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Colombia - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
The tax rate is 35%, whatever the status of the company is, However, exemption is complete for exporters who are located in a free-trade zone,
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Taxe rate on long-term capital gains |
Capital gains are taxed at the rate of 35%,
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Dividends paid to non - residents are levied at a rate of 7%, as a withholding tax, There is no levy for the residents, NB: this tax does not apply to distributions whose product is reinvested in Colombia for a minimum of 5 years,
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Tax rate on branches |
Branches are taxed to the corporate tax as all the other companies,
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Income tax
Fiscal year |
The fiscal year begins on January 1-st and ends on December 31 of the same year.
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Income tax rate |
Income tax is based on a progressive rate schedule, with 35% being the highest marginal rate. In the 1999 tax year, this rate is applicable to earnings of COP $70,000,000 (approximately USD$ 45,000) or more. The same rate schedule is used to determine the tax on windfall profits. "
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Tax deductions or
other allowances |
Interests paid for the purchase of a house or an apartment are deductible, In some cases, the amount of health insurance is deductible, School fees can be deductible for two children and more,
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VAT rates
Standard rates |
Stricto sensu, there is no VAT in Colombia, but a sales tax of 16% (with differential rates from 10% to 48%, for motor vehicles for example). The property transcations are tax-free, as well as some exports,
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Reduced rates |
No
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Other important taxes
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Name of tax |
Rate |
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Tax on transfers
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Rate is 7% applying on repatriations of incomes of an industrial or commercial activity,
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Registration fees
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They apply in registration of contracts, Rate varies from 0,3% to 1% of the amount of the contract,
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Import taxes
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They are composed of three elements: Import tax varying from 5% to 20% according to products; the VAT; customs fees monthly fixed,
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Municipal taxes
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Business rate is calculated on the income of the previous year, its amount varies between 2 and 10%; the land tax, the amount varies between 1 and 16%
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Accounting
Introduction
Accounting has to be produced in Spanish. It uses the double entry system. In Colombia, the accounting must be drafted so that accounts give a clear, complete and precise vision of the review of the company's activity.
The decree 2160 of July 09, 1986 published by the Colombian Government summarizes the accounting practices generally accepted and the rules to respect in Colombia.
General accounting principles
PROFIT AND LOSS ACCOUNT: on December 31 n, to be compared with
n-1
1) Running products
2) Gross profit
3) Running expenses
4) Running income
5) Cost of global financing
6) Profits before income tax
7) Net profit.
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Obligations and publications
The Colombian Business Code doesn't give any details regarding the obligations concerning the book-keeping or the accounts attestation. In practice, companies keep up to date a ledger, a ledger, an inventory report and establish annually documents which are necessary for the financial analysis (balance sheet, profit and loss account, annexes).
Certification and auditing
All companies as well as subsidiaries of foreign company have to seek an auditor to lead an annual audit of the financial health of the company. This auditor must have the chartered accountant's certification and assure the accuracy of the published account information. When they sign the financial status, they guarantee to be aware of all the required information.
Professionals and representative organizations
"Instituto Nacional de Contadores Publicos de Colombia".
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Export Entreprises SA ©, All rights reserved
Last modified in
January 2003
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