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Production guide / Taxes
Taxes
Below are some of the aspects of Colombian tax legislation designed to help producers to better plan their work and correctly calculate budgets and expenses.

The following information is only a guide and we recommend you consult with professionals before starting any audiovisual production in Colombia, since application of taxes and duties will depend on each production’s unique characteristics.
Aggregate Value Tax (IVA)
Sales tax is paid on the sale of fixed assets in the form of real estate, imported fixed assets, and services provided in Colombia at rates varying from 1.6% and 35%.  Generally, sales tax is 16%. 

The IVA (Aggregate Value) tax does not apply to property temporarily imported for a short period such as equipment and other elements to be used in film productions and film-related activities.
 
Rental of property other than housing (such as locations) is subject to a 10% tax. . Special sales tax regulations apply to certain parts of the country such as the Amazon department and the archipelago of San Andres and Providence and Santa Catalina.
IVA tax rebate
International audiovisual productions may request a refund on IVA tax paid for services purchased in Colombia since the Colombian Tax Statute (Article 481, Paragraph e) declares all export services exempt from this tax; this includes services provided in the country under a written contract and used exclusively outside the country by companies or persons with no business or activities in Colombia, as per requirements listed in the regulation.

To access the aforementioned benefits, Decree 2681 of 1999 requires registration in the National Goods and Services Exporters Registry.

To be eligible for this exemption, a written declaration of export service contracts must be filed with the Ministry of Commerce, Industry and Tourism before monies are refunded and the corresponding record must be kept by the exporter as proof of the transaction.

This statement must contain the following certified information:
  • The contracted service must be used entirely and exclusively outside Colombia
  • The amount of the contract or amount to be reinstated
  • Declaration that the contracting company has no business or activities in Colombia
  • That the service is exempt according to Article 481 of the Tax Statute
  • That no withholding tax applies for any income from exports as per Article 366-1 of the Tax Statute.
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Income Tax
Generally speaking, private citizens and corporations in Colombia are subject to income tax at rates ranging from 0-33% for individuals and 33% for corporations.

Foreign individuals and corporations with no legal residence or domicile in Colombia are subject to income tax based on income acquired in Colombia and originating in transfer of property located in Colombia and on exploitation of tangible and intangible goods in Colombia, and services provided inside the country.

The law uses withholding tax as a means of collecting income tax in advance, but individuals or corporations with no residence or domicile in Colombia do not qualify as tax withholders.  This means that foreign film producers with no domicile in Colombia making third-party payments are not responsible for withholding taxes at the source.

Foreign corporations are generally not responsible for declaring income tax in Colombia if their total income is subject to withholding tax.  Exceptions to this rule (among others), are payment made for sales, construction contracts (“key in hand”), machinery rentals, and international transportation.
Stamp Tax
This is a deed tax on private documents or public deeds valued at more than $142,578 million pesos (COP) collected at the time of withholding at the source.

The 2009 Stamp Tax is 0.5% and according to Law 1111 of 2006 the tax will be reduced to 0% starting in 2010.

The duty on contracts signed for an undetermined amount is effective from the time the tax is incurred, meaning the date the document is filed.  Therefore, this tax must be settled and paid at the time the document is signed.

For example, if a foreign producer signs a contract with a Colombian national for more than $142,578,000 – for whatever reason – the Colombian national receiving the payment will pay 0.5% tax on this amount to cover the stamp tax.
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Comments in this document have been addressed in a general fashion and are based on what PricewaterhouseCoopers considers a reasonable interpretation of the law in effect at the time they were addressed and are not intended to provide any kind of tax or legal advice regarding the matters contained therein. "PricewaterhouseCoopers" refers to the Colombian firms forming part of the global PricewaterhouseCoopers network, each being a separate and independent legal entity.