Expatriate tax ebook - Columbia

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation

Pre arrival procedures
Visa ; Foreign identification if the expatriate is going to stay over 3 months

Employment visas

• TEMPORARY EMPLOYEE VISA :

For Foreign employees that are hired by a company, organization, public or private institution, or individual, and seek to enter or remain in the country to work or conduct activities in his/her area of specialization, they are able to apply for a temporary employee visa. The duration of the visa is up to two years.
Requirements:

• Labour contract.
• Letter issued by the employer entity in which it compromise to sponsor the expatriate.
• Certificate of active status, good standing and legal representation of the company.
• Proportionality Certificate for national and foreign employees issued by the social security and labour minister.
• Copy of the graduate title or qualifications and the work permission if it apply (the permission depends of the profession of the expatriate).

• TECHNICAL VISITOR'S VISA:

This visa is granted for the provision of urgent technical services to public or private entities, upon submission of a letter from the entity requiring the service, vouching for the person(s) who will enter the country and justifying the urgency of the service. It may be granted for up to 45 calendar days within one same calendar year.

Nationals of countries with which Colombia has standing visa-exemption agreements do not require a visa to enter the country as visitors, and neither do nationals of countries determined from time to time by the Ministry of Foreign Affairs as not requiring a visa.

Tax returns and compliance
Each year the tax authority appoint in which month the income tax return has to be submitted. The specific day depends of the Unique Tax identification number.

In our experience, for income tax purposes, is not common that the tax authority granted any extensions, therefore, the delay of the income tax return submission will be subject to penalties.

However, under extraordinary circumstances, the only competent entity able to grant extension is the tax authority and it will be communicated to the tax payers each year.

The income tax return shall be submitted by personally by the expatriate or through his /her appointed agent.

In order to submit the income tax return, the expatriates must be registered before the tax authority and such authority will assigned a Unique Tax identification number (RUT)

The Colombian tax system is expressed on Tax Value Units UVT. One UVT is equivalent to COP 20.974, for fiscal year ended on December 2007, and is updated every year. For fiscal year 2008 the UVT is equivalent to COP 22.054.

Tax year
The Colombian tax year runs from January 1st to December 31st .

Income tax rates - resident individuals 2008/2009
For individuals the income tax rates depends of the application of the following progressive chart:

Class is expressed in UVT, that are units equivalent to COP 20.974 fiscal year 2007 and COP 22.054 fiscal year 2008.

Sample income tax calculation for year ending 30 June 2008
Example of the income tax calculation:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities