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Tax liabilities for freelance income earned outside Colombia

Last activity 04 January 2019 by 9tgrados

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9tgrados

Hi everyone,

Can anyone give me up-to-date information on freelance tax and social security obligations where all income will be earned from clients outside Colombia? For example, I understand that, within Colombia, returns need not be filed until you earn COP38 million - is that still correct?

I'm a UK national, travelling on a British passport, living in Spain at present but interested in moving to Colombia.

I'd like to bring my (rescue) dog with me. Is Colombia pet-friendly in general?

Thanks in advance, and wishing everyone happy holidays and a happy and fruitful 2019.

Fergus.

OsageArcher

You are not considered a tax resident (residente fiscal) of Colombia unless and until you have spent more than 183 days total in-country in any 365 day period.  Then, Colombia claims the right to tax your world-wide income:

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

For earnings in 2017 (filing in 2018) the threshold for filing was 44,603,000 COP, less than that you do not have to file:

https://www.siigo.com/blog/contador/dec … aber-aqui/

dumluk

My calculator puts that amount at about $14,666?  Hey, I can live on that.........I live on less than that here, and Colombia is cheaper than Panama.........Now of course that is all relative and variable..........and depends on how many kids shes got and how much the private schools cost..........

OsageArcher

dumluk wrote:

My calculator puts that amount at about $14,666?


You might want to get a new calculator, assuming it wasn't pilot error...

44,603,000 COP at today's published rate of 3294 COP = $1 USD works out to
$13540.68 USD.

9tgrados

Hello OsageArcher and thank you for the links and the information. Do you know what the rates of income tax are after the COP44,603,000 threshold? (I tried changing the language on the DIAN website but nothing happened.)
Kind regards,
Fergus.

OsageArcher

To see Colombia's marginal tax rates of 19%, 28% and 33% and to see at what income levels they kick in, go to this page and scroll about halfway down:

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

The thresholds for the tax rates are based on the UVT (Unidad de Valor Tributario) which for 2018 is 1 UVT = 33,156 COP, which at today's exchange rate is $10.25 USD.

This means that the 19% rate which begins at an annual income of 1400 UVT, begins at a bit over $14,000 USD annual income.  You rather quickly reach the 28% rate which starts at 1700 UVT or a bit over $17,000 USD annual income.  Then the highest 33% rate does not start until 4100 UVT, something over $41,000 USD.

9tgrados

Thanks again OsageArcher for the very useful information. Are you a CPA by any chance?
Fergus.

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