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Taxation in Colombia is determined by the Congress of Colombia, the Department of Colombia Assemblies and the Municipalities of Colombia councils, which determine what kind of taxes can be levied and which rates can be applied. The country inherited a harsh and diffused taxation policy from the Spanish Empire characterized by a heavy reliance on customs duties, due to the relatively low capacity for local production of goods. Both the national and local governments' budgets run significant deficits.
National taxes are administered by the National Tax and Customs Direction (DIAN).[1] Some of these taxes include:
The value-added tax (IVA) is a variant of the sales tax. This tax is 16 percent of the price of merchandise, goods and services with some exceptions: public transportation, water supply and sanitation and the transportation of natural gas and hydrocarbons. The DIAN recognizes two separate categories (regimenes) of IVA: common and simplified. The first refers to businesses with estimated patrimony over 68 million Colombian pesos (about 34,000 USD), and the second refers to those with patrimony less than that. Although both are obligated to pay the same percentage, the simplified taxpayers are not obligated to conduct separate bookkeeping for the IVA or to generate invoices.
The stamp tax (Spanish: impuesto de timbre) is a tax on the expedition of an official document (or on the validity of private documents), such as a contract or contractual modification.
This was a tax imposed during 1998-1999 which covered all financial transactions, including banknotes, promissory notes, wire transfers, EFTPOS, internet banking, bank drafts and bank cheques, money on term deposit, overdrafts, installment loans, documentary and standby letters of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off-balance sheet exposures, safekeeping of documents and other items in safe deposit boxes, currency exchange, sale, distribution or brokerage (with or without advice), unit trusts and similar financial products. The tax rate was 0.2%.[2]
This tax requires the annual payment of 0.3% of the total patrimony of people with patrimony estimated over 3000 million pesos (about 1.5 million USD). It is a temporary tax to help the military.
The table below shows the tax rate in units of UVT (Unidad de Valor Tributario), where 1 UVT = $26.049 in 2012.[4]
This group of taxes includes:
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