Taxation in Colombia for a dual U.S. and Colombian citizen.

Definitely connect with a tax professional.  Ask several!  Make sure they can back up what they say by referring to the laws.  But, at a quick guess, you don't have to pay ANY income tax.

Why?  Because DIAN says, you are not considered a resident for tax purposes, unless and until you reside in Colombia for more than 183 days out of any 365 day period, not necessarily a calendar year - this, in paragraph 1, here:

https://www.dian.gov.co/impuestos/perso … dente.aspx

Being a Colombian citizen, though, you should pay special attention to paragraph 3 which outlines the conditions under which you might still be considered a fiscal resident.

You would, of course, as a property owner still be liable for any property tax, the impuesto predial.

https://govco.co/impuesto-predial-de-colombia/

@OsageArcher thank you for your response!

There's a reason why I included the information in bullets.

If I'm understanding correctly, the DIAN page mentions that even if I was deemed to be a tax resident by virtue of number 3, there are two possible exceptions, those being:

• 1 - If fifty percent (50%) or more of the individual’s income were derived from the country where the individual’s holds his/her domicile, the individual will not be deemed as a tax resident.
• 2 - If fifty percent (50%) or more of the individual’s assets were held in the country where the individual’s holds his/her domicile, the individual will not be deemed as a tax resident.

All of my income comes from my U.S. employee, so I believe this would be my exception. However, what confuses me is statement #2. Why? Because technically I would own an apartment in Barranquilla.

So the question there, would be whether one of the two exceptions outweighs the other; because although I'll have this property, I will still be working from the states. Here in the U.S. I don't own a home, just my car (which is depreciating), and a few stocks.

My follow up question to that, if hypothetically I do have to pay taxes on my worldwide income, what might that look like seeing as I earn 100K USD annually?

You can get a rough idea of taxes you'd pay by going here, and using the tax tables do the math (scroll down to the middle of the page):

https://en.wikipedia.org/wiki/Taxation_in_Colombia

Note that for 2023 1 UVT = 42,412 COP

So, for instance, your first 1400 UVT is at 0% - so no tax on your first 59,376,800 COP or $12K USD (approximately). And the 33% tax rate applies only to your income over about $36K. Use your Adjusted Gross Income not the total amount of your earnings. The actual amount of tax is dependent on the exchange rate, too - the higher the USD goes, the more tax you'd end up paying. The stronger the COP, the less tax you'd pay.

You'd get to deduct all your US tax paid from any Colombia tax due. Again, you need to consult with several Colombian tax accountants - but do your own research first. Many of them are simply not used to the tax situations of filers whose main income - or all - is from foreign sources.

I still think it's moot if you are not first, a tax resident, being in-country more than 183 days. But of course it's not what I think that counts, it's what DIAN thinks...

You definitely wont have to pay taxes on your US income if you are in Colombia less than 183 days a year.

Domocile does  ot mean you own a house, your domcile is where you physically live.

Stop making things unnecessarily complicated for yourself.

If you choose to interpret the regulations in a convoluted manner , the truth is DIAN would willing accept any donations you would voluntarily send them

But if you sell your place and make a capital gain you maybe subject to up to a 30% tax on the capital gain  though 95% of Colombians know how too avoiid these charges.

Why Barranquiia? Ugliest city in Colombia  besides maybe Ibagui.

@artisvida

Why complicate your life by buying a property in Colombia that you only plan on living in maybe at most 180 days out of the year....seems like a bad deal.

Might be hard to buy a rental property in the USA where you are living now for around a 100 grand. But if you can find an inexpensive rental unit your return on investment in US dollars is going to be much higher than anything you can find in Colombia.  And you could use the rental income you receive in the US to pay your rent in Colombia and still have money left over. At least do the math...look at the rental prices for a unit similar to the one you are thinking of buying and ask yourself is this a good deal. Or could you get a better return in the USA.

