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Colombia’s Nomad visa tax impact

Tax & Immigration Law

A frequent question from our clients on immigration issues is the tax impact of the digital nomad visa, the first thing to mention is that there is no special tax treatment in Colombia, and therefore the general rule on the principle of tax residence provided in Article 10 of the Tax Statute must be applied.

We need to keep in mind that any foreigner can hold a type V visa for digital nomads if they prove they provide services as remote workers to foreign companies without presence in Colombia or for entrepreneurs who wish to start their business in the country with a 100% digital presence in any industry, along with other requirements, which can be found in the link below.

This is how every foreigner who complies with the time provided to be a tax resident ((183) calendar days including days of entry and exit of the country, during any period of three hundred and sixty five (365) consecutive calendar days) will have the following impact:

  1. There is a general requirement to pay taxes on worldwide income, i.e., assets, liabilities, income, and costs must be included; however, when fiscal and accounting projections for the operation are made in Colombia, the amount to be paid is generally low.
  2. If the country of origin has a double taxation agreement with Colombia, apply the most convenient income rate for the foreigner. In our experience and tax planning projections often do not take into account this important point.
  3. If there is no tax credit agreement, if the foreigner who declares in Colombia declares in another country, the taxes paid in the other country are discounted in Colombia, through the tax credit. This is achieved through an accounting exercise where it is determined that he/she is obliged to pay local taxes, it is possible that he/she can reduce or even eliminate his/her tax obligations in Colombia.

Now, if the foreigner obtains an income in Colombia for a service rendered from abroad, the tax will be subtracted at the source in Colombia and he will not be obliged to declare it in Colombia.

For more information and a tax projection, please contact us. We will be glad to advise you and assist you in making the best decision for you!

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