Tax FAQ for contractors in Colombia

These are labor-market terms, many of them in English, with no legal category of their own in Colombia. For tax purposes, what matters is whether you provide your services autonomously, without subordination.

Yes. Each source of income has its own social security contribution, paid through its own channel.

Keep your RUT up to date, contribute to health, pension and occupational risk insurance (ARL), issue electronic invoices, file income tax if applicable, manage VAT and keep records of payments received in foreign currency.

That income must be declared in full, in Colombian pesos. Keep receipts, exchange rates and fees, which may be deductible.

The contribution base (IBC) is 40% of your monthly income. Health (12.5%), pension (16%) and ARL according to risk level are applied to it and paid through the PILA form.

The presumed-costs scheme lets you subtract a percentage based on your activity before applying the 40%. It is optional and worth reviewing with an advisor.

The IBC is recalculated every month, with a floor of one minimum wage and a cap of 25 minimum wages.

The RST bundles several taxes into one annual return and taxes gross income. The ordinary regime taxes net income, after deductions.

They are six payments a year using Form 2593, credited against the annual tax. Those with annual gross income below 3,500 UVT are exempt from advances, although they must still file.

Necessary, documented costs such as equipment, internet, software, platform fees and part of your household expenses if you work remotely. Some special deductions are capped at 40% of net income or 1,340 UVT.

Under Article 10 of the Tax Code, you are a resident if you stay more than 183 days within 365, because of family ties, because your income or assets are concentrated in Colombia, or if you cannot prove residence abroad. Residents must declare their worldwide income.

The 0% rate under Article 481 may apply if the service is used exclusively abroad and the requirements are met. Otherwise, you must charge VAT.

It is the status that lets you invoice clients abroad at 0% VAT. It requires registration in the RUT, exclusive use of the service abroad, a client with no business activity in Colombia, and supporting documents.