I have a child in Colombia so I got a visa to live here without every having to divulge any of my financial information to the Colombian government. And you are in a similar boat being a Colombian national. So I'm going to tell you how to "no dar papaya".   And it is pretty simple. Just don't do anything that would require you to actually  have to file a tax return here. Namely:

Topes para declarar renta en 2022

Todas las personas naturales que cumplan con alguna de las siguientes condiciones deben declarar el impuesto sobre la renta 2022:

Que el patrimonio bruto al término del año gravable 2021 sea igual o superior a $163.386.000

Que los ingresos totales del respectivo ejercicio gravable sean iguales o superiores a $50.831.000

Que los consumos mediante tarjeta de crédito sean iguales o superiores a $50.831.000

Que el valor total de las compras y consumos sean igual o superior a $50.831.000

Que el valor total acumulado de consignaciones bancarias, depósitos o inversiones financieras sean igual o superior a  $50.831.000

Keep in mind that when DIAN talks about credit card use they are referring to Colombian credit cards and if you buy a car here worth more than 164 million pesos that will also require you to file a tax return here. DIAN has no idea what you spend on US issued credit cards here nor what you pull out of an ATM from your American bank accounts....so don't worry about the 51 million limits on that. Just be careful with the amounts you put into your Colombian Bank accounts.

Keep in mind,...... there are some that like to lie or just don't know any better that will tell you that the IRS shares information with DIAN. Not true. 20 years here and I have never filed taxes in Colombia and I have never even been asked to provide my social security number at anytime. DIAN only knows what you tell them about your finances in the USA so don't tell them anything that you don't have to. 

Colombia's new presidente appointed a

high-powered academic as the new finance

minister .. and it appears that part of the

concept behind that appointment is to

enhance the collection of taxes.

La DIAN's weaknesses to this point could

be strengthened at any time.  So I wouldn't

make any assumptions going forward about

how much information the agency shares with

the IRS, the Colombian immigration authority,

or any other relevant agencies.

cccmedia

@cccmedia

Point taken....it is hard to predict the future. But after a life time of experience with the IRS....I'm willing to go out on a limb and say that they are still not going to share US Citizen tax information with foreign governments. 

One clue that the Colombian government would even be trying to start to find out the tax information of Colombian residents from the USA  would be to start asking Americans for their Social Security number when apply for a Colombian visa.

The main problem with Colombian tax laws is that they have no teeth  There is no law on the books that gives jail time for tax evasion....the only remedy Colombia seeks....  for not paying taxes is  more money by adding fines.  But if someone has no real assets or property in Colombia then what is the point really. Plenty of expats live their whole lives in Colombia and never open a Colombian bank account. They just use their US credit cards and withdraw money from  the  ATMs.  The Colombian government needs to pass a law that requires everyone to file taxes regardless of income..... so at the very least some people that didn't want to pay taxes here would at least be forced to lie about it. As it stands now.... it is fairly easy to just to avoid doing things that would even require someone to have to file taxes here in the first place..

Seems like local governments have figured this problem out with traffic tickets....the traffic ticket gets put on the car instead of given to the person responsible for the violation.....that way it is impossible to transfer title of the car without first paying off the tickets.

@nico peligro thanks for your input.

I'm not trying to make things complicated for myself, quite the opposite. I'm trying to get an understanding of the regulations in Colombia so that I avoid any headaches in the future should I decide to keep the property I plan on buying.

For additional clarification, I stay in Colombia for less than 183 days at the moment, but plan on buying an apartment and I wanted to:

1. Know if I needed to report taxes due to the monthly payments I make on the property even though I don't own it yet.
2. Get an idea of my situation should I fully move there once the apartment is complete.

Beauty is subjective. To you, Barranquilla might be an ugly city, but I love and enjoy it, especially the north. Besides the joy I find in the city, I have family and friends that live there.

@Tommy Lee70 this was great information! Thank you for taking the time to post and share.

I would like to clarify that at the moment I stay in Colombia for less than 183 days because I don't own a home there as of yet; however, I plan on making a purchase [and possibly moving here in 2 years].

My question was more towards the monthly payments I would be making towards the purchase and whether I had file and report that, but it seems that as long as I don't exceed a certain amount of $ in Colombian bank transactions I'd be fine.

Going back to the following statement in your previous post:

"Que el patrimonio bruto al término del año gravable sea igual o superior a $163.386.000."

Does this term apply towards purchases exceeding that amount during that particular year? Or would this mean that moving forward, I would need to file every year because I now own an asset/property that exceeds this amount?

