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%)

Colombian VAT Rates

Rate Type Which goods or services
19% Standard Since 1 January 2017
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 Zero VAT rate includes: 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.

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