Taxes In Colombia | Interview With THE Accountant In Medellin (2020)
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Sam & Tacha will show you the real Medellin from an Expat perspective!
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Finally! We got the opportunity to interview Paula Cruz the most known accountant for Expats in Medellin!
There are tons of misinformation out on the internet talking about taxation in Colombia. It goes to the point where people don't consider moving to Colombia because they think they have to pay a lot of taxes not knowing the truth.
In this video, we want to debunk those myths once and for all!
We will talk about some numbers to put everything into perspective and give you an actual idea of how much you may have to pay for your taxes in Colombia.
For more details about taxation in Colombia, check out our blog:
www.how-to-expat.com/post/taxes-in-colombia-real-talk/
Get in touch with Paula Cruz: usatax.co/
Don't hesitate to contact us with any Expat questions you might have. No matter if you've got questions about Medellin, Bogota, Santa Marta or Colombia in general. We would love to support you on your journey.
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ABOUT THIS CHANNEL
This Channel's mission is to help and educate Expats, soon to be Expats and travelers.
In order to simplify their Expat and travel journey abroad.
We provide information, especially for Latin America.
Are you planning to visit or even relocate to Panama, Colombia or Ecuador?
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#HowToExpat #Accountant #TaxesInColombia
@HowToExpat 4 жыл бұрын
Sam & Tacha will show you the real Medellin from an Expat perspective! 💡 Sneak Peek Services 💡 www.how-to-medellin.com/sneak-peek-services
@libardobarreto5874 2 жыл бұрын
Is this link still working? When click on it it takes to some sort of spam website
@StevenMRose 4 жыл бұрын
My wife and I have worked with Paula and she is incredible! Also she does help with Visa processes too. 100% recommended for both taxes and visa help.
@the701squad1 4 жыл бұрын
thanks so much
@marksanchez9093 2 жыл бұрын
What’s her address in medellin
@Pitbullflboy 2 жыл бұрын
Hi Steve...Can you please give me Paula's contact info? Thank you so much!!!!!
@Jepi369 9 ай бұрын
@@marksanchez9093 Take $300 USD with you if you find her address
@andrewhughes712 4 жыл бұрын
Super information, clear and professional well done both of you for helping the potential ex-pat community out.
@stevemana1749 4 жыл бұрын
Another great info video! And resource! Mil Gracias también!
@NickDemski 4 жыл бұрын
Thanks for sharing! I love learning more about Colombia! What a great place to live!
@donbsweet5001 4 жыл бұрын
@HowToExpat, it would have been nice, if you had gathered some questions from your followers before the interview. I have to say she didn't make the matter any clearer. Unless your single source of income is the average social security income, Colombia will tax you. Pensions, SS income, 401k/IRA, earned interests are all taxable in Colombia, on top of that, you have to report your total wealth which is also taxable after a certain threshold. You don't need a tax advisor to know this much. Tax advisor can be useful to find deductions and some not so obvious loophole, that is all. They have to use the same tax guide. They are not consistent, each tax advisor will give you a different assessment.
@rafaeljimenez2769 3 жыл бұрын
A little confused. If I have a pension and SS without any other income, would it be taxed?
@trinawetter3593 2 жыл бұрын
How do you know this information? About 401k/IRA. Interest.
@plumbingmaster3982 Жыл бұрын
i have social security and pension @2500 a month ..do i have to pay taxes if live more than 183 days in colombia this is still not clear
@TheFlairGuy Жыл бұрын
Hopefully this info is accurate! One of the very very few useful tax videos I've seen on KZfaq. Thank you!
@Dud-in9iu Жыл бұрын
Obvious question is how is the Colombian government going to know if you own assets outside of Colombia unless you tell them? Just don't tell them and you don't have to get doubled taxed. As an American, I own rental properties in both the U.S. and Central America. I pay property taxes to each of the local governments in each country, but I don't tell each govt that I own assets in the other; that would just be foolish. You already get taxed in the host country, no need to get double taxed. If I lived in Colombia, I would claim my pension as income and nothing more unless I owned a business or other assets in Colombia. If you claim a small portion of your income, the govt will leave you alone b/c they are getting a small pound of flesh out of you. No need to give up a leg to one country and the other leg to another.
@plumbingmaster3982 Жыл бұрын
you have to give them bank statements and letter from your pension for proff to retirement visa..thsts how they know how much you make
@CARACAS1 3 жыл бұрын
Thank you...awesone information
@LifeWithCandis 5 ай бұрын
Helpful thanks!!
