Pensionado Income tax and general tax information.

Pensionado Income tax and general tax information.

By

Esteban R.
Colombian lawyer
Email: lawyerscolombia at yahoo.com

This is a short response to the questions regarding tax of foreign pensions and other income while residing in Colombia. I contacted DIAN which is equivalent to the U.S. Internal Revenue Service for answers to these questions. The following information is current as of 7 April 2007

Definitions:

Residency: For tax purpose, an individual is considered a resident of Colombia when has been living in Colombia for at least six months, which can be continuous or discontinuous.

Income Tax: Foreign citizens are obligated to pay income tax on income derived from a national source. Example: They work for a company here in Colombia and receive a salary.

Question 1: When is a foreign citizen required to pay taxes?

According to Colombian law foreign residents are required to pay tax on worldwide income after five years of residency in Colombia be it continuous or discontinuous residency. Certain types of income whose source is in Colombia, are however excluded and they must be pay since the first day the foreign citizen has the residence ( see tax definition).

Exclusions:

A Social security benefit from a foreign government would be exempt from Colombian tax.

All non-national pensions of less than $10,000 dollars per month are exempt.

In conclusion, you must pay income tax on all foreign income after five years of residency in Colombia, but not all that income will be taxable. You should consult your accountant for specific information.

Again, foreign pensions are not considered taxable income in Colombia unless they exceed $10,000 per month. I have asked DIAN to provide written documentation to cover the above questions and DIAN’s legal opinion in the matter.

By lawyer CO on Jun 22, 2007, 12:10 in Friendly Talkzone.

elk says on Jun 22, 2007, 12:26:

Esteban:

Thanks for information and your efforts. Not being taxed in Colombia on our pension income is very important for most of us. I look forward to additional information in written form from DIAN.

Again, thanks.

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lawyer CO says on Jun 22, 2007, 15:25:

Elk and me still waiting for the answer. I hope that on the 2nd week of july we can have something.

Esteban

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griffbos says on Jun 23, 2007, 10:45:

Esteban,
Thank you for posting this information and taking the time to get it.

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gringoloid says on Jun 23, 2007, 12:48:

If a person with a pensionado visa also had some rental property in the U.S. that was reported on a 1040 form at tax time, would DIAN have access to this information?

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arthur brode says on Jun 23, 2007, 13:00:

Thanks for the info Esteban

http://www.calirentals.net/

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Robert Jorge says on Jun 24, 2007, 23:14:

Good question gringoloid. I know the US will NOT divulge tax information to foreign governments. But, to obtain the pensionado visa, are you required to submit your tax forms? If they do, you can decline: But then they don't have to give you the visa either. I am only talking in theory. I too would like an answer to your question.

--"I believe in making the world safe for our children. But not for our children's children, because I don't think that children should be having sex." - Jack Handy

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lawyer CO says on Jun 25, 2007, 06:42:

To obtain the pensionado Visa, you only need a certification that you are receiving one from the US social security. However, some years ago, the former director of DIAN said that they would install a united system with the IRS to share INFO.

I think this never went real so only declare in Colombia the pension ( by the certificate) and what you buy here plus the money invested.

Esteban
colombian lawyer
email: lawyerscolombia at yahoo.com

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