The concept of fiscal residency defines the nature of the source that the individual has to declare as follows:
- Fiscal residents (nationals or foreign) are taxed on worldwide income and should report equity owned in Colombia and abroad.
- Non-residents (nationals or foreign) are taxed only on Colombian-sourced income and should report only the equity owned in Colombia.
Personal income tax rates
General income basket
The following are the types of income included in the general income basket:
- Employment income: Income received for services performed in Colombia, no matter where the payment was received, salaries, wages, fringe benefits, commissions, and all income arising from the labour relationship.
- Capital income: Includes interest, financial income, royalties, rentals, and intellectual property (IP) income.
- Non-employment income: All type of income that cannot be classified in other baskets.
The rates for fiscal residents (nationals or foreign) applicable to the general income basket, pension income basket, and dividend income basket (see below) are:
|Taxable income (TU *)||Marginal rate (%)||Tax liability|
|1,090||1,700||19||(Taxable income or taxable occasional gain translated into TU less TU 1,090) x 19%|
|1,700||4,100||28||(Taxable income or taxable occasional gain translated into TU less TU 1,700) x 28% + TU 116|
|4,100||8,670||33||(Taxable income or taxable occasional gain translated into TU less TU 4,100) x 33% + TU 788|
|8,670||18,970||35||(Taxable income translated into TU less TU 8,670) x 35% + TU 2,296|
|18,970||31,000||37||(Taxable income translated into TU less TU 18,970) x 37% + TU 5,901|
|31,000||And up||39||(Taxable income translated into TU less TU 31,000) x 39% + TU 10,352|
* In December 2006, the Colombian government approved a reform of the Colombian tax system. Such reform incorporated the TU to measure the different limits and thresholds originally set in absolute numbers, adjusted every year by decree. The value of each TU is equivalent to 38,004 Colombian pesos (COP) for fiscal year (FY) 2022 and COP 42,412 for FY 2023.
Pension income basket
Includes retirement and disabilities pensions or income received from labour risks, compensations that substitute pensions or refunds (for rates, see table in General income basket above).
The recent tax reform considers foreign pension income as exempt of taxation up to TU 1,000.
Dividend income basket
Dividends subject to tax at the corporate level and paid to fiscal residents will be subject to the progressive marginal rates previously mentioned applicable for the general and pension income basket (0% to 39%).
Nevertheless, residents subject to this tax on their dividend income will be able to claim a tax credit determined as follows:
|Taxable income (TU)||Marginal tax credit (%)||Tax credit|
|1,090||And up||19||(Taxable income translated into TU less TU 1,090) x 19%|
On the other hand, dividends that were not subject to tax at the corporate level will be taxed at a 35% flat rate, and the net income resulting from subtracting such tax from the gross income will be subject to the individual tax (0% to 39%) previously addressed.
As for non-residents, the applicable tax rate for dividend income was increased to 20% (previously 10%).
Local income taxes
There are no local taxes on individual income in Colombia.