Understanding Colombia VAT Nexus Rules

Understanding Colombia VAT Nexus Rules

Nexus determines whether your business has a VAT obligation in Colombia. This article explains the nexus rules that apply to resident businesses and non-resident sellers, and what triggers a registration requirement.

What Is Nexus?

Nexus is the connection between your business and a tax jurisdiction that creates a legal obligation to register, collect, and remit VAT. In Colombia, nexus is based on your business type and the nature of your supplies.

Physical Nexus: Resident Businesses

Resident businesses, as well as non-resident businesses with a physical presence in Colombia (such as importing or exporting goods, or delivering goods within Colombia), are required to register for Standard VAT from the moment of their first taxable supply. There is no minimum threshold.

You have physical nexus in Colombia if you:

• Are a Colombian resident business making taxable supplies

• Import goods into Colombia

• Export goods from Colombia

• Have a permanent establishment or physical presence in Colombia

Economic Nexus: Non-Resident Remote Sellers

Non-resident remote sellers who provide digital or electronic services to non-VAT-registered Colombian customers are required to register under the Simplified Registration scheme. Registration is also required from the first taxable supply, with no minimum revenue threshold.

Registration Thresholds

The Tax Value Unit (UVT) for 2026 is COP 52,374. This value is updated annually by DIAN.

Does Inter-Company Revenue Count Toward the Threshold?

For resident businesses under both the Standard Regime and the RST, inter-company transactions between your own legal entities are counted toward the threshold if they constitute taxable supplies.

Do Credit Notes and Sales Returns Reduce the Threshold?

Yes. Credit notes and sales returns are deducted when calculating gross income for threshold purposes.

Do You Need to Register Immediately for Imports or Exports?

Yes. Resident businesses that import or export goods must register immediately for VAT. There is no grace period.

Note: Businesses involved in the import of automobiles or fuels are not eligible for the Simplified Tax Regime (RST).

Is a Local Fiscal Representative Required?

Non-resident remote sellers registering under the Simplified Registration scheme are not required to appoint a local fiscal representative in Colombia.

Can You Register Voluntarily?

Because the Standard VAT Regime and the Simplified Registration for non-resident sellers both have zero thresholds, voluntary registration does not apply. Registration is mandatory before your first taxable supply.

For the Simplified Tax Regime (RST), voluntary registration is available if your gross income is below 100,000 UVT.

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