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Questions from a new gringo

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user9999999
  11/18/2020 07:22 EST

Hello all,

I moved to Colombia last month from Oregon, married my fiance, and am in the process of applying for the M-1 visa.

Some questions I have are the following:

1. I still work and plan to continue working for a US company as a software developer. How/What do I need to do when it comes to taxes in both countries? From some of my reading it sounds as though until I'm a resident I don't need to do anything since I don't work for a Colombian company, but perhaps I'm misunderstanding that. Anyone recommend tax consultants or agencies?

2. Prior to moving here and still to this day I have my US bank account and when bills need to be paid I just do a wire transfer to my wife's Colombian bank account. Should I get a Colombian bank account?

3. With an M-1 will i be able to get a cedulla?

4. Any advice for health insurance? My wife just started a new job with and international company so she has none yet and my employer back in the USA said that my current health insurance would only cover catastrophic while outside the USA. We have agreed to end my coverage at the end of the year and he will compensate me financially for the health insurance.

NoHeatNoAC
  11/18/2020 11:13 EST

I work remotely for a US company, so my situation is similar to yours. I cannot promise that my advice is perfect nor based on having the very latest information. Others may have better suggestions.

1. You don't need to worry about taxes, even as a resident, until you spend 183 days or more in the country. Find a good accountant that is experienced with filing for ex-pats in Colombia for your 2021 taxes.

As far as my company is concerned, they employ me at my "home" address in Texas. For their purposes, I am treated as a US-based employee. Paying Colombian taxes is entirely my responsibility.

2. I did open a bank account but never use it. If we do have a large expenditure, I either wire the money to my wife's account or directly to the recipient.

3. With an M-1 will i be able to get a cedulla? Yes - with any type of residency visa you are obligated to have a cedula. You must apply for it within 15 days of the receipt of your visa.

4. I strongly recommend getting local EPS insurance. This is the cheapest level. It served me well for many years. I recently upgraded when I switched to getting my somewhat expensive medication locally instead of from the US, as the additional cost was equal to what I would have paid out of pocket for the meds. We switched to SURA a few years ago and have been very happy.

I kept my US insurance with my employer as well, since I traveled to the US often before the pandemic and will resume travel next year (I hope). If you do choose to drop US insurance, remember that you will need to buy temporary insurance for travel to the US.

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DallasSteve
  11/18/2020 11:34 EST

To clarify on the taxes, you should be aware that the 183 day limit applies to any rolling 365 day period. You don't "get a new clock" on January 1. So, for example, if you arrived in Colombia October 1, 2020 and you stayed until about April 1, 2021, whenever you hit 183 days Colombia will require you to pay taxes on your worldwide income or assets, whichever gives them more money. Or if you leave for a few months and then come back and stay a few more months you can hit the tax requirement at any point on a "rolling" 365 days. I don't know if they would catch you or what they would do, but they probably would stop you from leaving if your passport shows you hit the 183 days and you can't prove you filed taxes.

Electricista
  11/18/2020 14:39 EST

2) ¨Should I get a Colombian bank account?¨

No. Colombian banks will just ding you to death. However, consider Daviplata once you have a cedula in hand. In may ways Daviplata will help you avoid a bank account by allowing you to pay bills from your cellular and Daviplata has no service charges.

elpdiver
  11/18/2020 16:18 EST

Also remember that your travel days count towards your 183 in rolling 365 day period. So for example you arrive in Colombia today 11/18/2020 at 11:55 p.m. and depart at 12:05 a.m. that is two days towards your limit. Not to important to most; but, if you come and go often or you are cutting it close... it could matter.

ELP

Blenheim
  11/18/2020 16:34 EST

That is a lot of nines--

Your wife must be a model !!!

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fecherklyn
  11/18/2020 18:07 EST

@ elpdiver & DallasSteve

I think your comments about the 183 day rule are correct, but the application of it sometimes gets me puzzled.

Let me use a situation that may well happen for me (I intend to leave Colombia when Covid 19 has cooled down enough through time, or vaccines; say August 2021:

On that basis (say I try to fly out of Colombia on August 22,2021) the following situation would exist for me:

I was in Colombia for all 2020 and had filed my 2020 tax in August 2020 a few days before my physical departure.

As of August 22 2021, I would have spent more than 183 of the immediately previous period in Colombia. On this basis, It would appear I was subject for taxes in Colombia for what period:

- The period Jan 1 to August 22 2021?

