Colombia is strategically located between North and South America with Pacific and Caribbean coast access, making it an attractive hub for import/export businesses. DIAN administers both customs and national taxes, making compliance a combined tax and customs exercise. This guide covers the key tax obligations for foreign companies engaged in Colombian international trade.
Key Taxes for Import Businesses
| Tax/Duty | Base | Rate |
|---|---|---|
| Customs Duty (Arancel) | CIF value of goods | 0%–20% (varies by product) |
| VAT on Imports (IVA) | CIF + customs duty | 19% (general) |
| Anti-dumping duties | Specific products | As determined by MINCIT |
Importing Goods: The Process
- All imports must have an Import Declaration (Declaración de Importación) filed with DIAN through MUISCA
- You must have a registered import license (habilitación como importador) in your RUT
- Most goods require a Visto Bueno (pre-approval) from sector-specific agencies (INVIMA for food/medicine, ICA for agriculture, etc.)
- IVA paid on imports can be recovered as an input tax credit if you're a Responsable de IVA
Key Tax Benefit: IVA Recovery on Business Imports
If your business is registered as a Responsable de IVA and uses imported goods in commercial/productive activities, you can recover the 19% IVA paid at customs as an input tax credit against your output IVA (sales). This significantly reduces the effective cost of importing — but requires meticulous record-keeping and proper invoice management.
Exporting Goods: Strong Tax Incentives
Colombia strongly incentivizes exports:
- Zero-rated IVA (0%): All qualifying exports are zero-rated for IVA purposes, meaning you don't charge IVA on export sales and can recover all input IVA paid on goods/services used to produce the export
- DRAW-BACK program: Refund of customs duties for goods imported and then re-exported (processed or incorporated in exported products)
- Free Trade Zones (Zonas Francas): Reduced corporate income tax rate of 20% (instead of 35%) for companies operating inside Free Trade Zones
- ALTEX Register: High-volume exporters can apply for preferential customs treatment and expedited clearance
Free Trade Agreements (FTAs)
Colombia has negotiated FTAs with the US (TLC), EU, UK, Canada, Chile, Mexico, Peru, and others. These agreements reduce or eliminate import duties for qualifying goods. Properly using FTA preferential tariffs requires:
- Certificates of Origin (Certificados de Origen)
- Rules of Origin compliance
- Proper tariff classification (HS Codes)
Anti-Avoidance Measures on Imports
DIAN actively fights undervaluation of imports (understating CIF to reduce duties/IVA). DIAN uses reference price databases to compare declared import values against known market prices. Significant undervaluation can trigger fines, seizure of goods, and criminal charges.
Corporate Tax on Import/Export Business Profits
Profits from import/export business conducted through a Colombian entity are subject to the standard 35% corporate income tax on net taxable income, with the same DIAN filing requirements as any other Colombian company.