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Post by sedelen on Jul 15, 2016 10:58:29 GMT -5
The US government and IRS now have agreements in place to exchange information with Colombia's DIAN. So don't expect to stay under the radar for long, even if you don't have assets or income in Colombia. See: colombiareports.com/colombia-court-approves-tax-agreement-united-states/Both countries are pursuing tax evaders. IMHO if you live here and don't file taxes when you are required to you are taking a big risk. And for all those expats here I have met who don't file in either country, I guess the IRS and DIAN won't be exchanging much information, he, he.
But.......... the risk is theirs, and I guess for them, they hope to expect to die before ever being questioned.
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Post by sedelen on Jul 15, 2016 12:41:13 GMT -5
One solution for Colombia for all those deadbeat expats living in Colombia but not filing taxes when they are required to and some likely tax evaders - simply require a copy of a Colombian tax return for a visa renewal or certification from an accountant if not a taxpayer and not required to file. Unless you are filing tax returns or proving you don't have to - no visa renewals... They already do this as a requirement for becoming a citizen. It would be a solution of sorts, but it's also a double edged sword. Driving all those non-paying tax evaders out of the country would surely reduce the dollars they would've otherwise spent here. They lose altogether but it's an option they can take if they're willing to do so.
I don't think Colombia rolls out the red carpet for expats, like Costa Rica and Panama that offers a lot of perks should you decide to reside there. I think a lot of them here are tied in someway with a Colombian as a family member or something to that extent, wife, etc. at least most of whom I've met, or been in contact with. I honestly don't see that many Gringos in my travels here.
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Post by sedelen on Jul 15, 2016 13:49:36 GMT -5
I don't know if this shed's any new light on the subject, but I did find this article from "Medellin Living" which pretty much mirrors what "livinginmeddelin" has previously stated. But here it is. As far as the formulas in the article go, surely I can compute percentages and use exchange rates to get somewhat of an estimate, but nothing explains the numbers that follow. Just something you tack on the percentage you come up with and add to the total? Probably. medellinliving.com/filing-colombia-income-taxes/
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Post by colombiana on Jul 15, 2016 15:47:40 GMT -5
I don't know if this shed's any new light on the subject, but I did find this article from "Medellin Living" which pretty much mirrors what "livinginmeddelin" has previously stated. But here it is. As far as the formulas in the article go, surely I can compute percentages and use exchange rates to get somewhat of an estimate, but nothing explains the numbers that follow. Just something you tack on the percentage you come up with and add to the total? Probably. medellinliving.com/filing-colombia-income-taxes/Thanks for posting that. I'll use that to start planning for my next years taxes. Looks to me like the tax calculation numbers added on for the 28% and 33% brackets are to account for money taxed at the lower tax brackets.
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Post by sedelen on Jul 15, 2016 18:25:52 GMT -5
I don't think I'll have to file after all. Can you envision me jumping for joy! I found this other article, that states the tax year falls from January 1st through December 31st of the year. And for that year you will be a tax resident if you stay 183 or more days during that year. Since I arrived in mid July of last year, I fall short of the number of days to qualify as a tax resident. Dog gone it! Furthermore, it states a non resident is someone who spends less than 183 days in the country and is subjected to taxes on income earned in Colombia, which of course as a TP7 Visa holder I don't have. www.justlanded.com/english/Colombia/Colombia-Guide/Money/Taxes-in-Colombia
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Post by livinginmedellin on Jul 15, 2016 18:45:49 GMT -5
I don't think I'll have to file after all. Can you envision me jumping for joy! I found this other article, that states the tax year falls from January 1st through December 31st of the year. And for that year you will be a tax resident if you stay 183 or more days during that year. Since I arrived in mid July of last year, I fall short of the number of days to qualify as a tax resident. Dog gone it! Furthermore, it states a non resident is someone who spends less than 183 days in the country and is subjected to taxes on income earned in Colombia, which of course as a TP7 Visa holder I don't have. www.justlanded.com/english/Colombia/Colombia-Guide/Money/Taxes-in-ColombiaYes the income tax returns being filed starting in August in Colombia are for last year's tax year (2015). Colombia files personal income taxes much later than in the U.S. for the prior year. Beware that JustLanded post about Colombia taxes has some errors. For example, it starts out in the first sentence with "Personal income tax (impuesto de renta) rates in Colombia range from 10%-33% depending on your income." but there is no 10% tax bracket in Colombia - there are 0%, 19%, 28% and 33% tax brackets.