@johnpazera4581 3 жыл бұрын
Great video. We also use Paula Cruz. Highly recommend her!
@y2k4ed 3 жыл бұрын
I have my doubts how accurate the video is but I can´t seem to find an English speaking accountant in Armenia. I hope to try to use Paula because I paid so much income tax on $55 million pesos social security. In USA I would pay Zero. If I can´t reduce it perhaps it´s time to go to Ecuador?
@y2k4ed 3 жыл бұрын
I spoke with an accountant today. Retirement income is discounted 25% for tax purposes. This is rather than getting deductions. Income from investment is taxed at 30%.
@peterbirbs1471 Жыл бұрын
So sad. I would have liked to live in Colombia when I retire. But I'm not paying taxes twice! I guess I'll just be visiting for 179 days
@Jamminn555 4 жыл бұрын
Fantastic! Thank you Sam and Paula for that excellent information on taxes in Colombia.
@y2k4ed 3 жыл бұрын
Benjamin Bidlack Read my most recent response. Don’t trust the statement that the first $105k of retirement is not taxed. I communicated with DIAN.
@carmenortega3907 2 жыл бұрын
Does she makes filling taxes for usa residents that works in Colombia?
@comrade916 3 жыл бұрын
I wonder if a distribution from a 401k plan in the U.S. is considered pension and taxed at zero % in Colombia?
@gabequezada2066 10 ай бұрын
Sam.. How much is the typical closing costs when purchasing a property in colombia? Thank you in advance
@trinawetter3593 2 жыл бұрын
How do I contact her? It brought me to a website and still hasn’t contacted me.
@y2k4ed 3 жыл бұрын
Here’s the deal on Colombian Income tax. If you made over US $12,600 on your retirement income expect to pay at least 7.1% on the gross. Apparently the first $12,600 is taxed if you make over this amount in 2019. You can try to underreport but if you get caught there’s going to be additional fines. If you go for citizenship the Department of Foreign Affairs will want to compare income reported to actual retirement benefit gained. Plus they will want money towards next year’s taxes.
@inspanishmedellin 11 ай бұрын
Hi , what about a foreigner no tax resident with patrimony exceeds 4500 UVT in Colombia but incomes NOT exceeds 1400 UVT and not retención en la fuente . Should he file ? Thanks
@AmatriceBand 4 жыл бұрын
The problem over there is that the sales and property taxes are very high
@y2k4ed 3 жыл бұрын
To Adrian Gutierrez asking about 401k money. I know that it would be taxed as world wealth in Colombia but I don’t know if before or after withdrawal. Colombia does not care how much you get taxed in USA. This is a me first taxing government. I say screw it. 6 months here and 6 months elsewhere. Ecuador is lovely. It’s a better choice.
@rocambole93 2 жыл бұрын
totally agree
@Felipe-fn7fp 4 жыл бұрын
This was fascinating, thank you and Paula Cruz for taking the time to share this. So if someone gets residence via the investor visa and maintains permanent residence (only requiring 1 day in the country every 2 years), they won't owe taxes as long as they stay in the country under 183 days a year. So one can be a permanent resident in this way without owing taxes on global income. Is this correct?
@y2k4ed 3 жыл бұрын
Hear me now and believe me later. Colombia has a workaround. They have a sliding scale calendar. So say for example you are here for 180 days. You leave the country for 185 days then you return for 180 days. DIAN has it set up that you will owe taxes. That 365 calendar days can be the 185 days you left until the 180 days you lived in the country the second time. The Government is screwing with us dude.
@japhethmiller 3 жыл бұрын
Does anyone know if the taxes apply if you are staying in Colombia on a Student Visa for over 185 days?
@HowToExpat 3 жыл бұрын
The visa is not what matters, what matters is if you stay in Colombia for over 183 executive days. That's when you have to file taxes, that doesn't mean you have to pay though. Make sure to get in touch with an accountant to ask your specific questions.
@rsmith2254 2 жыл бұрын
Is there a link for this accountant?
@mirkobergamo6616 5 ай бұрын
The Average U.S. retired person that stays more than 183 days a year will have to file Colombian taxes, Most Social Security is more than 15k a year (couple?). Most retired Americans have assets exceeding 45K in savings and investments. Colombia only attracts low income Americans this way. A (non) double taxation treaty should be signed like many other nations. Money invested by foreign interests will then better benefit the Colombian people and gov. It's a big no go for most people due to the unfriendly tax regime. I would be living on San Andres Island if it were different.
