- Posted by Colombia
- On Monday January 23rd, 2023
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Colombia has a favorable investment climate thanks to its economic growth and its ability to face external
crises, along with legal security, stable macroeconomic indicators, a highly qualified workforce, and access
to global markets.
Colombia is a country that offers a favorable business environment with a stable legal framework.
Furthermore, the national government has introduced several incentives to support and encourage
foreign investment. These include the free trade zone regime, the Vallejo Plan, customs duty reductions
or exemptions for imported raw materials and machinery, VAT exclusions for imported equipment,
incentives to invest in science, technology, and innovation, and incentives for several economic sectors,
including agriculture, tourism, and the automotive industry, among others.
INCENTIVES TO THE HOTEL AND TOURISM
Special tax rate of 9% for income related to tourism
a) For 20 years for projects developed between December 31, 2020, and December 31, 2030, in
municipalities with populations of up to 200,000 inhabitants. Such as:
- New Hotels.
- Renewed or expanded hotels.
- New theme park projects.
- New ecotourism and agrotourism parks projects.
- New boat dock projects.
SALES TAX ON IMPORTS, MANUFACTURING, CONSTRUCTION, OR ACQUISITION OF PRODUCTIVE FIXED
– VAT registered companies will be able to discount the VAT paid to acquire, build, or manufacture
and import productive real fixed assets from their income tax payable, including VAT on services
required to make them available for use.
FIRST EMPLOYMENT DEDUCTION
Taxpayers can deduct 120% of the salaries paid to employees under the age of 28 if it is their first job.
Taxpayers with investments in research, development, and production of electric power from NonConventional Energy Sources, which includes green and blue hydrogen (NCES or FNCE for its acronym in
Spanish); and measures for Efficient Energy Management; including Smart Metering, shall be able to
deduct up to fifty percent (50%) of the investments’ value for up to 15 years, starting on the fiscal year
following the year in which the investment operations start. The deducted value in no case shall exceed
50% of the taxable income as estimated before subtracting the value of the investment.
This is a special 20-year tax regime for income taxpayers who generate at least 400 direct jobs (250 in IT
industries) and make new investments in Colombia for a minimum of 30 million tax units (UVT, as per its
Spanish acronym) (approximately $1.140 trillion COP in 2022, USD 291,000,000). TRM COP: USD 3.915
(January-June 2022 average) .
Benefits under this regime include a 27% income tax rate, exclusion from the presumptive income tax
regime and dividend tax, depreciation benefits, and exclusion from the equity tax.
Additionally, a legal and fiscal stability regime is created for these investments, which will guarantee the
benefits in case of unfavorable amendments to the regime in exchange for a premium of 0.75% of the
annual investment value, for up to five years. Investments in hydrocarbons and mining are excluded from
INCENTIVES FOR INVESTMENTS AND DONATIONS TO SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT:
Income taxpayers who directly or indirectly make investments or donations to projects classified as
research and technological development shall have the right to deduct 100% of them from their net
income in the fiscal year in which they are made. Additionally, 25% of the value invested in these projects
can be credited in the fiscal year the investment was made.
TEN-YEAR INCOME TAX EXEMPTION TO DEVELOP RURAL COLOMBIA
Ten-year (10) income tax exemption for companies who invest in agriculture, fishing, and rural
development to increase productivity. To have access to this incentive, companies must be registered as
a legal entity as of December 28, 2018, start economic activities prior to December 31, 2022, request
investment approval from the Ministry of Agriculture before October 14, 2022, and generate annually a
minimum number of direct jobs and investments to comply with the requirements.
(2022) Invest in Colombia. Available at: https://investincolombia.com.co/en (Accessed: January 2023).