Navigating the Colombian Tax System for Foreign-Owned Companies: Key Dates and Obligations

Mastering the Colombian tax system for foreign-owned companies is not only a legal necessity—it’s a crucial step toward sustainable growth and regulatory compliance. Understanding this complex structure is vital for the financial and reputational health of your business.

This guide will walk you through the key dates and obligations that every foreign company should know to operate properly in Colombia, avoid penalties, and optimize tax planning.

In this article:
• Understanding the Colombian tax system for foreign-owned companies
• Key components of the Colombian tax calendar
• Extensions and penalties
• Region- and municipality-specific considerations
• Key tips for foreign companies in Colombia
• Frequently Asked Questions (FAQ)

Understanding the Colombian Tax System for Foreign Companies

Colombia’s tax system operates at the national, departmental, and municipal levels. Tax obligations are primarily defined at the national level by the Dirección de Impuestos y Aduanas Nacionales (DIAN), but local governments can also require their own taxes such as ICA, property tax (predial), and surcharges.

To operate legally, foreign companies must:
• Register with DIAN (RUT)
• Obtain a Tax Identification Number (NIT)
Establish a tax domicile in Colombia if they have a branch or permanent establishment

Key Components of the Colombian Tax Calendar

Advance income tax payments and withholdings (bimonthly or quarterly)
- Companies subject to income tax must file and pay withholdings monthly or bimonthly.
- Under the Simple Taxation Regime (RST), advance payments are filed bimonthly (Form 2593).
Annual income tax return
Depending on the taxpayer type:
- National and foreign legal entities with permanent establishments: Form 110
- Foreign branches must also file income tax
- Deadlines vary by NIT number, typically from April to October
VAT and withholding returns
- VAT may be filed bimonthly, quarterly, or annually, depending on revenue volume
- Dates are published annually by DIAN and vary by the last digit of the NIT
Exogenous information report
- Requires detailed reporting of third-party transactions (clients, suppliers, payments, etc.)
- Mandatory for companies exceeding thresholds in revenue, assets, or purchases
- Usually submitted between May and June, depending on NIT
Foreign assets declaration (Form 160)
- Required for taxpayers with foreign assets above a certain threshold
- Filed together with the income tax return

Extensions and Penalties

This document outlines how the company will operate: its legal representative, capital, decision-making process, etc. In a S.A.S., this can be done in a straightforward and flexible manner, without complex formalities.

Extensions
- Automatic extensions are not allowed in Colombia. However, in exceptional cases (force majeure, unforeseen events), companies may request an extension from DIAN with proper justification.
Common penalties
- Late filing: 5% of the tax due for each month or part thereof, up to 100%
- Failure to file: Up to 20% of bank deposits or transactions
- Incorrect exogenous reports: Over COP $100,000 per incorrect or missing data point.

Region- or Municipality-Specific Considerations

ICA (Industry and Commerce Tax): Municipal tax based on commercial activity. May be filed monthly, bimonthly, or annually.
Property Tax: Applies if the company owns real estate.
Environmental, lighting, or security surcharges: In some municipalities.

It’s essential to verify with each local tax office (Secretaría de Hacienda) where the company operates to ensure full compliance.
In most individual cases, a private document signed by you or your attorney is enough.

Key Tips for Foreign Companies in Colombia

Keep updated accounting records under Colombian norms (IFRS for SMEs or Group 1)
Use technology tools to meet tax deadlines and reporting obligations
Evaluate whether the Simple Taxation Regime (RST) is advantageous for your business
Always consult a local tax advisor or certified accountant

Frequently Asked Questions (FAQ)

Does a foreign company operating in Colombia have to file income tax?

Yes, if it has a permanent establishment or generates Colombian-source income.

What forms must be filed?

Forms 110 (income tax), 300 (VAT), 2593 (Simple Regime), 160 (foreign assets), among others.

Are the dates the same every year?

No. DIAN issues an annual tax calendar with deadlines based on the last digit of the NIT.

What happens if I don’t file or pay taxes

You may face monetary penalties, interest, audits, and even deactivation of your tax ID (RUT).

Is hiring a local accountant mandatory?

Not mandatory, but highly recommended due to the complexity of the Colombian tax system and to avoid costly mistakes.

What’s next?

At Whole, we can help you meet all Colombian tax compliance requirements, from initial registration to periodic filings. If you’re a foreign company, make sure you’re working with advisors who understand both your home country and Colombia’s tax rules.

Need help with the process or looking for tailored guidance?

We assist foreigners in setting up and managing their businesses in Colombia — from legal setup and tax registration to accounting and beyond.
Contact us here or leave your details and we’ll get in touch.