Taxation on Social Security?

Your confused, welcome to the party. There are simply so many opinions on this subject even with the so called Colombian tax accounting experts that after almost 10 years living here I still don't fully understand the requirements, and BTW I am just over this limit of $50k (all SS) so each year I submit my tax data to my accountant in Medellin and they spit out some number, I head to my Bancolombia and pay the tax and don't want to think about it for another year.

I wish I had some great advice but it is what it is. The tax is reasonable, I usually pay the equivalent of about $2k each year and like to saying goes "It's just some numbers in my US bank", this all being said my move from California to here in Medellin was the best decision of my life, so whats that worth.

I am sure that your going to get a variety of opinions on this subject, "you ask 10 lawyers of their opinion and you receive 11 answers" type of thing.

Even the highest regarded tax accounting experts have many differentiating opinions, but know that much depends on your specific situation, too many variables, so best I can suggest is that when you visit find a reputable accounting firm and do your due diligence.

BTW, I live on the north-end of the Aburra valley in Medellin, in a smallish pueblo, and could not have made a better decision to purchase and hang my hat here almost 10 years ago. I have also traveled extensively throughout Ecuador and have friends that live there and are considering moving to Colombia, so do your due diligence before you decide where you want to live, eg trade-offs.

Godspped!

In either Colombia or Ecuador, about the only thing you can count on about the tax situation for expats whose income is mostly/all from foreign sources, is that the laws are "subject to change".  What is true one year may not be true the next.

Both countries have ambitious social programs with not enough money to pay for them.  And as we all know, gringos are rich, and not quite universally loved, so they make an easy and popular target.  You will get no sympathy from the government or the populace - in reality their problems are much much greater than yours.

The best you can do is find a tax accountant whose answers are the least damaging to your pocketbook, and who can back his answers up with the current laws.  And/or one whose brother-in-law is a high muckety-muck working for the tax authority DIAN (Dirección de Impuestos y Aduanas Nacionales).

@South American Voyager

I really appreciate your thoughtful reply.

There is so much going in Ecuador right now and who knows how all that is going to play out. I am not one to buy into mainstream media, but when people who have been there for a long time start telling you this is a bad time, I don't know, I've just been feeling concerned.

We are looking for place in nature, quiet, with access to a reasonably good sized city especially since I am in the arts. We go over to Seattle about once a month for theatre, etc.

I love hearing that you enjoy your life there!

Thank you

@OsageArcher

Thank you!

And you are right, there are much bigger issues than my small concerns. The world is struggling...

It would be good to meet a muckety muck - I havent heard that for awhile! Made me smile

@nicoleadette

Nothing is quaranteed in Colombia and the law as written and as practiced are 2 different.things.

Have to wait for the new reforma pensionada to come out which will modify Ley 100 on pensions.

Even then, interpretation to foriegners is really fuzzy.

Best option for legal interpretación is to talk to Langon ( other than Deloite Touce or KPMG who will charge many times Langons fee for the same advice). But even then, future precedents could be set unfavourably in your case.

Best.option is assume they are untaxable dont do a Declaración  de renta and thus get in their

Radar.

Second Best option, if youv

want to totally "play by the book"  and have zero risk is to come here less than.183 day a year.

@nico peligro or you can get an accountant who has " buddies " at DIAN like SA traveller and most other expats I know do and  submit a bogus declaracion de renta.

$2000 on $55 k income.Not likely legitimately anyway  in Colombia, unless its Colombisn income only being declared. The marginaltaxation rstes jump to 20% to 30% really fast.

Probably work for years, but so does doing nothing and you are not in their radar and the financial penalties are similar.

Dian is not the IRS .They are happy for anything you give them and they abhor  going to court.

I can guarantee you, no one is going to jail

@nicoleadette

Why not split time between Colombia and Ecuador with a short side trip to a third country of a few weeks. This way you can avoid becoming a tax resident. I sat down with two tax "professionals" in Medellin and I don't feel like I would owe enough to make it not worth moving to Medellin. That said one was a native and lived and worked in USA and has children there. His advise was to disclose as little as possible. I have an advantage as I am under a Migrant visa as the spouse of a Colombian national. The other consultation was with a well known, big name attorney. They wanted credit cards statements, property statements, and a list and valuation of anything I own that is titled. Hell, I honestly don't know how many credit card accounts I have open as I am an avid churner and would have to work on making a list of every boat, motor vehicle, etc. I certainly won't pass that on to anyone in Colombia, not that I distrust the lawyer, I just don't want to exposure.

I never looked at Ecuador seriously as I have family in Medellin.

Good luck,

elp

@nico peligro Thank you!

@Lpdiver

Thank you for the suggestion. Disclosing that much information would make me uncomfortable too. Interesting.

As for Ecuador, I guess they have an agreement with the U.S.  so they don't tax social security

@nicoleadette I really don't know if Ecuador has a tax treaty or not; but, by splitting time between countries in such a way as to not be there for more than six months you can avoid the issue for quite some time while you sort the issue out on a local basis. Plus you get the bonus of having real in country experience to guide you in making your decision.

elp

Not being fascetious…”most of which don't seem to make much sense”, welcome to Colombia.    Don’t go there or you will drive yourself crazy.  Embrace BIC = Because It’s Colombia.

I agree you will get different opinions from different accountants.  One important difference on taxes  Colombia vs USA is that there is no ”joint return”, Colombia income tax is individual so you and your spouse file separately.  In your case even if you declare it you may be under the paying thresholdold but you may still have to file a report.