Taxation in Colombia

Taxation in Colombia is determined by the Congress of Colombia, the Departments of Colombia Assemblies and the Municipalities of Colombia councils, which determine what kind of taxes can be levied and which rates can be applied.
Colombia inherited from the Spanish Empire a harsh and diffuse policy of taxation, characterized by a tax system with a very high number of different taxes, but that relies basically on customs, due to the relatively low capacity of local production of goods.
It is important to note that both the national government's budget and the local government's budgets run significant deficits.
[edit] Taxes of National orderThe national order taxes are administered by the DIAN National Tax and Customs Direction. Some of these taxes are, among others:
[edit] IVAThe Value-added tax (IVA) is a variant of the sales-tax. This tax charges 16% of the price of sale of all kind of merchandise, goods, and services, with some exceptions: the public transportation, the Water supply and sanitation, and the transportation of natural gas and hydrocarbons. The Dian recognices two separated categories (regimenes) of IVA responsibles: The common and the simplificated. The first refers to commercers with estimated patrimony over 68 million Colombian pesos (about 34,000 dollars), and the second refers to those with patrimony lesser to that. Although both are obligated to pay the same percentage, the simplified responsibles are not obligated to carry separated bookkeepings for the IVA or to generate sale bills.
[edit] Stamp taxThe stamp tax (Spanish: "impuesto de timbre") is a contribution over the expedition of any official document, and over the validity of private documents, as is the case of any kind of contract or contractual modifications.
[edit] Financial transactions taxThis is a tax that covers all the financial transactions including banknotes, promissory notes, processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means, bank drafts and bank cheques, money on term deposit, overdrafts, installment loans, documentary and standby letters of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures, safekeeping of documents and other items in safe deposit boxes, currency exchange, sale, distribution or brokerage, with or without advice, unit trusts and similar financial products.
[edit] Patrimony taxThis tax requires the annual payment of 0.3% of the total patrimony of those people with patrimony estimated over 3000 million pesos (about 1.5 million dollars).
[edit] Income taxIncome tax (Spanish: "Impuesto a la renta y complementarios") must be paid by all the citizens with total annual income higher than 63 million pesos (about 31500 dollars). The tax represents 38.5% of the total income.
[edit] Local order taxesThis group of taxes includes among others:
Impuesto a ganadores de loterías: Tax on lottery winnings Impuesto a loterías foráneas: Tax to allow the sale of out-of-state lottery tickets Impuesto al consumo de cervezas, sifones y refajos: Tax on Beer Impuesto al consumo de licores, vinos, aperitivos y similares: Tax on Liquors Impuesto al consumo de cigarrillos: Tax on cigarettes Impuesto al consumo de gasolina: Tax on gasoline Degüello de ganado mayor: Tax on slaughterhouses Impuesto de registro: Tax to register (academic degrees, patents, names, etc.) Impuesto sobre vehículos automotores: Tax on automobiles Impuesto de industria y comercio: Tax to allow the opening of indusrial or commercial establishments Impuesto de avisos y tableros: Tax on advertising Impuesto predial: Real estate tax.