Quick answer
Colombian companies pay corporate income tax at 35% in 2026, with a 15% minimum effective tax. Dividends then carry 20% withholding for non-resident shareholders, or up to 39% through the personal scale for residents. Small businesses with gross income under 100,000 UVT (about COP 5.2 billion) can opt for the SIMPLE regime instead.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Check my business setup →You run, or plan to run, a business with a Colombian angle: a company for local clients, a team in Medellín, or a founder life split between countries. This guide covers the 2026 corporate tax rates, the tax on dividends, the SIMPLE alternative and which structure fits what you do.
Colombia corporate income tax in 2026: the key figures
| Item | Rule in 2026 |
|---|---|
| General corporate income tax rate | 35% (article 240 of the Tax Code) |
| Minimum tax | 15% effective rate on adjusted accounting profit |
| Surcharges | +5 points for financial institutions (through 2027); variable surcharges for oil and coal |
| Free trade zone users | 20% on income linked to exports, 35% on the rest |
| Dividends to non-resident shareholders | 20% withholding (lower under some treaties) |
| Dividends between Colombian companies | 10% withholding, creditable down the chain |
| SIMPLE regime | Gross income under 100,000 UVT; consolidated rates of about 1.2% to 14.5% |
| Loss carry-forward | 12 years |
Is this guide for you?
Read on if you…
- want to set up a Colombian SAS or branch and need the full tax picture;
- already own a Colombian company and want to check rates, dividends and deadlines;
- live in Colombia and run a foreign company, and wonder whether Colombia can tax it.
Probably not your case if you…
- invoice as an individual freelancer with no company. Personal rates apply, covered in the Colombia tax landscape overview;
- only need the company law side, such as shareholders and bylaws. See legal forms of business in Colombia.
Who pays corporate income tax in Colombia?
Colombian companies pay tax on their worldwide profit. A company is Colombian if it was incorporated in Colombia, has its main office there, or has its place of effective management there – basically where the key business decisions are actually made.
Foreign companies pay tax only on Colombian-source income. If they have a permanent establishment (PE) or branch in Colombia, the profit linked to it is taxed at 35%.
Management-and-control warning
Here's the catch for founders who move to Colombia. If you run a foreign company from your Bogotá flat, Colombia can treat it as having its effective management in Colombia. The company then becomes a Colombian taxpayer on worldwide profit. Even short of that, regular contract signing by you in Colombia can create a PE. Board meetings abroad do not fix this if the real decisions happen in Colombia.
How much tax does a Colombian company pay?
The general rate is 35% of taxable profit. Since 2023, a 15% minimum tax also applies. If the company's adjusted tax divided by its adjusted accounting profit falls below 15%, it pays a top-up. This mainly hits groups using exemptions and incentives.
Special rates still exist for some sectors. Free trade zone users pay 20% on income tied to exports, under an internationalisation plan. New hotels in certain municipalities and some rural regions (ZOMAC) have reduced rates for a limited period.
Deductions and limits
- Costs must be necessary, proportional and backed by electronic invoices.
- Interest on related-party debt is deductible only up to twice the company's equity.
- Payments to related parties abroad must follow transfer pricing rules.
- Half of the 4x1000 bank tax paid, and ICA, can reduce the bill. See specific taxes in Colombia.
How are dividends taxed?
Profit that already bore 35% can be paid out as dividends. A second layer of tax then applies.
| Shareholder | Dividend tax in 2026 |
|---|---|
| Non-resident individual or company | 20% withholding, or a lower treaty rate |
| Resident individual | Added to the personal scale (0% to 39%); 15% withholding above 1,090 UVT |
| Colombian company | 10% withholding, credited when it pays its own shareholders |
If dividends come from profit that was not taxed at company level, 35% applies first, then the dividend tax on the rest.
Which structure fits what you do?
| SAS | SA | Ltda | Branch of foreign company | Sole trader (persona natural) | |
|---|---|---|---|---|---|
| Liability | Limited to capital | Limited to capital | Limited, but partners share tax debts | Parent fully liable | Unlimited |
| Minimum capital | None | None, but 5+ shareholders | None, 2 to 25 partners | Assigned capital required | None |
| Setup time and cost | 1–3 weeks; registration tax about 0.7% of capital plus fees | 3–6 weeks; notary deed | 2–4 weeks; notary deed | 4–8 weeks; legalised parent documents | Days; RUT and chamber registration |
| Tax | 35% or SIMPLE | 35% | 35% | 35% plus 20% on remitted profit | 0%–39% or SIMPLE |
| Run remotely by a non-resident? | Yes, with a local address, accountant and bank | Yes, but board and statutory auditor needed | Yes, rarely used | Yes, with a local representative | Only if you are present |
For almost every location-independent founder, the SAS (Sociedad por Acciones Simplificada) is the default. One shareholder, no minimum capital and flexible bylaws. Heavnn's business setup service can check whether a Colombian entity is the right home for your activity.
