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.
Aggregate Value Tax (IVA) Rebate
According to the Colombian Tax Law, regarding the value added tax (VAT), services rendered in the country and used exclusively outside the country by companies or persons without business or activities in Colombia are deemed to be exempt goods and services with the right to a bimonthly refund.
The law states that “there is understood to be an export of services in cases of services related to the production of film works, television programs, audiovisual products of any kind, and to software development, which are protected by copyright, are broadcast from outside Colombia after export by the recipient thereof in the international market, and can be accessed from Colombia by any technological means.” (Article 189 of Law 1819 of 2016).
In order to apply the above, it is necessary to comply with the regulations in force on the matter.
* This information should not be used to make decisions regarding film projects and/or issues in Colombia. For such purposes, Proimágenes recommends that the user seek the advice of film industry professionals and attorneys licensed in Colombia who are experts on these matters.
National Consumer Tax
This tax was recently created by Act 1607 of 2012 and is charged for services or sales to the end consumer or for the following items imported by the end consumer:
- Mobile phone services.
- The sale of certain tangible personal property domestically produced goods or imported goods.
- Services related to the sale of food and beverages prepared in restaurants, cafes, supermarkets, ice cream and fruit shops, pastry shops and bakeries, including contracted food services and the sale of food and alcoholic beverages for consumption in bars, taverns and nightclubs.
These goods and services are not subject to VAT.
In Colombia, as a rule, individuals and corporations are subject to income tax rates ranging between 0% and 33% for individuals and 25% for domestic corporations or foreign corporations with a permanent branch or establishment in Colombia, paid upon delivery of an annual income tax statement.
Foreign individuals and corporations with no permanent residence, domicile, branch or establishment in Colombia pay income tax only on income earned in Colombia originating in the sale of goods located in Colombia, the exploitation of tangible or intangible goods in Colombia, and the provision of services within the country. Your rate will be 33% of Colombian source income.
Legislation provides a mechanism called withholding tax, which consists of collecting income tax in advance. Foreign individuals or corporations with no residence, domicile, branch or permanent establishment in Colombia are not required to charge withholding tax when making payments to third parties. This means foreign non-resident filmmakers making third-party payments in Colombia are not required to charge withholding tax. However, if these payments are made through Colombian individuals or organizations, they would be obliged to apply the withholding tax to both Colombians and foreigners.
Revenue earned by artists, technicians and production personnel that do not reside in the country, when there is no contract and no payments generated by their participation in foreign film shall be considered as foreign income, as long as the National Film Office Resolution Allowing for Filming on National Territory has been issued. In such case, income tax in Colombia does not apply.