Income Taxes

Bill Turley (Moderator) (Trustee board) (☼Travelguide writer) says on Apr 8, 2009, 12:28:

ColombianoGringo (Moderator) (Trustee board) (☼Travelguide writer) says on Apr 8, 2009, 12:32:

Do you mean US or Colombian income taxes?

If you mean Colombian, here are some links that might be helpful. They are in Spanish, but that's unavoidable.

http://www.dian.gov.co/Content/ayuda/ayuda.htm

http://www.impuestosdecolombia.com.co

I'm so hip, I have difficulty seeing over my pelvis.

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Bill Turley (Moderator) (Trustee board) (☼Travelguide writer) says on Apr 8, 2009, 12:40:

ConorC says on Apr 8, 2009, 13:43:

Cheers :)

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LA_Love says on Oct 1, 2009, 10:36:

http://www.globalpropertyguide.com/Latin-America/Colombia/Living-There
Living There
INDIVIDUAL TAXATION
Residents are taxed on their worldwide income. Income of married couples are assessed and taxed separately.

Resident foreigners are taxed only on their Colombian-sourced income for the first four years of their stay in the country. After this period, resident foreigners are taxed on their worldwide income.

INCOME TAX (Impuesto de Renta)
Income is taxed at progressive rates. Income tax is levied on tax value units (unidad de valor tributario, UVT), which is annually adjusted by the retail price index. The UVT for 2008 is equivalent to COP22,054 (US$9).

INCOME TAX
TAXABLE INCOME, UVT TAX RATE
Up to 1,090 UVT nil
1,090 UVT – 1,700 UVT 19%
1,700 UVT – 4,100 UVT 28%
Over 4,100 UVT 33%
Source: Global Property Guide


A presumptive minimum income is annually calculated at the rate of the taxpayer’s net worth. The amount by which the taxpayer’s deemed income exceeds his net income calculated under ordinary rules may be deducted from his gross income over the next five years.

RENTAL INCOME
Income from leasing real property is considered as ordinary income and taxed at progressive rates. Rental income is subject to 3.5% withholding tax, which is considered as advance tax payment. This tax can be credited against the taxpayer’s income tax liability when he files his tax return.

Taxable rental income is computed by deducting income-generating expenses (such as administrative expenses, insurance, realtor or leasing agent fees, taxes, maintenance and repairs) from the gross rent. Property taxes are also deductible.

CAPITAL GAINS
Capital gains from selling real property are considered as ordinary income and taxed at progressive rates. The taxable gain is computed by deducting the following from the selling price: acquisition costs (as revalued by the consumer price index), costs of transferring ownership, and improvement costs.

Capital gains earned through a resident’s fixed assets (houses, apartment, vehicles, chattels, and implements) are subject to special taxation. If the property was sold within two years of acquisition, the capital gains are taxed at progressive rates. Profits generated through sale of the property held for more than two years is subject to a special capital gains tax rate of 1%, withheld at source.

In transfer of the taxpayer’s homes, a reduction in the 1% withholding tax rate is applied if the property was acquired from 1978 to 1986. The reduction rates are as follows:

CAPITAL GAINS TAX REDUCTION
YEAR OF ACQUISITION RATE
1986 10%
1985 20%
1984 30%
1983 40%
1982 50%
1981 60%
1980 70%
1979 80%
1978 90%
Source: Global Property Guide


WEALTH TAX (Impuesto al Patrimonio)
Wealth tax is an annual tax imposed on individuals who exceed a certain amount of wealth. Wealth tax is levied at 1.2% on the taxpayer’s net worth in excess of the threshold amount, which is COP3,000,000,000 (US$1,188,119) until 2010.


PROPERTY TAX


Real Estate Tax (Impuesto Predial)
Property taxes are levied on the cadastral value of the properties as assessed by the municipalities. The rates of the unified property tax on the aggregate value of the land and buildings range between 0.1% and 1.6%. In Santa Fe de Bogotá, Colombia’s capital, the property tax range from 0.002% to 0.015%.

