Colombia Corporate Tax Guide 2026

Overview — Corporate Income Tax

Corporate income tax in Colombia is a federal tax (administered by the DIAN) applied at a flat rate of 35% on taxable profits of resident companies. Colombian tax residents are taxed on worldwide income, while non-resident companies are taxed only on Colombian-source income. The rate was 30% prior to 2021 and was increased to 35% as part of the 2021 tax reform (Ley 2155 de 2021), effective for 2022 onward. Unlike many countries, Colombia uses a single-rate system with no progressive brackets for corporations.

Companies are required to file annual returns by mid-April of the following year (exact date depends on taxpayer NIT number). Monthly or bi-monthly provisional returns (anticipos) are required based on the prior year's tax liability.

Corporate Tax Rate — 35%

The standard corporate rate is 35% on taxable income. This applies to all resident corporations, including SAS (Sociedad por Acciones Simplificada), SA (Sociedad Anónima), and other legal entities. There is no reduced rate for small companies under the ordinary regime. However, qualifying small businesses may opt into the Simplified Taxation Regime (RST — Régimen Simple de Tributación) which offers lower combined rates.

Financial Sector Surcharge — 9%

Financial institutions pay an additional surcharge of 9% on top of the standard 35% rate, resulting in a combined rate of 44% for the financial sector. This surcharge applies to:

• Banks and credit institutions
• Insurance companies
• Stockbrokers and securities dealers
• Other financial entities supervised by the Financial Superintendency
• The surcharge is calculated on the same taxable income base as the ordinary corporate tax

The surcharge was introduced to increase tax revenue from the financial sector and has been maintained in recent tax reforms.

R&D and Innovation Tax Discount

Colombia offers a generous tax incentive for investment in research, development, and innovation (I+D+i):

• 25% tax discount on qualifying R&D and innovation expenditures (reduces the tax bill directly, not just taxable income)
• Qualifying activities must be certified by the Ministry of Science, Technology and Innovation (Minciencias)
• The discount cannot exceed 25% of the company's total annual tax liability
• Unused credit may be carried forward for up to 10 years
• Qualifying expenditures include salaries of researchers, laboratory equipment, prototyping, patents, and software development

This incentive makes Colombia one of the most generous jurisdictions in Latin America for R&D tax relief.

ICA — Industry and Commerce Tax

The ICA (Impuesto de Industria y Comercio) is a municipal tax levied on gross revenue from industrial, commercial, and service activities. Key features:

• Rates range from 0.2% to 1.4% of gross revenue, depending on the activity and municipality
• Each municipality sets its own rate within nationally defined limits
• ICA is deductible against corporate income tax (as an expense)
• Paid bi-monthly or monthly depending on the municipality and taxpayer size
• Returns are filed through the respective municipal tax authority

ICA is a significant cost for businesses with high gross revenue and low margins, as it applies to gross revenue rather than profit.

Other Corporate Taxes

In addition to corporate income tax, Colombian corporations are subject to:

• IVA (VAT): 19% standard on sales, creditable on purchases (see VAT guide)
• CREE (Impuesto a la Renta para la Equidad): Eliminated in 2021 — no longer in effect
• Wealth tax (Impuesto al Patrimonio): Abolished as of 2020 (see Wealth Tax guide)
• Dividend withholding tax: 10% withholding on dividends distributed to shareholders (see Investment Income guide)
• Withholding tax on payments: Companies must withhold income tax on payments to third parties (salaries, fees, interest, cross-border payments)

FAQs

What is the RST (Régimen Simple de Tributación)?

The RST is a simplified tax regime for small businesses with annual revenue up to 100,000 UVT. It replaces income tax, IVA, and ICA with a single combined rate of 1.8% to 14.5% depending on revenue and activity. Not available to companies with foreign shareholders or those exceeding the revenue threshold.

Are dividends taxable to the company?

No, the company does not pay additional tax on dividends paid out of after-tax profits. However, the company must withhold 10% on dividends distributed to shareholders (see Investment Income guide).

How are foreign tax credits handled?

Colombian corporations may claim a foreign tax credit for income taxes paid abroad on foreign-source income. The credit is limited to the Colombian income tax attributable to that foreign income.

What are transfer pricing requirements?

Related-party transactions must be at arm's length. Companies with revenue exceeding 100,000 UVT or cross-border related-party transactions exceeding 10,000 UVT must file transfer pricing documentation (informe de precios de transferencia).

Disclaimer

This guide provides general information about Colombian corporate income tax for the 2026 tax year. Tax laws and rates may change. The information is based on published DIAN data and may not reflect individual circumstances. Always consult with a qualified Colombian tax advisor (contador) or the DIAN directly for advice specific to your company's situation. InvestmentKit does not provide tax advice.