On 15 April 2021, the Colombian government has submitted new Tax Reform Bill (Sustainable Solidarity Act) to Congress. The Bill modifies corporate income tax (CIT), value-added tax (VAT) and personal income tax. The main tax measures of the Tax Reform Bill are as follows:
Corporate Income Tax (CIT)
The Bill proposes to reduce the CIT rate to 30% from the current 31% starting from 2022 under Law 2010. 3% surtax will be applicable for 2022 and 2023. The surtax is applicable for both the following rate and the CIT rate is applicable for 2022 and 2023 as well:
- Up to approximately US$ 139,000- CIT rate is 27%
- Over approximately US$ 139,000- CIT rate is 33%
This surcharge would be treated as an advance before the year in which the surtax would be due.
Value Added Tax (VAT)
The Bill imposes a 19% VAT rate to personal computers and laptops of value up to approximately US$ 500, and smartphones and tablets of value up to approximately US$220. The Bill also eliminates the VAT exclusion for certain goods and services which is currently applicable.
Personal income tax
The Bill proposes to increase dividend thresholds to more than approximately US$ 8,000 (from US$ 3,000), and the tax rate to 15% for individuals resident in Colombia. The Bill also proposes to increase tax rates applicable to individuals which are up to 41% based on the tax value unit (UVT) for 2022 and 2023. This also made amendments to solidarity tax, temporary wealth tax, environmental taxes, consumption tax, and also proposes an exemption from certain employer obligations.
