Colombian VAT rates and VAT compliance
VAT rates in Colombia
The standard VAT rate for Colombia is 19%, with a reduced rate for basic foodstuffs; health services and insurance, a nil VAT rate for some goods. Exports of goods or services; tourism services for non-residents; some financial services and insurance; some agriculture supplies; electricity and natural gas supplies; medicines are all exempt.
There is a further Consumption Tax on:
- Restaurant Services (8%);
- Mobile phones (4%)
- Luxury goods (16%)
|Rate||Type||Which goods or services|
|19%||Standard||All other taxable goods and services|
|5%||Reduced||Reduced rate includes: certain sales of new real estate; cotton; timber; certain foodstuffs; agricultural supplies; agricultural insurance; medical insurance; electric and hybrid vehicles; cleaning; coffee|
|0%||Zero||Exports; livestock; meat; certain foodstuffs; sales of tourism packages to foreign visitors; certain books and magazines; some military and police equipment; sales to Colombian free trade zones|
Colombian withholding VAT
In certain circumstances, the purchasers of taxable goods or services are obliged to withhold 15% of the VAT due. This reverse charge is a type of split payment. These include:
- Government offices
- Where the vendor is non-resident
- Where the customer and vendor are within the common VAT regime (100% of the VAT due)
Colombian VAT compliance
There are detailed rules controlling the recording and processing of transactions for VAT. These include guidelines on:
- Invoice requirements, including the requirement for credit notes;
- Foreign currency reporting and translation based on Central Bank rates – payments must be in Columbian pesos;
- Export invoices, and proof for departure of supplies e.g. customs documents and DEX (Declaración de Exportación);
- E-invoices from June 2018;
- Language requirements;
- Credit notes and corrections; and
- What accounting records must be maintained and for how long.
VAT Invoices must include the following information:
- A declaration that it is a “Factura de Venta”, VAT invoice
- Name and tax payer number of the vendor
- Name and tax payer number of the customer
- Unique VAT invoice number
- Date of the invoice
- The reference from the DIAN Tax Office to the unique VAT number
- Description of supplies, quantities etc.
- Gross, VAT and net values
- Reference to the vendor’s VAT withholding agent status if appropriate
Colombian VAT returns
VAT returns are bi-monthly in Colombia for businesses with revenues of 3 billion pesos per annum. For smaller taxpayers, returns are quarterly.
The penalty for late VAT returns and payments is 5% of the value of the VAT due.
Colombian VAT Recovery by non-residents
Foreign companies may not reclaim Colombian VAT incurred.