Colombian Corporate Tax Filings

Colombian Corporate Tax Filing: Understanding cultural differences when doing business in Colombia is something that takes time. Accountants in Colombia are very important to assist with your books on a weekly basis. It is very important to stay current on monthly, bimonthly, quarterly and yearly filings to avoid fines.

REGULATORY TAX FILINGS FOR COMPANIES: Corporations are responsible to file and pay monthly, bimonthly, and annual taxes. Most common tax responsibilities for corporate income and profits are RENTA, IVA, CREE, RETENCION EN LA FUENTE.

Old laws are constantly being amended in Colombia which makes it necessary to have an atttorney and accountant dedicated to your company. Since 2013 tax reforms, foreign residents that spend more than 183 days a year in Colombia now have to file! Foreign tax residents are persons who have over 183 days in Colombia. Foreigners receive deductions on taxes paid over seas.

Tax planning for foreigners with less than 183 days in the country and 183 days or more is very different. Understand the implications and consult with COLOMBIA LEGAL & ASSOCIATES SAS to understand your legal obligations under Colombian tributary laws.

COLOMBIA PAYROLL / EMPLOYEE TAXES:

Are paid out to various government entities to cover health, retirement, and pension benefits on a monthly basis for all employees. The following benefits are provisional employee taxes: liquidation, liquidation interests, vacations, and legally required bonuses – which are paid out upon termination of work contracts, at the end of the year, or bi-yearly. Please see Colombia Payroll Taxes for more information.

TAX BRACKETS:

Colombia uses UVT values to determine tax brackets for employee witholding taxes which are required to be retained by some employers. Unidad de Valor Tributario (UVT)

It is important to understand that payroll taxes are heavily regulated and enforced by various government agencies. Not being familiar with these laws as an employer is not an excuse and will lead to heavy fines – and in some cases will even bankrupt companies out of existence for improper planning. Understanding these costs will allow for better planning by knowing the “real” cost of each employee. As a general rule, employee benefits run between 42 to 53% of their salary. Please see our Colombian Labor Law section for more details on how work contracts effect payroll taxes and employee benefits.

Pasted File at February 21, 2022 9_37 AM

Employee taxes are calculated

Based on the gross monthly salary of the employee (not including irregular bonuses). Although expensive, employee payroll taxes are deductible from corporate income taxes. Also, it is very important that contractors prove they are paying payroll taxes each time you pay them or you will not be able to deduct their salary payments as expenses from corporate taxes!

Annual Corporate Tax Declarations

with us today. Minimum declarations required to be filed annually are: RENTA + CREE + INFORMACION EXOGENA + INDUSTRY COMERCIO. Colombian corporate annual taxes are due in April, (due dates vary depending on corporte tax id number). Minimum fines for late payments for companies start at $283,000 * 3 for late tax declarations with the DIAN. The Industry Comercio (city tax) has 1 tax filing called adviso y tableros, and has a minimum $94,000 fine for late payments, (until 30th of April).

Accountant and Attorney Messenger Services:

We are the pros at obtaining needed certifications from government agencies. We can obtain tax ids (RUT personal, y juridica) for foreign and domestic corporations, as well as digital fingerprint (firma digital) needed to file your taxes. Other popular services obtaining official bill numbers, and permissions for exporting, importing or obtaining internation commerce certifications to be exempt from sales taxes. Filings at the chamber of commerce to change executive officers, and/or limit roles of vice presidents in a Corporation. We also handle processes to reduce tax debt, and obtain tax refunds from local and national government offices, such as the DIAN, and Industria Comercio.

Frequently Asked Questions (FAQ)

What is a Colombian SAS Corporation in simple terms?

A SAS is a simplified joint-stock company that combines features of an LLC and a traditional corporation. It's flexible, low-cost, and designed to protect shareholders from personal liability.

Can I create a SAS with only one person?

Yes. A single shareholder can form a Colombian SAS Corporation. There’s no requirement for a board of directors or multiple owners.

Is a SAS corporation valid for applying for a Colombian visa?

Absolutely. A SAS can be used to support a Colombian Investor Visa application, provided it meets the required investment thresholds.

How much does it cost to start a SAS?

You can start a SAS with very low costs—often under $1,000 USD—depending on the services used and whether asset contributions require notarization.

Do I need to be in Colombia to start the process?

No. You can start remotely by giving power of attorney to our firm, and we can handle most of the process on your behalf.

Final Thoughts: Should You Open a SAS in Colombia?

If you're still wondering what is a Colombian SAS Corporation, the answer is simple: it's your easiest path to legally start a business, protect your assets, and access Colombian residency options.

📞 Ready to get started?
Let the experts at Colombia Legal & Associates and Visas by James help you form your Colombian company.
Visit www.colombiavisas.com or contact us today for a free consultation.