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Post by bickmed on Jul 15, 2016 19:31:01 GMT -5
It is 183 days in Colombia in ANY 365 day period, not just the tax year.
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Post by livinginmedellin on Jul 15, 2016 19:57:58 GMT -5
It is 183 days in Colombia in ANY 365 day period, not just the tax year. Yes in ANY 365 day period. See the following examples from KPMG: In caso c you would be considered a tax resident in the second year when the 183 days splits two years.
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Post by Deleted on Jul 15, 2016 20:58:32 GMT -5
I don't think I'll have to file after all. Can you envision me jumping for joy! I found this other article, that states the tax year falls from January 1st through December 31st of the year. And for that year you will be a tax resident if you stay 183 or more days during that year. Since I arrived in mid July of last year, I fall short of the number of days to qualify as a tax resident. Dog gone it! Furthermore, it states a non resident is someone who spends less than 183 days in the country and is subjected to taxes on income earned in Colombia, which of course as a TP7 Visa holder I don't have. www.justlanded.com/english/Colombia/Colombia-Guide/Money/Taxes-in-ColombiaNevertheless, I recommend you talk to a Colombian tax accountant before jumping for joy. You may still have to file, but it does not necessarily mean you have to pay taxes. According to the Colombian tax law, Pensions and social security are exempt for 2015 and for 2016... regardless of the source. However, this exempted income still needs to be entered in the "pensions" block on the declaration form. There's a lot of advice in this thread, but I would not base my decision whether to file, or not to file, upon threads in a forum. But, then again, if you've convinced yourself not to file... then this conversation is only academic. That's entirely your business.
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Post by livinginmedellin on Jul 15, 2016 22:17:53 GMT -5
I don't think I'll have to file after all. Can you envision me jumping for joy! I found this other article, that states the tax year falls from January 1st through December 31st of the year. And for that year you will be a tax resident if you stay 183 or more days during that year. Since I arrived in mid July of last year, I fall short of the number of days to qualify as a tax resident. Dog gone it! Furthermore, it states a non resident is someone who spends less than 183 days in the country and is subjected to taxes on income earned in Colombia, which of course as a TP7 Visa holder I don't have. www.justlanded.com/english/Colombia/Colombia-Guide/Money/Taxes-in-ColombiaNevertheless, I recommend you talk to a Colombian tax accountant before jumping for joy. You may still have to file, but it does not necessarily mean you have to pay taxes. According to the Colombian tax law, Pensions and social security are exempt for 2015 and for 2016... regardless of the source. However, this exempted income still needs to be entered in the "pensions" block on the declaration form. There's a lot of advice in this thread, but I would not base my decision whether to file, or not to file, upon threads in a forum. But, then again, if you've convinced yourself not to file... then this conversation is only academic. That's entirely your business. DIAN issued a ruling in 2014 that foreign pensions are fully taxable in Colombia. See (in Spanish): www.gerencie.com/tratamiento-de-la-pension-extranjera-de-residentes-en-colombia.htmlOnly pensions in Colombia are exempt from taxes (up to a limit).
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Post by Deleted on Jul 16, 2016 8:27:48 GMT -5
Nevertheless, I recommend you talk to a Colombian tax accountant before jumping for joy. You may still have to file, but it does not necessarily mean you have to pay taxes. According to the Colombian tax law, Pensions and social security are exempt for 2015 and for 2016... regardless of the source. However, this exempted income still needs to be entered in the "pensions" block on the declaration form. There's a lot of advice in this thread, but I would not base my decision whether to file, or not to file, upon threads in a forum. But, then again, if you've convinced yourself not to file... then this conversation is only academic. That's entirely your business. DIAN issued a ruling in 2014 that foreign pensions are fully taxable in Colombia. See (in Spanish): www.gerencie.com/tratamiento-de-la-pension-extranjera-de-residentes-en-colombia.htmlOnly pensions in Colombia are exempt from taxes (up to a limit). It's a DIAN decree that was issued in 2008, but the position that many accountants are taking (mine included) is that a decree does not trump the law. So, relying upon the professional advice of my accountant, that is what I am going to do. In 2014, I filed using another accountant, and he advised me to do the same thing. Let the chips fall where they may. If the law changes in 2017, and my pension and social security incomes are no longer exempt, then I may need to make other plans.
