Do I have to file taxes in Colombia ?
Declaración de Renta.
In English, we tend to view the word rent as something that we receive when we exchange the use of a piece of property for a payment. The word actually comes Latin and means to yield or render. As a result in Spanish this translates to income or revenue. Therefore a Declaración de Renta, is a declaration of income.
Steckenreiter Serna and Associates, while we provide Expat/Legal Services and help manage Foreign Exchange and Investments, is not an accounting firm. We do not provide accounting services or advice.
There are some basic points that you should note if you plan to spend anytime in Colombia. If you plan to be here more than 6 months, you must file a tax statement. If you own a property of over a value of approximately 125.000.000 COP you must file a tax statement. If you earn over approximately 27.000.000 COP in income, whether it be from a job or rental of property, you must file a tax statement.
Colombian law requires that you declare your worldwide income. You may not be taxed on that income, if you show that you have paid tax in another country. Colombia has a few tax agreements with other countries, one being Canada but it is important to discuss this and all of the other issues above with an accountant or tax lawyer.
Up until now, there has been no connection between the municipalities and DIAN (the Colombian tax office). In 2016, this will be changing and the tax office will have a record of the deeded price of every property in Colombia. This will be connected to the individual's Colombian ID or the passport number if they are a non resident. Additionally there is closer communication with the IRS so information is beginning to flow in both directions.
The Colombian tax form is a single page. To file this document you must obtain a RUT. This is a Colombian tax ID number and this is done in an office of DIAN. Taxes for the previous year are filed in August and September. The deadlines are based on your tax ID number. In other words taxes for 2014 are filed in August and September of 2015.
Until now, many foreign residents tend to let this detail slip, but as the DIAN continues to upgrade their systems, it is advisable that you seek advice and assistance from a Colombian accountant. Filing of the tax form should not cost more than 100 usd to 200 usd. If your financial circumstances in Colombia are not complicated and even though you may be a resident, own property and have a modest income, there is a good possibility that you may not have to pay taxes.