For example: lets say I purchased a home or car for $250.000.000 in 2022, would I only need to file this year (2023)? Or would this purchase make me liable for taxes in 2024, 2025, etc?

@Tommy Lee70 this was great information! Thank you for taking the time to post and share.
I would like to clarify that at the moment I stay in Colombia for less than 183 days because I don't own a home there as of yet; however, I plan on making a purchase [and possibly moving here in 2 years].

My question was more towards the monthly payments I would be making towards the purchase and whether I had file and report that, but it seems that as long as I don't exceed a certain amount of $ in Colombian bank transactions I'd be fine.

Going back to the following statement in your previous post:

"Que el patrimonio bruto al término del año gravable sea igual o superior a $163.386.000."

Does this term apply towards purchases exceeding that amount during that particular year? Or would this mean that moving forward, I would need to file every year because I now own an asset/property that exceeds this amount?

For example: lets say I purchased a home or car for $250.000.000 in 2022, would I only need to file this year (2023)? Or would this purchase make me liable for taxes in 2024, 2025, etc?
-@artisvida

No ...once you own more than the  limit of $163,386,000 COP....you will be required to file a Colombian income tax return for every year going forward....that amount not only includes real property but also your cars as well. However this only applies once you are deemed a tax resident by having spent more than 183 days in a rolling calendar year in Colombia.  So I wouldn't worry about filing taxes just because of the payments on the apartment.  Plenty of gringos here own much more than the limit but are not required to file taxes simply because they are not considered residents for tax purposes.  Also don't worry about filing taxes for large amounts of money in your Colombian bank accounts until you are deemed a resident for tax purposes.

This advice is really for gringos....there is the possibility that some tax laws will affect you differently since you are a Colombian national.  So do your own due diligence.

@Tommy Lee70 maybe DIAN dont, at this time  share information with the IRS, because they are too lazy  unsophistiicated and dont know their own rules and powers.

But they certainly have the ability and right to do so as Colombia is a signitory of the Common Reporting Standard (CRS) system along with over a hundred other countries, and can have access to the data bank of any tax authority in signatory countries.

In fact, now-a-days, when you open a bank or iinvestment account in Canada ,US and Europe, you are required to sign a waiver saying you permit your financial information to be available to foreign tax agencies per CRS and FACTA regulations.

Thats the way it is  like it or not.

For the record I purchased a house annd Colombia about 12 years ago and then sold it a year later.

Being Naive and green, another expat introduced me to an accountant wo suggested I get a RUT and NIT..which I.did, paying him 250 mil.( mistake).

Never heard anything from DIAN until about 3.years ago when I recieved a form.letter from them saying I had to report income or something. They had no clue I sold the house a while back.

I talked to an accountant who said just ignore the  form letter.

Have heard nothing since

Moral: stay undr the radar. Let sleeping dogs lie.

@nico peligro

I don't know why anyone would care if DIAN sent information to the IRS unless they were making a ton of money here in Colombia....usually it is the other way around.

But the Colombian Banks here do report bank accounts with over 10K to the IRS....not sure how that is done since well no one in Colombia has ever asked for my Social Security number....But make sure you declare the bank account on your US taxes if you have more than 10  grand at anytime during the year. But that  still doesn't change the fact that the IRS doesn't report tax information to DIAN. 

Its all done through the FACTA and CRS system

I am a Canadian and the money I spend in Colombia goes in and our of my account in a blink of n eye..the balance and interest is miniscule as far as CRA the Canadian tax agency is concerned.

As far as Colombian bank transactions, I am sure I will blast through my the limit ( for the first time in 11 years) this year, but doubt I will hear anything from DIAN like I didnt for the house I bought 12 years ago, and the large amount I subsequently put in my BancoColombia account after selling it 11 years ago.( both well over the " limit")

Why would they be interested in this stuff that proves nothing when they could get my exact world wide income from the CRS data and my migration status ( Visa and time in the country during the year) from migraciones,?

BTW..IRS has no choice but to provide DIAN all your US tax and income data if requested, as both countries are signatories of CRS treaty and FACTA.

Its a 2 way street.

But, I agree, as you say, you have little.to worry about if you own nothing in Colombia  as there is nothing to " embargo"

( expropriate).