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Post by livinginmedellin on Jul 16, 2016 9:03:38 GMT -5
It's a DIAN decree that was issued in 2008, but the position that many accountants are taking (mine included) is that a decree does not trump the law. So, relying upon the professional advice of my accountant, that is what I am going to do. In 2014, I filed using another accountant, and he advised me to do the same thing. Let the chips fall where they may. If the law changes in 2017, and my pension and social security incomes are no longer exempt, then I may need to make other plans. The DIAN decree was actually in October 2014 - here's the decree: www.cijuf.org.co/normatividad/oficio/2014/oficio-58213.html. I asked two additional accountants yesterday and they both agreed with my accountant and said foreign pensions are fully taxable in Colombia. My accountant also told me she knows of two retired foreigners that already have left Colombia because of the tax on foreign pensions. So you have an aggressive accountant...
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Post by Deleted on Jul 16, 2016 9:11:27 GMT -5
It's a DIAN decree that was issued in 2008, but the position that many accountants are taking (mine included) is that a decree does not trump the law. So, relying upon the professional advice of my accountant, that is what I am going to do. In 2014, I filed using another accountant, and he advised me to do the same thing. Let the chips fall where they may. If the law changes in 2017, and my pension and social security incomes are no longer exempt, then I may need to make other plans. The DIAN decree was actually in October 2014 - here's the decree: www.cijuf.org.co/normatividad/oficio/2014/oficio-58213.html. I asked two additional accountants yesterday and they both agreed with my accountant and said foreign pensions are fully taxable in Colombia. My accountant also told me she knows of two retired foreigners that already have left Colombia because of the tax on foreign pensions. So you have an aggressive accountant... Yes, I have two excellent accountants here in Colombia, and I will heed their advise just like you heed the advise of yours. That decree, has been around in one form or another, since 2008. And it was re-issued in 2014. The intent of DIAN to target foreign pensions... not necessarily foreigners. Like I said, let the chips for where they may.
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Post by wendymor on Jul 16, 2016 9:46:10 GMT -5
Livinginmedellin, it's nice of you to look after everyone's pensions and retirement living. When are you retiring, 20 years from now.
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Post by sedelen on Jul 16, 2016 9:48:33 GMT -5
Yes the income tax returns being filed starting in August in Colombia are for last year's tax year (2015). Colombia files personal income taxes much later than in the U.S. for the prior year. Beware that JustLanded post about Colombia taxes has some errors. For example, it starts out in the first sentence with "Personal income tax (impuesto de renta) rates in Colombia range from 10%-33% depending on your income." but there is no 10% tax bracket in Colombia - there are 0%, 19%, 28% and 33% tax brackets.Indeed, it says Social Security is deductible. If it was I don't believe it is now.
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Post by Deleted on Jul 16, 2016 9:52:50 GMT -5
I believe the moral to the story, if you are "seriously" residing in Colombia, it is to your benefit to seek experienced, professional help to determine where you stand with Colombian taxes. As with virtually every administrative detail in this country, you will get different answers depending upon whom, where and when you ask the question. It is what it is in Colombia.. and it is not a country for the meek. By my posts on this board, I am only describing my experience in Colombia... what has worked for me... and what hasn't. Hopefully, it has some value to you. However, each of you should make up your own mind on how you want to address Colombian taxes (and every other aspect of life in this country.) Good luck.
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Post by sedelen on Jul 16, 2016 9:56:07 GMT -5
It is 183 days in Colombia in ANY 365 day period, not just the tax year. Indeed, but I won't have to report for 2015 since I fell short in the number of days, but next year I will.
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Post by sedelen on Jul 16, 2016 10:00:25 GMT -5
It is 183 days in Colombia in ANY 365 day period, not just the tax year. Yes in ANY 365 day period. See the following examples from KPMG: In caso c you would be considered a tax resident in the second year when the 183 days splits two years. I fall in the third example, where it says I will be a tax resident in the second year, or in my case, next year.
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Post by livinginmedellin on Jul 16, 2016 10:11:09 GMT -5
Livinginmedellin, it's nice of you to look after everyone's pensions and retirement living. When are you retiring, 20 years from now. I happen to have some retired foreigner friends in Colombia that have asked me about Colombian taxes - so I made an effort to learn as much as I can. I also want to start planning for when I eventually retire and understand all the possible tax deductions in Colombia. I now understand the tax system in Colombia well enough that I even caught something that my Colombian accountant missed that reduces my taxes in Colombia significantly. Since I am a US citizen, I file and pay income taxes in the U.S. even though I no longer live there. Plus I'm a tax resident in Colombia. To me it is important to understand both tax systems so I can effectively plan to minimize the total taxes I pay in both countries. If Colombia taxes foreign pensions that becomes part of the cost of living here when retired. But other costs of living in Colombia tend to be low, which can compensate.
