Guide to Colombia VAT Taxability and Rates

Guide to Colombia VAT Taxability and Rates

This article explains how VAT applies to different types of transactions in Colombia, including domestic sales, cross-border imports and exports, and digital services. Use this guide to understand how Kintsugi handles your Colombia VAT taxability.

Standard VAT Rate

Colombia's standard VAT rate is 19%. This rate applies to most goods and services unless a specific exemption or zero-rating applies.

Tax Treatment by Transaction Type

The table below summarizes how VAT applies depending on who the buyer and seller are, and where the transaction takes place.

*The destination country's VAT rules may still apply.

Reverse Charge Explained

Reverse charge is a VAT mechanism where the VAT-registered buyer, rather than the seller, is responsible for accounting for and paying the tax. Under a standard VAT arrangement, the supplier charges and collects the tax. Under reverse charge:

• The supplier does not charge VAT.

• The buyer self-assesses the VAT on the purchase and reports it in their own VAT return.

In Colombia, reverse charge applies when a Colombian VAT-registered buyer purchases services or goods from a non-resident, unregistered foreign supplier.

Non-Resident Sellers: When Do You Charge VAT?

If you are a non-resident remote seller:

• Selling to B2C customers (non-VAT-registered Colombian residents): You are required to charge and collect 19% VAT.

• Selling to B2B customers (VAT-registered Colombian businesses): The buyer self-assesses via reverse charge, and you do not charge VAT.

• Selling to customers registered under the Simplified Regime (RST): You are required to collect VAT, even for B2B sales.

Product Classification Codes

Colombia uses UNSPSC codes (United Nations Standard Products and Services Code) as the product and service classification standard within its e-invoicing system. Resident businesses under both the Standard VAT Regime and the Simplified Regime (RST) are required to use these codes. Non-resident sellers are not required to use UNSPSC codes.

Tax Holidays

Colombia does not currently have VAT tax holidays.

Digital Services Tax (DST)

Colombia does not impose a separate Digital Services Tax (DST). Digital and electronic services are subject to standard VAT rules.

Taxability for Non-Profit Organizations

Supplies made to non-profit or charitable organizations are subject to VAT if the supply itself is taxable and not otherwise exempt under Colombian law.

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