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.
Latest Colombian news
November 08, 2018
Colombia is proposing that it cuts its VAT rate to help boost the struggling economy....
June 26, 2018
Colombia has levied VAT on the provision of electronic services to its consumers by non-resident providers. The measure comes into effect on 1 July...
June 16, 2018
From 1 September 2018, large tax payers will be required to produce electronic VAT invoices. The Colombian tax authorities, DIAN, has already selected the...