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Post by sedelen on Jul 16, 2016 10:45:07 GMT -5
Looks like I opened up a can of worms with this thread. It's been a real eye opener, and so it is, there isn't anything easy about living in Colombia, dealing with all the paperwork and such. I have been fingerprinted more times since I've been here than my whole 62 years in the States. And I expected as much with the taxes as far as conflicting information, changing laws, interpretations and such. I do fully intend to get more knowledgeable, at least determine whether pensions and social security are taxable or not. Should there be conflicts in interpretation, directives, underlying laws, that are not evidently clear one way or the other, I will fully take advantage of these grey areas and leave it to the powers that be to sort it all out whenever it pleases them to so, to clarify what really is and isn't, after all that's their job, not mine.
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Post by papitohead on Jul 16, 2016 12:34:32 GMT -5
I keep repeating myself I have to think this over very thoroughly. All I pay outside Colombia is about $275 USD in property taxes because is only land I have. So I will be in the 33% bracket with an income of let's just put it at $25K usd/year. So it means I will have to pay over $8,000 USD per year. Or how is it they do figure taking in consideration of my numbers here.
Now this: Colombia, just like any other country in the world invites people to visit as tourists so they can benefit from the money we spend in Colombia. But wouldn't it be better for Colombia if us tourists spend the whole year in Colombia and spend all our money there instead of Panama, Costa Rica, etc. But they get greedy and now they want so much more. They may end up loosing it all for just trying to rip in us up.
I just can't see paying one third of my Social Security to Colombia.
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Post by wendymor on Jul 16, 2016 13:34:08 GMT -5
Livinginmedeliin said "I now understand the tax system in Colombia well enough that I even caught something that my Colombian accountant missed that reduces my taxes in Colombia significantly."
I hope you're not taking credit for what exchange rate to use when converting US$ to COP. Someone else questioned you about that and you had no answer.
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Post by dandl93 on Jul 16, 2016 13:36:08 GMT -5
I believe the moral to the story, if you are "seriously" residing in Colombia, it is to your benefit to seek experienced, professional help to determine where you stand with Colombian taxes. As with virtually every administrative detail in this country, you will get different answers depending upon whom, where and when you ask the question. It is what it is in Colombia.. and it is not a country for the meek. By my posts on this board, I am only describing my experience in Colombia... what has worked for me... and what hasn't. Hopefully, it has some value to you. However, each of you should make up your own mind on how you want to address Colombian taxes (and every other aspect of life in this country.) Good luck. This is the best comment on this thread... Colombia just like the USA when it comes to taxes if you think like H R Block or Turbo Tax you will pay out very dearly.Get a good Accountant and listen to no individuales......
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Post by livinginmedellin on Jul 16, 2016 13:57:45 GMT -5
I keep repeating myself I have to think this over very thoroughly. All I pay outside Colombia is about $275 USD in property taxes because is only land I have. So I will be in the 33% bracket with an income of let's just put it at $25K usd/year. So it means I will have to pay over $8,000 USD per year. Or how is it they do figure taking in consideration of my numbers here. Now this: Colombia, just like any other country in the world invites people to visit as tourists so they can benefit from the money we spend in Colombia. But wouldn't it be better for Colombia if us tourists spend the whole year in Colombia and spend all our money there instead of Panama, Costa Rica, etc. But they get greedy and now they want so much more. They may end up loosing it all for just trying to rip in us up. I just can't see paying one third of my Social Security to Colombia. That $8000 is incorrect. You are calculating incorrectly and not factoring in allowable deductions. If you are in the 33% tax bracket, not all of the income is taxed at 33% - some is taxed at 0%, some at 19%, some at 28% and some at 33%. Actually you would be in the 28% tax bracket. With absolutely no deductions the tax total would be $3,224 at the current exchange rate, assuming an exchange rate for the $25,000 in income that averaged 2,800 pesos per USD during last year (you can use the exchange rate on each social security payment to calculate income in pesos - you don't have to use the end of year number that was higher). But there are deductions in Colombia. You can exclude 25% of your income from taxes for a salary and I suspect also allowed for taxed foreign pensions as a pension would look like a salary since it's taxed as income. There are also other deductions like support of dependents and medical insurance. For a $25,000 income last year the tax I calculate would total 4,521,982 pesos ($1,547 USD at current exchange rate) if you assume 25% of the income is tax exempt. But there are other deductions. If you further assume a deduction of 5.25 million pesos for support of a dependent and a deduction of 1.5 million pesos for some Colombian medical insurance - total tax would come to only 2,829,125 pesos or $971 USD, which is less than 4% of the income. I suggest you talk to a tax professional to assess your situation.
