I've read through some summaries of the taxation of U.S. expats in CO and am still unclear on some points. I'm hoping to clear up a couple of items here.
There is apparently a determination of a presumptive minimum income of 3% of all assets, and a 1% tax on persons with assets above $1.5 million (the wealth tax).
My first question is whether the wealth tax applies to all assets, or only to the amount in excess of $1.5 million. If it's applied to all assets, it would be helpful to know which assets count toward to "total asset" count. I wonder, for instance, whether conversion of some lump sum amount into an annuity would enable a person to avoid part or all of the wealth tax.
Second, is the income tax on the 3% of assets (presumptive income) collected in addition to tax on other income (like, in my case, SSDI and dividends), or is it taxed as an alternative to other income (presumably to ensure that high-net-worth, but low income, persons don't escape taxation)?
All in all, taxation appears to be a major issue for expats in Colombia. I wonder it it's been a deal breaker for others considering retirement there.