Colombia: Taxes and Costs
Income tax (Impuesto de Renta)
Nonresidents are subject to income tax on all his Colombian-sourced income. Net rental income is taxed at 34% for 2007. All expenses incurred in generating the income can be deducted such as administrative expenses, insurance, realtor or leasing agent fees, taxes, maintenance and repairs.
The applicable tax rate for 2008 is 33%.
Real Estate Tax (Impuesto Predial)
Property taxes are levied on the cadastral value of the properties as assessed by the municipalities. The rates of the unified property tax, on the aggregate value of the land and buildings, range between 0.1% and 1.6%. In Cartagena, the rate is 0.65% of the assesed value.
Industry and Commerce Tax
This tax is levied on the gross income of all industrial, commercial, or service activities carried out in a given jurisdiction or municipality through a real estate property. Generally the applicable tax rates are between 0.2% and 1%, depending on the municipality and type of activity. In Santa Fe de Bogotá, this tax is levied from 0.414% to 1.38%. This can be deducted for income tax purposes.
Wealth Tax (Impuesto al Patrimonio)
Wealth tax is an annual tax imposed on individuals who exceed a certain amount of wealth. The tax rate is 1.2% levied on the taxpayer’s wealth in excess of the threshold amounts. For 2007, assets and properties less than COP3,000,000,000 (US$1,276,595) are not taxable.
Capital Gains Tax
Capital gains earned by nonresidents are taxed at a flat rate of 34% for 2007 (33% for 2008). The taxable gain is computed by deducting the following from the transfer or selling price: acquisition costs (as revalued by the consumer price index), costs of transferring ownership, and improvement costs.
EFFECTIVE TAX RATE ON RENTAL INCOME
MONTHLY INCOME US$1,500 | 28.6% US$6,000 | 28.6% US$12,000 | 28.6%
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