For those who may wish to read up a bit on FATCA, the IRS page:

https://www.irs.gov/businesses/corporat … -act-fatca

Here is,a very basic explanstion of CRS agreement.

There are números articles available online on this subject.

https://en.wikipedia.org/wiki/Common_Reporting_Standard

@nico peligro

20 years here and I know dozens of expats living in Colombia since well before there were even laws on the books regarding worldwide income and none of them have ever been contacted by DIAN for undeclared foriegn income....and none file a tax return here.

https://www.ustaxhelp.com/which-countri … mation/The links don't get posted here sometimes.So ill show the list of countries that the USA actually shares citizens tax information with.AzerbaijanAustraliaBrazilCanadaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGibraltarGuernseyHungaryIcelandIndiaIrelandThe Isle of ManIsraelItalyJamaicaJerseyKorea, Republic ofLatviaLiechtensteinLithuaniaLuxembourgMaltaMauritiusMexicoNetherlandsNew ZealandNorwayPolandSaint LuciaSlovak RepublicSloveniaSouth AfricaSpainSwedenUnited KingdomThese are the countries that the IRS will actually send tax imformation to like earned income....if the citizen is a resident of one of these countries. But this has really nothing to do with FATCA which pertains to banking information  being shared and not tax information.

Here is a list of the countries that the USA has actual tax exchange agreements with.

TAX INFORMATION EXCHANGE AGREEMENTS

Jurisdiction

Date

Document

Title/Description

Argentina    12-23-2016    TIEA    Agreement between US and Argentina, Exchange of Information Relating to Taxes

Cayman Islands    11-29-2012    TIEA    Agreement between US and Cayman Islands, Exchange of Information Relating to Taxes

Cayman Islands     11-27-2012    Note    Note from US to Cayman Islands... Exchange of Information Relating to Taxes

Costa Rica    5-23-2018    TIEA    Agreement between US and Republic of Costa Rica, Exchange of Information Relating to Taxes

Ecuador    4-7-2021    TIEA    Agreement between US and the Republic of Ecuador, Exchange of Information Relating to Taxes

Guernsey    12-13-2013    Protocol    Protocol Amending Agreement... US and State of Guernsey... Exchange of Information... Sept 19, 2002

Hong Kong    3-25-2014    TIEA    Agreement between US and Gov't of Hong Kong, Exchange of Information Relating to Taxes

Isle of Man    12-13-2013    Protocol    Protocol Amending Agreement... US and Isle of Man... Exchange of Information... Oct 3, 2002

Jersey    12-13-2013    Protocol    Protocol Amending Agreement... US and State of Jersey... Exchange of Information... Sept 4, 2002

Panama    11-30-2010    TIEA    Agreement between US and Republic of Panama, Exchange of Information Relating to Taxes

Panama    11-3-2010    Note    Note from US to Republic of Panama... Exchange of Information Relating to Taxes

Singapore    11-13-2018    TIEA    Agreement between US and Republic of Singapore, Exchange of Information Relating to Taxes

@Tommy Lee70

I agree with you..I know people in the same boat..some with several 100 thousand US or even over a million invested in Colombia.

But remember past performance is no guarantee of future conditions

Colombia is a signatory of the CRS agreement..which means they are entitled to US citizen tax  and financial data in the US

Whether they will ever use the CRS data is relatively unlikely in the near future.

And whether they go after anyone seriously with " zero" assets" in Colombia is highly doubtful.

Why spend a lot of time  effort and money trying to get blood from a stone?

Of course they could always make undertakng a "Declaracion de Renta" as part of the process for visa renewal, for those in the country more than 183 days a year.

But than one could go shopping for several accountants and get an accountant to do a " fake" tax return that satisfies DIAN like so many expats do. 

Colombia is volatile.

Guerrillas and paramilitaries are active outside

the cities, and, per Colombiareports.com, are

making inroads into some municipalities.

Tax law is unsettled -- changeable, interpreted

differently by different parties, lacking in clarity.

Except for what is posted on Expat forums,

the degree of past enforcement of tax law

is largely opaque.

With a new finance minister appointed and

charged with collecting more taxes based on

existing law, the future of tax enforcement

is hazy.