The SIMPLE regime
SIMPLE is an optional regime for individuals and companies with gross income under 100,000 UVT. You pay a single rate on gross income that covers income tax and ICA. Rates depend on the activity and income band. Liberal professionals can only join below a lower income cap. It suits low-cost businesses. It rarely suits companies with high expenses, because tax is on revenue, not profit.
When do companies file and pay?
The tax year is the calendar year. Large taxpayers pay in three instalments, roughly February, April and June. Other companies file in May and pay in two instalments, May and July. Exact dates depend on the last digit of the tax ID (NIT). An advance payment towards next year's tax is also due with each return.
Example – Mateo, US-resident founder with a Bogotá SAS
Mateo's SAS runs a small dev team for US clients. In 2026 it makes COP 400 million of taxable profit. Corporate tax at 35% is COP 140 million. It pays the remaining COP 260 million to Mateo as a dividend. Colombia withholds 20%, COP 52 million, as there is no US treaty. Total Colombian tax: COP 192 million, or 48% of profit. Mateo can claim a US foreign tax credit for the withholding.
Mateo pays 48% across two layers. A different setup might change that. Yours too.
Heavnn reviews your structure and shows whether a Colombian company fits.
Check my business setup →Common mistakes (and what they cost)
- Managing a foreign company from Colombia → DIAN can treat it as Colombian and tax its worldwide profit at 35%, with back taxes and penalties.
- Paying dividends without withholding → the company is liable for the 20% plus penalties, and keeping withheld tax is a crime.
- Choosing SIMPLE with high costs → you pay tax on revenue even in a loss-making year.
- Ignoring transfer pricing on payments to your foreign company → adjustments, plus penalties of up to 50% of the difference for some errors.
- Over-borrowing from related parties → interest above twice equity is not deductible, raising taxable profit.
Frequently asked questions
What is the corporate tax rate in Colombia in 2026?
The general rate is 35% of taxable profit. Financial institutions pay 5 extra points through 2027. Free trade zone users pay 20% on export-related income. Every company must also reach a 15% minimum effective tax rate on adjusted accounting profit, or pay a top-up. Small businesses can choose the SIMPLE regime instead.
Can a foreigner own a Colombian SAS?
Yes. A foreign individual or company can own 100% of an SAS. You need a Colombian tax ID (NIT), a local address and a legal representative. Opening a bank account is often the slowest step. Register your foreign investment with the central bank to repatriate profits smoothly.
How are dividends to foreign shareholders taxed in Colombia?
Dividends paid to non-resident shareholders bear 20% withholding in 2026, unless a tax treaty sets a lower rate. Colombia has treaties with countries such as Spain, Mexico, Chile, Canada and Switzerland. If the profit was not taxed at company level, 35% applies first.
Is the SIMPLE regime worth it for a small company?
It can be, for businesses with low costs and income under 100,000 UVT. You pay one rate on gross revenue, which also covers ICA. Filing is lighter. If your margins are thin, the regular 35% on profit can be cheaper, because SIMPLE taxes revenue even when you make no profit.
Does working from Colombia make my foreign company taxable there?
It can. If key management decisions are made in Colombia, the company may be treated as Colombian and taxed on worldwide profit. If you regularly conclude contracts from Colombia, a permanent establishment can arise. Either way, part or all of the profit becomes taxable at 35%.
Related guides
- Legal forms of business in Colombia
- Colombia tax landscape overview
- Specific taxes in Colombia: VAT, ICA and 4x1000
- Capital gains tax in Colombia
- Tax fraud regulations of Colombia
- Corporate income taxes in Paraguay
- All country tax guides
Sources
- DIAN – Dirección de Impuestos y Aduanas Nacionales
- Secretaría del Senado – Estatuto Tributario (Tax Code)
- Superintendencia de Sociedades
- RUES – Registro Único Empresarial y Social
- Función Pública – Gestor Normativo (Law 2277 of 2022)
- OECD – Tax policy and administration
This guide is general information, not personalised tax advice. See how we research and review.
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