Corporate Taxes in Colombia

Guide to Fulfilling Your Tax Obligations

Taxes in Colombia are an important part of doing business in Colombia. As a company, you must comply with a variety of tax obligations and submit tax returns and payments on specific dates. This article will provide a complete guide to taxes for businesses in Colombia and how you can meet your tax obligations.

Taxes for businesses in Colombia: Types of Taxes

In Colombia, companies are subject to several types of taxes, some of which are the following:

• Income Tax (ISR): The ISR is a tax on company profits. Companies must file ISR returns and pay the tax on specific dates.
• Value Added Tax (VAT): The VAT is a tax on the added value of goods and services that companies sell. Companies must charge VAT to their clients and file VAT returns and payments on specific dates.
• Industry and Commerce Tax (ICA): The ICA is a local tax that applies to commercial and business activities. Companies must file returns and pay the ICA on specific dates.
• Parafiscal Contribution: The parafiscal contribution is a tax that applies to some specific industries, such as the tourism industry. Companies must present declarations and pay the contribution on specific dates.

How to Comply with Your Company's Tax Obligations

To comply with your company's tax obligations in Colombia, it is important that you follow these steps. Legal Requirements to Create a Company in Colombia

Register with the DIAN

The DIAN is the entity responsible for collecting taxes in Colombia. It is important to register your company with the DIAN and obtain a Tax Identification Number (NIT) before starting operations.

Maintain Accurate Accounting Records

You must maintain accurate and up-to-date accounting records to comply with your tax obligations. This includes submitting returns and paying taxes on specific dates.

Prepare Tax Returns

You must prepare and submit the corresponding tax returns on specific dates. It is important to be accurate and thorough when preparing your returns, as any errors may result in penalties and fines.

Make the Corresponding Tax Payments

You must make the corresponding tax payments on specific dates. It is important to ensure that you have the necessary funds to make the payments at the right time.

How to Reduce Your Tax Burden?

In addition to complying with your tax obligations, there are some strategies you can use to reduce your tax burden in Colombia. Some of these strategies are the following:

Take Advantage of Tax Deductions

In Colombia, there are certain tax deductions that can reduce your tax burden. It is important that you know the available tax deductions and use them effectively.

Use the Appropriate Tax Regime

The tax regime you choose can have a significant impact on your tax burden. It is important to evaluate the different tax regimes available and choose the one that best suits your company.

Plan Your Expenses and Income

If you carefully plan your expenses and income, you can reduce your tax burden. For example, if you make certain expenses at specific times, you can take advantage of available tax deductions.

Use Creative Accounting

While it is important to be accurate and thorough in your tax returns, you can also use creative accounting to reduce your tax burden. However, you must ensure that any strategy you use is legal and ethical.

Conclusion

Complying with your company's tax obligations in Colombia may seem overwhelming at first. However, if you follow the appropriate steps and take advantage of the available tax reduction strategies, you can minimize your tax burden and avoid penalties and fines. Remember to keep accurate and up-to-date accounting records, prepare and submit complete and accurate tax returns, and make the corresponding tax payments on specific dates. With these solid practices, you will be able to keep your company in good financial standing and in compliance with the law. Consult our tax lawyers in Colombia for expert advice.