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Post by sedelen on Jul 16, 2016 14:15:03 GMT -5
I keep repeating myself I have to think this over very thoroughly. All I pay outside Colombia is about $275 USD in property taxes because is only land I have. So I will be in the 33% bracket with an income of let's just put it at $25K usd/year. So it means I will have to pay over $8,000 USD per year. Or how is it they do figure taking in consideration of my numbers here. Now this: Colombia, just like any other country in the world invites people to visit as tourists so they can benefit from the money we spend in Colombia. But wouldn't it be better for Colombia if us tourists spend the whole year in Colombia and spend all our money there instead of Panama, Costa Rica, etc. But they get greedy and now they want so much more. They may end up loosing it all for just trying to rip in us up. I just can't see paying one third of my Social Security to Colombia. I don't know what is and what is not taxable when it comes to pensions and social security at this point. It depends on who you ask or which accountant you ask. That being the case, you might want to go with vago's accountant. I think it is perhaps taxable, but here in this article it says it isn't, social security that is. I cannot find a date for this.
www.justlanded.com/english/Colombia/Colombia-Guide/Money/Taxes-in-Colombia
I think I've read somewhere where you can deduct the taxes paid in another country, like the States for us.
I feel your pain, let's say you have a $90K pension, The IRS gets $18.5K of that, leaving you with $71.5K, and then Colombia takes 33%, which is another, $30K, leaving you with $41.5K. Of course, this would be worse case scenario, especially if you can't deduct the taxes paid to the US. If you can deduct it, you'd only have to pay, $11,500, which is a lot less than 30K.
Of course you may have deductions and stuff which affect the bottom line, which I don't have, any.
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Post by livinginmedellin on Jul 16, 2016 14:59:31 GMT -5
I keep repeating myself I have to think this over very thoroughly. All I pay outside Colombia is about $275 USD in property taxes because is only land I have. So I will be in the 33% bracket with an income of let's just put it at $25K usd/year. So it means I will have to pay over $8,000 USD per year. Or how is it they do figure taking in consideration of my numbers here. Now this: Colombia, just like any other country in the world invites people to visit as tourists so they can benefit from the money we spend in Colombia. But wouldn't it be better for Colombia if us tourists spend the whole year in Colombia and spend all our money there instead of Panama, Costa Rica, etc. But they get greedy and now they want so much more. They may end up loosing it all for just trying to rip in us up. I just can't see paying one third of my Social Security to Colombia. I don't know what is and what is not taxable when it comes to pensions and social security at this point. It depends on who you ask or which accountant you ask. That being the case, you might want to go with vago's accountant. I think it is perhaps taxable, but here in this article it says it isn't, social security that is. I cannot find a date for this.
www.justlanded.com/english/Colombia/Colombia-Guide/Money/Taxes-in-Colombia
I think I've read somewhere where you can deduct the taxes paid in another country, like the States for us.
I feel your pain, let's say you have a $90K pension, The IRS gets $18.5K of that, leaving you with $71.5K, and then Colombia takes 33%, which is another, $30K, leaving you with $41.5K. Of course, this would be worse case scenario, especially if you can't deduct the taxes paid to the US. If you can deduct it, you'd only have to pay, $11,500, which is a lot less than 30K.
Of course you may have deductions and stuff which affect the bottom line, which I don't have, any. That justlanded.com article has something inaccurate in the first sentence so I wouldn't trust it - Colombia doesn't have a 10% tax bracket. "The first COP$1,090 that you earn is considered tax free" in that article is also inaccurate - the 0% tax bracket in Colombia goes from 0 COP to 30.8 million COP for 2015. You definitely can subtract any income taxes paid in the US from your income taxes due on Colombia. This was found on line 88 of last year's Form 210 (Colombia's tax filing form) and is the reason I paid no income taxes in Colombia last year but I was required to file. Regarding tax-ability of foreign pensions in Colombia - DIAN (the IRS of Colombia) issued a decree in October 2014 that foreign pensions are taxable in Colombia - www.cijuf.org.co/normatividad/oficio/2014/oficio-58213.html. Some accountants are being aggressive and ignoring this DIAN ruling. As vago so well put it "each of you should make up your own mind on how you want to address Colombian taxes". For example, you can chose to not even bother with filing taxes in Colombia even though you meet the requirements. You can choose to use an aggressive accountant or not. And so on...
