The Colombian tax system is divided into three different levels of tax collection: national, departmental and municipal taxes.
National taxes consist of:
Income tax, VAT, national consumption tax, financial transaction tax (GMF, Gravamen a los Movimientos Financieros), national gasoline and diesel gas tax, national carbon tax and the stamp duty, among others.
- Income tax is a tax on the taxpayers’ profits that increase their net worth and derive from their regular transactions. This can be paid in advance through withholding tax, which is a procedure for the early collection of taxes.
- VAT has a standard rate of 19%; however, it has differential rates of 0% and 5% for certain products and services.
- National consumption tax applies to the provision or sale of goods and services to end-users, or to the import of goods and services. These taxes are generally VAT exclusive, but there are exceptions.
- GMF tax is a tax on the financial transactions that result from the resources deposited in checking or savings accounts.
Departmental taxes consist of:
The main departmental taxes include registration tax; excise tax on cigarettes, beer and alcoholic beverages; and motor vehicle taxes, among others.
Municipal taxes consist of:
The main municipal taxes include the industry and commerce tax (ICA), the unified property tax, the urban construction tax, and the capital gains tax, among others.
*This chapter will be updated due to changes in the tax reform