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Colombia VAT Guide 2026

Colombia's Impuesto al Valor Agregado (IVA) is a federal value-added tax with a standard rate of 19%, a reduced rate of 5% for selected goods, and a 0% rate for essential food items, agricultural inputs, and exports. The tax is administered by the DIAN and applies to the sale of goods, provision of services, and imports.

Overview — IVA (Impuesto al Valor Agregado)

The IVA is Colombia's federal value-added tax, applied at each stage of the production and distribution chain. Registered businesses collect IVA on sales (output VAT) and credit IVA paid on purchases (input VAT), remitting the net difference to the DIAN. The system operates on the destination principle — exports are zero-rated and imports are subject to IVA. Most businesses with annual revenue exceeding 100,000 UVT (~COP 4.7 billion) must register for IVA, though registration is also required for smaller businesses that wish to credit input VAT.

Standard Rate — 19%

The standard IVA rate of 19% applies to most goods and services. This includes consumer goods, electronics, vehicles, clothing, restaurant services, telecommunications, and professional services. The 19% rate has been in effect since 2017 (increased from 16%). Digital services provided by foreign platforms (streaming, apps, ride-sharing) to Colombian residents are also subject to 19% IVA, collected through withholding by the platform.

Reduced Rate — 5%

A reduced IVA rate of 5% applies to selected goods and services, including:

  • Agricultural inputs (fertilisers, pesticides, seeds)
  • Certain food products (coffee, maize, rice, wheat, cooking oil, sugar, eggs, meat, milk, bread)
  • Passenger transport services (land, river, maritime)
  • Healthcare products and medicines (some categories)
  • Newspapers and magazines
  • Cultural events (theatre, cinema, concerts)
  • Rental of residential property

Zero Rate (Tasa 0%)

The 0% rate applies to essential items, meaning no IVA is charged but the seller can still claim input VAT credits. Zero-rated items include:

  • Basic food staples (unprocessed fruits, vegetables, legumes, tubers, cereals, fresh meat, fish, milk)
  • Exports of goods and services
  • Agricultural and livestock machinery (certain categories)
  • Gold and precious metals (certain transactions by authorised entities)
  • Books and educational materials (some categories)

Exemptions

Certain goods and services are fully exempt from IVA, meaning no IVA is charged and the seller cannot claim input VAT credits. Exempt activities include:

  • Healthcare services (hospitals, medical consultations, dental services)
  • Education services (schools, universities, tutoring at all levels)
  • Financial services (interest, loans, insurance premiums, bonding)
  • Public transport of passengers (urban and intermunicipal)
  • Sales of used goods by individuals
  • Lotteries, raffles, and gambling services
  • Residential property leases

Exempt sellers cannot pass IVA to customers nor recover IVA on inputs, creating a potential cost disadvantage for businesses with significant input VAT.

Registration Threshold

Businesses whose annual revenue exceeds 100,000 UVT (~COP 4.7 billion in 2026) are required to register for IVA with the DIAN. Businesses below this threshold may register voluntarily if they wish to credit input VAT. Digital platform sellers and cross-border service providers have specific registration obligations regardless of revenue. Small businesses may qualify for the simplified tax regime (RST — Régimen Simple de Tributación) which includes simplified IVA treatment.

Invoicing and Filing

All IVA-registered businesses must issue electronic invoices (factura electrónica) for every transaction, with real-time transmission to the DIAN. IVA returns are filed bi-monthly (6 periods per year) for most businesses, due by the 11th–15th of the month following each bi-monthly period. Large taxpayers may file monthly. Payment is made electronically through the DIAN portal or authorised banks.

FAQs

Can foreign companies charge IVA to Colombian customers?

Yes, foreign providers of digital services (streaming, apps, e-books, online courses) to Colombian residents must register with the DIAN for IVA purposes. The 19% rate applies and is collected by the provider. Since 2020, large platforms (Netflix, Spotify, Uber, Airbnb) are required to collect and remit IVA.

Is IVA recoverable on business expenses?

Yes, registered businesses can credit input IVA paid on purchases directly related to their business activities, provided they have a valid electronic invoice (factura electrónica) from the supplier.

What happens if I don't issue an electronic invoice?

Failure to issue electronic invoices can result in fines ranging from COP 2,000,000 to COP 50,000,000 per violation, plus potential closure of the establishment and criminal liability for tax evasion.

Disclaimer

This guide provides general information about Colombian value-added tax (IVA) for the 2026 tax year. Tax laws, UVT values, 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 situation. InvestmentKit does not provide tax advice.