Colombia Forum

littlebhuddha64
Joined 2018
Posts: 254

5 years ago

Colombian Income Tax (kinda long)

5 years ago

I have been wanting to finally sit down and delve into the tax system here in Colombia. I was. CPA in the states before retiring so I thought I would give it a shot. A friend asked me what he could expect to pay in taxes if he decided to live here permanently. Also I was curious as to what my liability would be. So I finally had the impetus to spend a full day getting the answers. His situation is this: He currently lives in Cali with his girlfriend and her son. His only income is his social security pension of about $23k US. I did my calculations based on him being married so he could claim the wife and kid as dependents. So first I converted the $23k to pesos using the 12/31/18 exchange of $3244.50 which came out to 74.600,000 pesos roughly. I deducted 7.460.000 for dependents, another 1.500.000 for medical insurance. That left him with about 66.000.000 net income. The first 37.354.000 is not taxable so that left him with taxable income of 28.600.000. 20.900.000 of that is taxed at 19% or 3.975.000. The remaking 7.680.000 is taxed at 28% or 2.150.000 for a total tax bill of roughly 6.100.000 pesos. He was not happy. I didn’t have the stomach to try and figure mine out yet. But that is less than a 10% tax to live here. Sure you would be paying less taxes in the states but how far would that $23k go in the states? I am going to have a Colombian accountant check my figures next week in Bogotá. I am definitely not a Colombian tax expert but I’ll bet I am pretty close.

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