Colombia

Individual - Significant developments

Last reviewed - 08 August 2022

In September, 2021 Law 2155 was approved. Nevertheless this tax reform did not introduce changes to individuals' income tax regime. Law 2010 of 2019 reformed the income tax system for individuals. As of 1 January 2020, the act established new rules. 

  • Two tax systems have been maintained for residents, ordinary and presumptive.
  • The presumptive income system was modified: For fiscal year 2020, it is assumed that the taxable income of a taxpayer in any fiscal year cannot be less than 0.5% of the taxpayer’s tax equity on the last day of the immediately preceding taxable year. This assumption is 0% as of 2021.
  • Three baskets of income were implemented as the method of depuration for the ordinary system.
  • For fiscal residents, the applicable tax rate will be specific by type of income.
  • Exempt income and deductions combined maintain a threshold of 40% of the net income up to 5,040 tax value units (TVU) annually.
  • 35% remains as the tax rate for individuals qualified as non-tax residents.