@prazertv 3 жыл бұрын
35% taxes is pretty much what most Americans would have to pay. That doesn't seem so inviting. If there is no way to reduce the tax percentage, that's a huge turnoff. You might be better off in the US with a really good accountant
@y2k4ed 3 жыл бұрын
Ecuador is not that far away and it´s my understanding that taxes are only on income earned in Ecuador. Think of that baby!
@plumbingmaster3982 Жыл бұрын
yep thats my understtanding this ..video not clear...bottom line you have to pay taxes on your pension no good
@y2k4ed 4 жыл бұрын
I want Paula to review my tax form before it gets submitted. I have a Colombian accountant living in Canada who just did my taxes. I get Social Security and a small amount each month on an insurance annuity. Here is what he said: ased on the income from your pension in USA converted into Colombian pesos, it would be equivalent to $58.9 million. Then we add the interest you received from Bancolombia. This would create a tax payable of $4.179.000 plus $522.000 as an advance for next fiscal year that has to be paid this year. The total tax payable would be $4.701.000
@hawkeye98 3 жыл бұрын
We are going thru this right now and the rules are so confusing it’s ridiculous.
@y2k4ed 3 жыл бұрын
They have these so called baskets of income and wealth. If you exceed the maximum they nail you. In USA the first $12,000 USD is not taxed on the standard deduction. Based on what happened to me last year (no KY jelly) the Colombian government taxes everything including the $12,000 if you exceed I think it was $12,600. So if you got $12,601 they nail you for the full amount. They don´t give a rats ass if you have 3 children, a mom, a wife or relatives in dire straits that you helped.
@kurtisjohnson 4 жыл бұрын
This channel is Sesome
@belle42 11 ай бұрын
Thank you for the video! I'm wondering...Would it be possible to have subtitles added? Her accent is quite heavy and difficult to understand.
@gringoviejo1935 3 жыл бұрын
for those lucky few with enough income to pay taxes, if those taxes are high enough, it might be reasonable to split your year between 3 countries. just don't be a resident in any given country for the tax residency period: 5½ months in Colombia, 5½ months in Ecuador & a month in Peru or back in Switzerland - for example.
@y2k4ed 3 жыл бұрын
Taxes for the year 2021 will be through the roof if I don’t split my year this year. I’m thinking Ecuador, Peru and Chile. Maybe 2 months in each?
@erichaynes7502 3 жыл бұрын
I agree GV, I'm going to "move" to Colombia this summer but I'm never going to stay more than 180 days in any given year. If I got a retirement visa there in Colombia I'm sure they'd get at least 2K-3K a year on my 40K pension, and that's on top of what I pay to the IRS. Colombia is nice but not nice enough to pay unnecessary taxes.
@rocambole93 2 жыл бұрын
living in several countries is ideal in theory but it offsets the cost of living benefit if you have to maintain a main residence in the USA in my case
@gringoviejo1935 2 жыл бұрын
@@rocambole93 if you're a US citizen as i am, Uncle Sam wants our money regardless. if one has enough income, it may be worth it to buy a passport. i'm below that threshold, though.
@gringoviejo1935 2 жыл бұрын
@@y2k4ed not really needed unless you just want to do that. just spend less than 180 days in any given country. alas, as a US citizen, i owe Uncle Sam regardless.
@chrisbutler6258 4 жыл бұрын
I have been to Colombia, and most recently Medellin. Its a beautiful country, but not one of the cheapest to live in.
@prazertv 3 жыл бұрын
It's looking more and more expensive the more I learn about it
@prazertv 3 жыл бұрын
Which countries are you looking at? Any thoughts on Portugal?
@chrisbutler6258 3 жыл бұрын
@@prazertv I have considered it, It looks inviting, but Ive been looking at Ecuador, Peru, panama, I,m on this side of the planet, but yeh Portugal has popped up as a potential spot.
@prazertv 3 жыл бұрын
@@chrisbutler6258 I looked into Panama a bit and I love the tax implications, but I'm not crazy about the weather. I like the diversity in weather in Columbia, but taxes are no bueno. Haven't considered Peru or Ecuador. Might have a look. I was considering Brazil, but I know some people who are selling their homes to move to Columbia.
@prazertv 3 жыл бұрын
@@chrisbutler6258 I've expanded my search and am now considering Dubai. There are zero taxes in Dubai. It is more expensive, but zero taxes is too tempting to ignore
@trinawetter3593 2 жыл бұрын
What is her information. We would like to chat with her
@ADFDGGE 4 жыл бұрын
Not good for stock market investors!