This all adds up to keeping a low tax profile,

corresponding as little as is possible-practical

with agencies that may supply or act on

tax information, spend 180 days or fewer in

Colombia out of any 365 if possible, do not

acquire assets in Colombia .. and employ

professionals who interpret tax law in a way

that is favorable to you.

cccmedia

I think your idea of spending time between Ecuador and Colombia is great CCC

I love Ecuador as much as Colombia..actually, I love the Latín American cuture,  climate and geography in general.

Great if one is truly " single", and enjoy " playing the field".

But for people in a more commited relationship it is not practical.

Long distance relationships dont work well long term.

Besides that, Ecuador has a dollar based currency and prices areat least 25% higher than in Colombia.

You can correct me on this with your personal experience.

The rest of your post is" dead on" .

With the caveat " seek an accountant who interprets the tax law favorable for you ONLY WHEN IT BECOMES NECESSARY TO DO SO." ( Caps for emphasis)

Otherwise, best to let" sleeping dogs lie"

The Gran Qi reported $1,200 a month social security to the Ministerio de Exteriores for his initial pensioner's visa. He presumably will report at least that, if he meets the threshold for tax filing.

In 2023, Qi should get an 8.7% inflation adjustment bringing his annual Social Security income to 15,652 dollars. At today's conversion rate of 4,858 pesos= 1 dollar, his annual income in pesos would be 76,050,459 in 2023. According to my sources, 1 UVT = 42,412 pesos in 2023. Therefore, his estimated tax base (in UVTs) is 1,738 (75,050,359 ÷ 42,412).

Range in UVT:

• 0 to 1,400, tax rate is 0.
• 1,400 to 1,700 tax rate is 19%
• 1,700 to 4,100 tax is 28%.

42,412 x 300 UVTs x 19% = 2,417,484

42,412 x 38 UVTs x 28% = 451,263.

Estimated tax in pesos: 2,858,746.

Estimated tax in dollars: 588

I doubt Qi will owe any income taxes to Uncle Sam the in 2023, since his Social Security probably won't be taxable. Therefore, I don't think we need to factor in a deduction or credit for U.S taxes paid in 2023 on his Colombia return.

Assuming Qi's profile is typical of many other expats in Colombia, should a prospective expat be running scared to Ecuador for 183 days, just to avoid paying $588 in Colombian income taxes? Besides going to Ecuador, what other "scheme" can Qi employ, in order to "avoid" paying those taxes?

P.S.

If I ever file tax a return in Colombia, I will be using the TurboTax of Colombia: tributi.com.

Not everyone is living on SS

I know some Very wealthy expats here

But point taken..avoiding the 183 day rule in order not to pay taxes does not apply to everyone..

@N.Barley

That is all fine and good for someone with an income that is only slightly above the poverty level in the U.S. But if you use a number such as say $4,000 $/month then you are looking at a tax bite of over $18,000.00. Bump up your income to $100,000.00 and ouch you are looking at over $70,000.00. Of course that is gross income and not AGI but you see the point. So if you are living near the poverty level in the USA you won't be too worried about taxes in Colombia and can actually live better. But; if you have more income you need to be aware. Of course that is just a very simple look and does not take into account many factors.

elp

@Lpdiver I wonder how the rich there avoid the bite?

lpdiver wrote: "But if you use a number such as say $4,000 $/month then you are looking at a tax bite of over $18,000.00.  Bump up your income to $100,000.00 and ouch you are looking at over $70,000.00. Of course that is gross income and not AGI but you see the point."

$48K per year gets you $18K in taxes? $70K in taxes, on a $100K income? Can you please show your work?

Going out on a limb here, but that doesn't sound right...If you do the math at Taxation in Colombia, it is nowhere near that.

https://en.wikipedia.org/wiki/Taxation_in_Colombia

@N.Barley thank you SO MUCH for the break down here! I believe I finally understand how the UVT ranges work and was able to come up with an estimate for my situation. Would it be fine if I sent you a private message to check my work? Lol!

Bump up your income to $100,000.00 and ouch you are looking at over $70,000.00. Of course that is gross income and not AGI but you see the point.
-@Lpdiver

If I assume that Qi will have $100,000 of income in 2023 from the following sources and an average conversion of 4,858 pesos to 1$, I estimate his taxes as follows:

Social Security     30,000

Pension from McDonalds    20,000

Dividends and Interest    20,000

IRA Distribution    30,000

In the U.S. only 85% of the social security income would be subject to taxes.  Also, assuming a standard deduction of $13,850 for 2023.

