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The Pensionado Visa and your Colombian Tax

This may be of interest to anyone holding the Colombian Pensionado Visa. Normally we are required to have an income of approximately $1,800 USD per month to qualify for the visa and pay taxes on that amount after five years of residency in Colombia. Based on the Colombian tax schedule this amounts to a tax liability of approximately $4,968 USD per year. (23% up to 96,000,000 peso’s) Most current foreign residents are not concerned about tax liability in Colombia since they are able to hide their true foreign income, however Colombian Pensionado Visa holders are required to produce financial documents when applying for the visa which makes it easy for DIAN. This is something to consider in the future if you wish to extend annually your Pensionado visa through the fourth year.

Laws change often in Colombia and this may not be an issue in the future, but something to be aware of if you plan to become a resident of Colombia via the Pensionado Visa. The below site explains the tax laws in detail.

6.2 Residency (defined)
Colombian nationals and foreign residents in Colombia must pay tax on income. A foreign resident is defined as someone who spends at least six months a year in Colombia. After five years’ residence, income earned outside Colombia also becomes subject to tax. Non-residents must pay 35% withholding tax and a 7% remittance tax when transferring earnings out of Colombia. Dividend income is exempt in Colombia.

http://www.deloittetaxguides.com/index.asp?country_id=1510000151&layout=countryGuideDtt#minorA24

By elk on Mar 24, 2007, 11:01 in Visa & paperwork.

griffbos says on May 13, 2007, 18:17:

hmmm tryin got understand your post is it 35% plus 7% only if you trnsfer earnings outside of Colombia, what is the tax if you keep Colombia earnings inside the country. Also it states after 5 years of resident outside income is taxable except dividend income, what about SS income is that taxable?

0 funny, 0 helpful.

elk says on May 15, 2007, 17:26:

Griffbos:
Your subject to a Griffbos:

Your subject to a total of 43% tax if you return funds to the U.S.
Your subject to income tax on all "world wide income" at the 5th year of residency in Colombia. I don't know if social security would be taxable as ordinary income by Colombia, but would also like to know.

The question is: What does Colombia consider "income". (pensions etc) I always get a different answer when asking the question and no one can direct me to a legal document.

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