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LA_Love says on Oct 1, 2009, 10:37:

http://www.globalpropertyguide.com/Latin-America/Colombia/Taxes-and-Co...
Taxes are generally high at 33%
Effective Tax Rate on Rental Income
Monthly Income US$1,500 US$6,000 US$12,000
Tax Rate 27.7% 27.7% 27.7%
Click here to see a worked example
Source:
Disclaimer
INDIVIDUAL TAXATION
Non-residents are subject to income tax on all his Colombian-sourced income. Income of married couples are assessed and taxed separately.

INCOME TAX (Impuesto de Renta)
Income of non-residents is taxed at a flat rate of 33% for 2008.

RENTAL INCOME
Income from leasing real property is considered as ordinary income and taxed at 33% for 2008. Rental income is subject to 3.5% withholding tax, which is considered as advance tax payment. This tax can be credited against the taxpayer’s income tax liability when he files his tax return.

Taxable rental income is computed by deducting income-generating expenses (such as administrative expenses, insurance, realtor or leasing agent fees, taxes, maintenance and repairs) from the gross rent. Property taxes are also deductible.

CAPITAL GAINS
Capital gains from selling real property are considered as ordinary income and taxed at 33% for 2008. The taxable gain is computed by deducting the following from the selling price: acquisition costs (as revalued by the consumer price index), costs of transferring ownership, and improvement costs.

Industry and Commerce Tax
This tax is levied on the gross income of all industrial, commercial, or service activities carried out in a given jurisdiction or municipality through a real estate property. Generally the applicable tax rates are between 0.2% and 1%, depending on the municipality and type of activity. In Santa Fe de Bogotá, this tax is levied from 0.414% to 1.38%. This can be deducted for income tax purposes.

WEALTH TAX (Impuesto al Patrimonio)
Wealth tax is an annual tax imposed on individuals who exceed a certain amount of wealth. Wealth tax is levied at 1.2% on the taxpayer’s net worth in excess of the threshold amount, which is COP3,000,000,000 (US$1,188,119) until 2010.



PROPERTY TAX

Real Estate Tax (Impuesto Predial)
Property taxes are levied on the cadastral value of the properties as assessed by the municipalities. The rates of the unified property tax on the aggregate value of the land and buildings range between 0.1% and 1.6%. In Santa Fe de Bogotá, Colombia’s capital, the property tax range from 0.002% to 0.015%.

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LA_Love says on Oct 1, 2009, 10:37:

http://www.globalpropertyguide.com/Latin-America/Colombia/Tax-Pages
Tax Example: Rent
Non-resident couple's joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income 18,000 72,000 144,000
Less Estimated Costs2 (2,170)3 (8,680)4 (17,362)5
Less Real Estate Tax6 (713)7 (2,850)8 (5,700)9
= Taxable Income 15,117 60,470 120,938
Income Tax Rates
Income Tax Rate10 33% 4,988 19,955 39,909
Annual Income Tax Due US$4,988 US$19,955 US$39,909
Tax Due as % of Gross Income 27.71% 27.72% 27.72%
Thanks to:

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 18, 2007.

Notes


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1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).

2 These costs include the property’s insurance policy, realtor agency fees, lease and management insurance policy.

3Break down of estimated costs are as follows: property’s insurance policy (US$100), realtor agency fees (US$1,440), lease and management insurance policy (US$630).

4Break down of estimated costs are as follows: property’s insurance policy (US$400), realtor agency fees (US$5,760), lease and management insurance policy (US$2,520).

5Break down of estimated costs are as follows: property’s insurance policy (US$802), realtor agency fees (US$11,520), lease and management insurance policy (US$5,040).

6Real estate tax is levied on the cadastral value of the properties, which is estimated to be around 50% of the commercial value of the properties.

7The property is estimated to cost US$150,000.

8The property is estimated to cost US$600,000.

9The property is estimated to cost US$1,200,000.

10Rental income of non-resident foreigners is taxed at 33% for 2008.

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