@prazertv 3 жыл бұрын
I'm very interested in moving to Columbia, but the taxes there are pretty ridiculous. 45K in assets to be taxed is not that much money.
@y2k4ed 3 жыл бұрын
Eubecha boots baby.
@zimben8 Жыл бұрын
Hola and Hello Tacha and Sam. I'm Ben from Switzerland. I hope u can help me. Your Video sounds very interesting but i'm a little handicapped and have sometimes problems to understand, also my hearing is not so good. That's why i get a Swiss State Pension for life.I'm 60 years old retired and would love to come back to Medellin to life there until my end... My Pension is about $43'000 - COP 204'000'000 , does that mean i will pay NO income taxes in Medellin ? Muchas Gracias 🙏
@plumbingmaster3982 Жыл бұрын
ja ja good luck...i understand you have to pay taxes
@Ocean245 4 жыл бұрын
If you’re on Social Security do you pay tax on that?
@y2k4ed 3 жыл бұрын
Absolutely.
@hue75 4 жыл бұрын
Sam, I highly recommend you obtain/provide more detail on the wordwide assets part. Many expats/potential expats that reach retirement age after a lifetime of working, saving, and investing are going to gave assets that are WAY above the 44k threshold and could be subject to 35% tax! That is very scary and more specifics would be helpful. My guess is she would not want to provide specifics unless one pays for a consultation with her.
@HowToExpat 4 жыл бұрын
What we were trying to portray with the video is that the taxes in Colombia are not an exact science. It really comes down to your personal situation. Especially assets are taxed very low. I think around 0.02% or something. As we said in the video if you are a retiree with around 3k-6k/m pension and 1 or 2 houses in the states don't worry about the taxes in Colombia. Most clients we have and people we know in that segment pay less than USD 1000/h. Hope it helps.
@hue75 4 жыл бұрын
@@HowToExpat I get it, Sam. For those of us who are used to specifics and order, it's hard to dive into something based on lack of specificity. What happens if you're the guy who finds out he owes $20,000 in taxes (rhetorical question)? Bottom line, one needs to consult a tax attorney or accountant before deciding to retire in Colombia. It's a shame that Colombia is so short-sighted when it comes to taxing foreigners who are here pumping millions into the economy. It's really dumb. And to get on my soapbox again, someone's worldwide assets and net worth are not any of Colombia's business. That's really immoral to tax people on assets that Colombia had nothing to do with. USA tax policies aren't much better, to be fair.
@hue75 4 жыл бұрын
And to hop on to my soapbox again, all the time effort and money that a person spends along with tax consultants and attorneys to pay $1,000 or less in taxes is a waste when that thousand dollars would have gone right back into the economy, probably to people that need it more than the tax accountants and politicians. Also, how many expats have been scared off because of Colombia's tax policy? How many millions in economic benefit have been lost? This arbitrary taxing of foreigners who don't earn income in Colombia is really dumb (if not immoral) to the core and it costs more than it actually benefits. Same as in the USA and Europe, politicians can't think clearly when it comes to taxation and economic policy.
@HowToExpat 4 жыл бұрын
Yep that's Latin America, bot everything is based on best business practices.
@alexalbertorendonperez264 4 жыл бұрын
hue75 Your fears are due to the pragmatic relationship of the tax, under the philosophy of “equity” that comes from the Middle Ages, but in the background it has nothing ethical and less equitable, especially in the United States. That concept changes in Latin America, especially in developing countries like Colombia where it is: “you earn more, you pay more; you earn less, you pay less ”that is why each case is individualized. the opposite happens in the United States, when everyone is obliged to pay 35% of their income and in theory the concept of equity is fulfilled, but in reality, large corporate funds end up paying less than 15% annually. what is not fair ... is immoral! I believe that the expatriate diaspora is the sign of the suffocation to which they are subjected in their countries, so the search for countries where their pension is competitive and achieves the goal of saving. because I see many pensioners working at Walmart overtime, in order to pay, what their lifelong savings do not allow them to pay ... That which many of us call MATRIX !!
@craiggallup5706 4 жыл бұрын
Here is a "fun" question. Retired Americans often have IRA retirement accounts. The traditional ones tax the amount of annual withdrawal as income. Other ones are structured differently but they aren't regular bank account assets. So would monies in such specialized retirement accounts count as part of worldwide assets for Colombia? Talking about the often very large balances in the accounts now as opposed to the annual amount taken out of that balance. Also of course many expats open Colombian bank accounts. Based on the info in the video, it might be wise to stay under the taxation limit on incoming transfers and take any additional by a non-Colombian bank ATM card, yes?
