In the dynamic and competitive world of business in Colombia, understanding and leveraging the tax system can make a significant difference. Although Colombia's tax structure may seem complex and challenging, each of these challenges represents an opportunity to optimize your finances and gain substantial tax benefits.

Tips to save taxes in Colombia

• DIAN Online Services: The DIAN (National Tax Authority) is the tax authority in Colombia. In the past two years, they have improved their services, allowing most transactions to be conducted online. Familiarize yourself with these services to streamline your tax processes.
• VAT Refund for tourists: Colombian VAT can be refunded to visitors and tourists who make purchases of at least 100 USD (419,000 COP). Keep your receipts and pay by credit card. Check at the airport for the procedure, which takes about 15 minutes. The money is refunded to the credit card.
• Review the fiscal residence: Si viajas por negocios, revisa nuestro documento sobre residencia fiscal para entender mejor los impuestos personales en Colombia.
  Consejo: solicita la retención en la fuente del 20% (WHT-withholding tax) sobre cualquier ingreso.
• Obtain a NIT: The NIT (Tax Identification Number) is mandatory for individuals and companies. Without a Colombian identification, you cannot manage your taxes. Make sure to obtain a NIT for yourself and your company before starting operations.
• Management of Withholding Tax (WHT): Colombia is the country of withholding tax. This allows the government to obtain advance payments and ensure that everyone meets their tax obligations. Be prepared to manage the WHT (Withholding Tax).
• Monthly Tax Declarations: Companies must file multiple tax declarations, including state taxes, federal taxes, VAT, and WHT. Even a small unreported amount can result in significant fines. Seek tax advice before starting your business in Colombia.
• Electronic Invoicing and Magnetic media: The electronic invoicing and los magnetic media (Detailed Transaction Reports) son obligatorios. La DIAN utiliza estos datos para monitorear ingresos y gastos de individuos y empresas.
• Declaration dates: Stay up to date with tax declaration deadlines to avoid fines. Organize a tax calendar and receive reminders to ensure you don’t miss any important payments.
• Monitoring of Income and Expenses: Keep a strict record of your income and expenses to ensure you meet all tax obligations.

Doing business in Colombia presents significant challenges, but with the implementation of the right strategies, your company can thrive in this competitive market. These 9 tips will provide you with tax benefits and allow you to save on taxes effectively and meaningfully.