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Post by sedelen on Jul 16, 2016 17:42:58 GMT -5
That $8000 is incorrect. You are calculating incorrectly and not factoring in allowable deductions. If you are in the 33% tax bracket, not all of the income is taxed at 33% - some is taxed at 0%, some at 19%, some at 28% and some at 33%. Actually you would be in the 28% tax bracket. With absolutely no deductions the tax total would be $3,224 at the current exchange rate, assuming an exchange rate for the $25,000 in income that averaged 2,800 pesos per USD during last year (you can use the exchange rate on each social security payment to calculate income in pesos - you don't have to use the end of year number that was higher). But there are deductions in Colombia. You can exclude 25% of your income from taxes for a salary and I suspect also allowed for taxed foreign pensions as a pension would look like a salary since it's taxed as income. There are also other deductions like support of dependents and medical insurance. For a $25,000 income last year the tax I calculate would total 4,521,982 pesos ($1,547 USD at current exchange rate) if you assume 25% of the income is tax exempt. But there are other deductions. If you further assume a deduction of 5.25 million pesos for support of a dependent and a deduction of 1.5 million pesos for some Colombian medical insurance - total tax would come to only 2,829,125 pesos or $971 USD, which is less than 4% of the income. I suggest you talk to a tax professional to assess your situation.
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Post by sedelen on Jul 16, 2016 17:56:51 GMT -5
I'm trying to understand that formula in this link, and I don't. Anybody got any clues, using a number of your choosing as long as it falls in the 33% category from this link of a fully taxable amount with no deductions. I don't understand the 3rd number used in two of the formulas. Furthermore, some taxed at 0%, some at 19%, some at 28%, and some at 33%. Sounds like "Voodoo" mathematics to me. The intention here is to achieve understanding, not to box anyone in a corner. medellinliving.com/filing-colombia-income-taxes/
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Post by livinginmedellin on Jul 16, 2016 20:19:39 GMT -5
I'm trying to understand that formula in this link, and I don't. Anybody got any clues, using a number of your choosing as long as it falls in the 33% category from this link of a fully taxable amount with no deductions. I don't understand the 3rd number used in two of the formulas. Furthermore, some taxed at 0%, some at 19%, some at 28%, and some at 33%. Sounds like "Voodoo" mathematics to me. The intention here is to achieve understanding, not to box anyone in a corner. medellinliving.com/filing-colombia-income-taxes/It looks easy to me. For example, say your taxable income was 150,000,000 pesos. Your estimated tax = (150,000,000 - 115,943,900) X 33% + 22,281,024 = 33,519,537 pesos in estimated tax. The 115,943,900 in the formula is clearly the taxable income already taxed in the 0%, 19% and 28% tax brackets so you subtract that from 150,000,000, to get what is taxed (multiplied by) 33%. The 22,281,024 addition is the tax for the 115,943,900 pesos in income taxed at the 0%, 19% and 28% tax brackets.
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Post by sedelen on Jul 16, 2016 21:52:01 GMT -5
I'm trying to understand that formula in this link, and I don't. Anybody got any clues, using a number of your choosing as long as it falls in the 33% category from this link of a fully taxable amount with no deductions. I don't understand the 3rd number used in two of the formulas. Furthermore, some taxed at 0%, some at 19%, some at 28%, and some at 33%. Sounds like "Voodoo" mathematics to me. The intention here is to achieve understanding, not to box anyone in a corner. medellinliving.com/filing-colombia-income-taxes/It looks easy to me. For example, say your taxable income was 150,000,000 pesos. Your estimated tax = (150,000,000 - 115,943,900) X 33% + 22,281,024 = 33,519,537 pesos in estimated tax. The 115,943,900 in the formula is clearly the taxable income already taxed in the 0%, 19% and 28% tax brackets so you subtract that from 150,000,000, to get what is taxed (multiplied by) 33%. The 22,281,024 addition is the tax for the 115,943,900 pesos in income taxed at the 0%, 19% and 28% tax brackets. Thanks for clearing that up for me, so basically in dollars terms, 150,000,000 pesos, or about $50K dollars, is taxed at 33,519,537 pesos, or about $11.2K using the current exchange rate. And if you were to be able to subtract taxes paid in the US, you might be able to reduce it further by 1/3 to 1/2.
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