- Or the entire Colombian 2021 tax year, including incomes from wherever I went to after August 22nd?

I did try my tax accountant on that one and he gazed into the distance and said he would come back on that one. So far the silence has been deafening.

The problem is accentuated by the fact tax declarations are not required until sometime in August/September each year according to your Colombian tax number. So how would I deal with this as I am trying to leave before the due date for 2021 has arrived……by a provisional Quitas Fiscal?

fecherklyn
  11/18/2020 18:11 EST

Should read..."I was in Colombia for all 2020 and had filed my 2020 tax in August 2021 a few days before my physical departure.

SkyMan
  11/19/2020 10:57 EST

Blen...Great post ! Seven(7) nines huh...Is there any significance or an overactive finger on the keyboard ?

As far a s banking goes...you'll see all kinds of responses to that question on this site...pros & cons. If you plan to do any business here...an account in a Colombian bank will make that easier, plus bill-paying online is simple & quick...rather than standing in a long line at Multipagas to pay the utils, etc. Plus a Colombian bank debit card is easy to use...not showing your cedula when purchasing in most places. so my advice is to try it for a while without a local bank account & if that's not working for you...open up one...Stay Well. Buena Suerte !

elpdiver
  11/19/2020 19:43 EST

Fech,,,

The short answer is I don't really Know.
But, you can file and pay your taxes from abroad, no? I have yet to actually have to file.

There are some really savvy individuals that post on Expat.com that could answer I am sure.

lp

awalles
  11/20/2020 09:42 EST

Visa, taxes and insurance has been covered well.

I have a bank account with Bancolombia and also have one in the states. I've tried wire transfers and except for fairly large amounts they seem rather expensive. You might try using ATMs (cajeros). It costs me about $3-8 to take out about $600 USD and I can do that every day. My bank here charges me $12.640 COP a month for the privilege of banking there That's roughly $4.00USD. BTW If you use $1=$3000 pesos as a rough figure you can do some quick conversion. I know it's always more or less, but it'll get you in the ball park.

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eastern
  11/20/2020 12:18 EST

Wouldn't it be possible to write a check on your US bank and deposit it in your Colombian account. Just wait the time to clear check.

JasonKlien
  11/20/2020 14:08 EST

Yes Colombia banks will nickle and you to death BUT I maintain my Bancolombia account for emergencies...........

......... like the one I had a few days ago when I left Palomino (the coast) and was half way headed to Riohacha and needed pesos........

.......wham in a small village town found a Bancolombia, saved me lots of hassles.

Waltercito
  11/20/2020 14:18 EST

A FB expat in Bogota told me "Do this - it'll change your life." He was right. I could rant about Bancolombia and Colpatria and on and on, and he said open a Schwab account. So I did. Turns out their debit card gives me less problems than either Bancolomiba or Colpatria plus, they credit you all local ATM fees. Now, my pensions arrive there, and I can pay bills or transfer to WellsFargo, where I have international transfers set up to Bancolombia. THEN, I transfer from Bcol to Colpatria, where there are no fees. It's what evolved, and it works..... But Schwab is great.

mtbe
  11/20/2020 18:36 EST

Waltercito:

There are no fees for transferring from Wells Fargo to Bancolombia???

Paco23
  11/20/2020 20:05 EST

Mtbe. They Wells Fargo did have a deal going where you could transfer up to a certain amount free. But I believe it was only to bancolombia. I think if you check the website they might still have it.

My issue is Wells Fargo is a terrible bank and secondly they require you to go into a branch to set up the account which I haven’t been in the us in a couple years so I couldn’t do that. Third I think the limit might be kinda low so you might have to do a couple transactions a month.

Bear in mind I investigated that option a couple years ago so the info might be old.

eastern
  11/21/2020 10:17 EST

For no ATM fee and reimbursements Fidelity works like Schwab.

elpdiver
  11/21/2020 10:49 EST

On several occasions I have gone into the bank with my passport and a Colombian citizen with their passport (my wife) and withdrawn fairly large amounts from my account ($5,000 U.S.). I don't recall the exact exchange rate as it was a few years ago; but, it was close enough that I didn't want to try and string together a bunch of ATM withdrawals over a week or so to get the $5.ooo dollars.

elpede

bigjailerman
  11/21/2020 11:05 EST

Been using Schwab in Colombia since 2012... My favorite.

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