligations? My immediate feeling is the "reporting" obligation would remain, the "exemption" quality of the pension incomes merely giving them a form of "tax credit".

robi666 says on Mar 16, 2008, 07:34:

It would be nice to know something about other income, too. Incomes that are usually taxed in their originating countries, like rent on real estate or stocks dividends.

buggy says on Mar 16, 2008, 11:07:

Yes I received a letter from DIAN in July 2007.
They said me:
"... consideramos applicable los conceptos N° 25700 de abril 2 del 2007 y 82173 de agosto 30 del 2000 ... cuyas fotocopias remitimos ...".
With the letter were photocopies of concepto 25700 and consulta 67167 but not of concepto 82173!!!

You can find the "concepto 25700" here:

http://www.cijuf.org.co/codian07/abril/o25700.html

The most interesting is that part, saying that articulo 206 del estatuto tributario is valid for foreigners:

"De otra parte, el artículo 206 del mismo Estatuto señala, entre otras rentas de trabajo exentas:

1. Las indemnizaciones por accidente de trabajo o enfermedad.

2. Las indemnizaciones que impliquen protección a la maternidad.

3. Lo recibido por gastos de entierro del trabajador.

4. El auxilio de cesantía, “(...)"

5. Las pensiones de jubilación, invalidez, vejez, de sobrevivientes y sobre Riesgos Profesionales, hasta el año gravable de 1997. A partir del 1 de Enero de 1998 están gravadas sólo en la parte del pago mensual que exceda de cincuenta (50) salarios mínimos mensuales.

El mismo tratamiento tienen las indemnizaciones sustitutivas de las pensiones o las devoluciones de saldos de ahorro pensional. Para el efecto, el valor exonerado del impuesto es el que resulte de multiplicar la suma equivalente a cincuenta (50) salarios mínimos mensuales, calculados al momento de recibir la indemnización, por el número de meses a los cuales ésta corresponda.

6. El treinta por ciento (30%) del valor total de los pagos laborales recibidos por los trabajadores, sumas que se consideran exentas."

“Ojos y oídos para Norteamérica / para su propio pueblo, sordo y ciego" Pablo Neruda