U.S. Taxable Income: 81,650

U.S. Taxes: $15,220

Colombia Taxable income in pesos: 485,800,000 ($100,000 x 4,858)

Tax Base in UVT = 11,454 (485,800,000 / 42,412)

Tax rates in UVT:

0 to 1,400, tax rate is 0.

1,400 to 1,700 tax rate is 19%

1,700 to 4,100 tax is 28%.

>4,100 is 33%

42,412 x 300 UVTs x 19% =      12,417,484

42,412 x 2400 UVTs x 28% =    28,500,864

42,412 x 7,354 UVTs x 33% = 102,926,289

Colombia taxes in Pesos:  133,844,638

Colombia taxes in Dollars:           27,551

Credit for taxes Paid in U.S.       (15,220)

Taxes payable to Dian in $:         12,331

Of course, under this hypothetical, Qi would most likely qualify for his M pensioners visa with just his McDonald's pension of $20,000, and then only report $20,000 in income for purposes of the EPS health insurance and for calculating his Colombia taxes.

Osage and Barley yeah I fat fingered my spreadsheet in the wee hours of the night at work. Barley's post covers it more accurately. As a further note it may be possible to apply for a visa via one's wife and not declare any income at all. Migrations is not required to ask about income with a spousal visa; but, sometimes they do. My attorney will navigate that minefield when/if that day arrives.

Basically you are at the max tax (33%) rate for anything above $35,794.40 (AGI) minus taxes paid in the U.S.

So, in as much as there is not joint filing in Colombia how do they handle that if you joint file in the U.S? Do they divide your AGI by two and the taxes paid by two or some other method?

elp

elp

Do they divide your AGI by two and the taxes paid by two or some other method?

While that would be a good question for Señor Langon, imo it comes down to the fact you are from a community property state.  What makes an audit in Colombia potentially messy is the fact 1099s reported to the IRS are associated with one social security number and one name. Howevever, legally that doesn't mean your wife isn't entitled to half the income. And of course, you may have had assets prior to marriage that generate income that she is not legally entitled to, in the event of divorce.

Under a common law property system, assets acquired by one member of a married couple are deemed to belong to that person, unless they were put in the names of both. Common law property contrasts with a community property system, which treats assets acquired during a marriage as belonging to both partners. --investopedia

So, it may be appropriate to split the income, which may be advantageous if it results in lower marginal tax rates. Just be sure you are able to reconcile what you report on you and your wifes' tax filings back to your 1040.

@OsageArcher yep the numbers are off..but if you make around 70K a year you still will pay at least $10K more in Colombia than in a low or zero tax State in the US ..if you go by the letter of the written law, as determined by PWC or Deloitte Touche Colombian branch and not some fly by night Colombia accountant  who has a cousin working at DIAN or even talking to a local DIAN employee who are themselves ignorant of thier own basic tax laws as it applies to foriegners.

And if your income goes up from this level, taxes go up substantially.

Plus, if you have significant net worth  the luzury tax kicks in. Not sure what level now but they were talking about reducing the  point at which the tax kicks in at aboutb $US 500 k plus.

@OsageArcher yep the numbers are off..but if you make around 70K a year you still will pay at least $10K more in Colombia than in a low or zero tax State in the US ..if you go by the letter of the written law, as determined by PWC or Deloitte Touche Colombian branch and not some fly by night Colombia accountant who has a cousin working at DIAN or even talking to a local DIAN employee who are themselves ignorant of thier own basic tax laws as it applies to foriegners.
And if your income goes up from this level, taxes go up substantially.

Plus, if you have significant net worth the luzury tax kicks in. Not sure what level now but they were talking about reducing the point at which the tax kicks in at aboutb $US 500 k plus.
-@nico peligro

PS I wrote my post with WAG guess on excess taxes before I read N Barleys  detailed calculation.