@PaulaCruzRio 4 жыл бұрын
Those accounts are not considered as assets in Colombia
@craiggallup5706 4 жыл бұрын
@@PaulaCruzRio Thank you very much for that answer which is of course good news for all the people with those types of accounts which I suppose includes the majority of American retirees. Not so good news and out of your control of course is how such accounts have crashed on the last few weeks because of the stock market meltdown. Oh well!
@y2k4ed 3 жыл бұрын
@@PaulaCruzRio I am not an accountant but from what I have learned this is taxable as world assets. I’d check with DIAN. I’m a Gringo and have done some homework.
@y2k4ed 3 жыл бұрын
@@craiggallup5706 Be careful. I showed DIAN the things that Paula spoke about. There is a disconnect somewhere. But DIAN never got back to me. The representative only sent an image of the different baskets of income. Paula, I can send you the image for 2019 taxes.
@julioblanco 4 жыл бұрын
Are the brackets per individual or per couple?
@OsageArcher1066 4 жыл бұрын
Per individual. There is no provision in Colombia for joint filing.
@PaulaCruzRio 4 жыл бұрын
Individual, we file always separated
@PaulaCruzRio 4 жыл бұрын
@Buddy Odell 45k is the amount from which somebody would have the obligation to file taxes, but if it's the only asset, there is not a tax payable.
@y2k4ed 3 жыл бұрын
If you get a residency visa it means you have enough income that you are obligated to pay tax.
@y2k4ed 3 жыл бұрын
@@PaulaCruzRio Our car is in my wife’s name. I believe she had to file taxes. She did not have to pay but she owns half the house and the car.
@Pitbullflboy 2 жыл бұрын
Can you please give me Paula's contact info? I would be a retiree coming to Colombia. GRACIAS!!!
@gringoviejo1935 4 жыл бұрын
only 2% of the population pay the taxes?!?
@OsageArcher1066 4 жыл бұрын
Out of a country of about 50 million, only about 3 million filed a declaración de renta for 2018, according to the article linked below. But less than a million, 910,000, actually paid any taxes - less than 2%. And only about 7,000 paid the impuesto al patrimonio, a tax on assets/wealth of over 5000 million COP - about 1.5 million USD. Colombia is a poor country and most people are poor by US standards. www.eltiempo.com/economia/finanzas-personales/quienes-deben-pagar-renta-en-colombia-327356
@y2k4ed 3 жыл бұрын
For anyone interested. I am on social security. My $58 million pesos income is taxed at 7.1%. The US $105,000 number that Paula offers I believe is not correct. I have submitted this company's information to DIAN for review. I like the niceness that Paula offers but I owe a lot of money to the Colombian government. I'm trying to find out what tools DIAN can use to collect? There is a fine for paying late. They have an interest rate of 28% on money owed.
@JxnTrader 3 жыл бұрын
Did you ever get a satisfactory answer to any of your comments? It's incredible how many different answers you will get to the same question.
@y2k4ed 3 жыл бұрын
@@JxnTrader My accountant in Canada said the same thing. He even said that the people at DIAN don’t even know the right answers.
@y2k4ed 3 жыл бұрын
@@JxnTrader I never got a response from Paula or DIAN. It´s like they are oblivious to everything.
@OWEN-CASH 3 жыл бұрын
So if you want to impress a Colombian girl with your income just tell them "I have to pay taxes".
@prazertv 3 жыл бұрын
What if you don't care about impressing a Columbian girl, but you make a lot of money? Are there loopholes like in the U.S. to lower taxes? I might have to find another country. The taxes in Columbia look comparable to the U.S.
@y2k4ed 3 жыл бұрын
@@prazertv From what I have learned the deductions never seem to apply to you.
@1879gym 4 жыл бұрын
Your threshold for rich, is beyond amusing.... sort of misleading to be perfectly clear....also income is income regardless of the label ( pension, etc)
@Jepi369 9 ай бұрын
Paul Cruz is charging $300 USD for just a initial consultation 😮 when I click on the link
@carbago2 Жыл бұрын
En colombia no se tiene socialsecurit y perdon tienes mala información sobre tributaria sobren los inuestos que son mas altos que usa .pero sele abona el ingles que esta bien con pequeños erores pero bien.
@carbago2 Жыл бұрын
Disculpame jovenes pero el iva que es muy altos y son taxes y todos pagamos taxes en colombia por otro lado si tienes propiedades se pagan muchos taxes .ok