@Lpdiver I wonder how the rich there avoid the bite?
-@loaferln

Aa TommyLee70,( who has been here over 20 years) pointed out  most of the rich expats and pretty well all of the rich Colombians with assets overseas overcome this issue by one of two methods:

1. Not doing an annual declaracione de renta.

2. Finding a local accountant with connections in DIAN, submitting a " bogus" declaracion de renta that does not include or understates overseas income  which is rubber stamped by said accountants conection at DIAN.

Really, it is only certain expats who are obsessed with this, and just lately..in the last 5 years.

According to DIAN, you will need to file a 2023 return in 2024, if you are a tax resident (>183 days) and you meet one of the following thresholds.  I did a conversion to dollars in parenthesis assuming a conversion rate of 4,858 to 1.

My question is about how the government tracks purchases/consumption. If you buy a microwave at Pricesmart with cash, do you have show your cedula so they can count it towards your annual purchases/consumption?

•     gross net worth at the end of the taxable year 2021 is equal to or greater than 190.854.000 ($39,343)  OR
•     the total income of the respective taxable year is equal to or greater than $59.377.000 ($12,222); OR
•     the credit card consumption is equal to or greater than $59.377.000 ($12,222); OR
•     the total value of purchases and consumption is equal to or greater than $59.377.000($12,222); OR
•     the total accumulated value of bank deposits, deposits or financial investments be equal to or greater than $59.377.000 ($12,222)

It seems to me that most expats will meet one of these thresholds for 2023 and that the DIAN should be able to identify expats who are in non-compliance.

@Lpdiver I wonder how the rich there avoid the bite?
-@loaferln
Aa TommyLee70,( who has been here over 20 years) pointed out most of the rich expats and pretty well all of the rich Colombians with assets overseas overcome this issue by one of two methods:

1. Not doing an annual declaracione de renta.
2. Finding a local accountant with connections in DIAN, submitting a " bogus" declaracion de renta that does not include or understates overseas income which is rubber stamped by said accountants conection at DIAN.

Really, it is only certain expats who are obsessed with this, and just lately..in the last 5 years.
-@nico peligro

Lpdiver's very own visa attorney, Señor Langdon, has said on his website that there are accountants in Colombia who believe that Lpdiver doesn't need to report a dollar of his foreign-sourced income:

Note that there is some debate in the accounting/tax community in Colombia as to whether these thresholds should measure Colombian-only activity or whether they need to include activity on a worldwide basis. Our accountants interpret the relevant rules to include worldwide activity.

@N.Barley Langdon may well be my visa attorney; however, I am not sure they will be my tax entity. The list of items they want to give you advise and a quote is pretty exhaustive. We will see how the visa goes. The general advise I was given by all consultations is to not disclose anything more than you absolutely must.

lpd

The general advise I was given by all consultations is to not disclose anything more than you absolutely must.
lpd
-@Lpdiver

I think that is good advice.  You are in a good position because you supposedly don't have to meet any income thresholds to get your marriage visa. Of course,  it sounds like they may want to see that you can support yourself financially while in Colombia, which could mean showing a large bank account balance or a provable income stream like social security.

One of pontential "traps" I see an expat might fall into is spending/depositing/withdrawing much more than they are reporting as income to DIAN, or more than 59 million pesos in the event they don't file a return.

Even though that money may be somebody's nest egg in the U.S. already taxed,  it might present a reason for DIAN to audit that expat and ask for a bunch of supporting documentation including a copy of their 1040. If QI were underreporting income significantly, I am sure he wouldn't be making excessive ATM withdrawals to avoid drawing attention. There are other ways for him to spend that unreported income, such as flying to places like Panama City and  living large for a couple weeks, playing blackjack and buying clothes (cutting the tags before flying), while using his U.S. based credit/debit cards to pay for the costs of the trip.

That is the general plan. There are ways to get the money in Colombia and not have it tracked (legally of course). The first attorney I spoke with as well at the accountant had both lived in the USA for decades and currently have children in the USA. They were the ones that advised to be very careful as to what one has to disclose. IF I have to disclose anything it will be the absolute smallest chunk that I can get by with.

Then I will initially avoid staying long enough to be come a tax resident until I am in country for enough time to get my bearings and make an intelligent informed decision. There are plenty of destinations that I can visit for several years to organize a minimal or no tax strategy for Colombia.

lpd