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Post by livinginmedellin on Jul 17, 2016 17:00:04 GMT -5
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. Keep in mind those are the tax tables for 2015. The tax tables for Colombia will be adjusted somewhat for 2016 with a new Unidad de Valor Tributario (UVT) in Colombia. The UVT was 28,279 pesos in 2015 and is 29,753 pesos for 2016, which is an increase of about 5%. So the income numbers in the table will increase for 2016 by the change in the UVT. Also keep in mind 25% of a salary up to a limit is exempt from taxes in Colombia. This is a significant exemption that few of the English language articles about taxes in Colombia even mention like that justlanded.com post.
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Post by sedelen on Jul 17, 2016 18:23:43 GMT -5
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. Keep in mind those are the tax tables for 2015. The tax tables for Colombia will be adjusted somewhat for 2016 with a new Unidad de Valor Tributario (UVT) in Colombia. The UVT was 28,279 pesos in 2015 and is 29,753 pesos for 2016, which is an increase of about 5%. So the income numbers in the table will increase for 2016 by the change in the UVT. Also keep in mind 25% of a salary up to a limit is exempt from taxes in Colombia. This is a significant exemption that few of the English language articles about taxes in Colombia even mention like that justlanded.com post. The new tax tables are out for the States for 2016, all numbers changes, as do the laws. Got to keep it a moving target. I read somewhere the exchange rate used was as of the last day of the year, don't know if that's true, or was just used as an example. The lower the exchange rate the less we'll have to pay. Also read where filings were subject to audit for two years. Hope they speak English! Also read where worldwide income can include pretty much anything from the sale of stocks and bonds, mutual funds, interest from savings accounts, interest from the sale of saving bonds, etc. For me, it's just trying to define the requirements, keeping it as simple as I can, and being able to hold up to an audit. Whatever is reported to the IRS will be reported here if not otherwise exempt, what doesn't won't.
Found a few other web-sites that may or may not be of interest, or current.
www.expatfocus.com/expatriate-colombia-taxation
ryangoesabroad.com/hold-everything-the-colombian-tax-trap-no-one-is-talking-about/
And of course the reason Colombia needs all this money!
colombiareports.com/colombias-congressmen-make-40-times-the-countrys-minimum-wage/
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Post by livinginmedellin on Jul 17, 2016 19:31:03 GMT -5
Keep in mind those are the tax tables for 2015. The tax tables for Colombia will be adjusted somewhat for 2016 with a new Unidad de Valor Tributario (UVT) in Colombia. The UVT was 28,279 pesos in 2015 and is 29,753 pesos for 2016, which is an increase of about 5%. So the income numbers in the table will increase for 2016 by the change in the UVT. Also keep in mind 25% of a salary up to a limit is exempt from taxes in Colombia. This is a significant exemption that few of the English language articles about taxes in Colombia even mention like that justlanded.com post. The new tax tables are out for the States for 2016, all numbers changes, as do the laws. Got to keep it a moving target. I read somewhere the exchange rate used was as of the last day of the year, don't know if that's true, or was just used as an example. The lower the exchange rate the less we'll have to pay. Also read where filings were subject to audit for two years. Hope they speak English! Also read where worldwide income can include pretty much anything from the sale of stocks and bonds, mutual funds, interest from savings accounts, interest from the sale of saving bonds, etc. For me, it's just trying to define the requirements, keeping it as simple as I can, and being able to hold up to an audit. Whatever is reported to the IRS will be reported here if not otherwise exempt, what doesn't won't.
Found a few other web-sites that may or may not be of interest, or current.
www.expatfocus.com/expatriate-colombia-taxation
ryangoesabroad.com/hold-everything-the-colombian-tax-trap-no-one-is-talking-about/
And of course the reason Colombia needs all this money!
colombiareports.com/colombias-congressmen-make-40-times-the-countrys-minimum-wage/
The expatfocus.com post is another example of inaccurate information about Colombian taxes on website in English. The first sentence "Personal income tax (impuesto de renta) rates in Colombia range from 10% to 35% depending upon the level of income that you are on." That is wrong - Colombia doesn't have a 10% or 35% tax bracket. Only 0%, 19%, 28% and 33% tax brackets. Also that "The first 1090 pesos of income is considered to be tax free" is wrong. Also that five years before needing to pay taxes is wrong. Also doesn't say anything about 25% of your salary (up to a limit) being exempt. The ryangoesabroad.com site - "fill out bunches of forms" - but the income tax form in Colombia is a one-pager. Doesn't say anything about the ability to subtract taxes paid in another country from the taxes due in Colombia. Also doesn't say anything about 25% of your salary (up to a limit) being exempt from taxes in Colombia. Also doesn't say anything about all the deductions possible in Colombia. Bottom line is talk to a Colombia tax professional.
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Post by sedelen on Jul 17, 2016 19:47:26 GMT -5
The new tax tables are out for the States for 2016, all numbers changes, as do the laws. Got to keep it a moving target. I read somewhere the exchange rate used was as of the last day of the year, don't know if that's true, or was just used as an example. The lower the exchange rate the less we'll have to pay. Also read where filings were subject to audit for two years. Hope they speak English! Also read where worldwide income can include pretty much anything from the sale of stocks and bonds, mutual funds, interest from savings accounts, interest from the sale of saving bonds, etc. For me, it's just trying to define the requirements, keeping it as simple as I can, and being able to hold up to an audit. Whatever is reported to the IRS will be reported here if not otherwise exempt, what doesn't won't.
Found a few other web-sites that may or may not be of interest, or current.
www.expatfocus.com/expatriate-colombia-taxation
ryangoesabroad.com/hold-everything-the-colombian-tax-trap-no-one-is-talking-about/
And of course the reason Colombia needs all this money!
colombiareports.com/colombias-congressmen-make-40-times-the-countrys-minimum-wage/
The expatfocus.com post is another example of inaccurate information about Colombian taxes on website in English. The first sentence "Personal income tax (impuesto de renta) rates in Colombia range from 10% to 35% depending upon the level of income that you are on." That is wrong - Colombia doesn't have a 10% or 35% tax bracket. Only 0%, 19%, 28% and 33% tax brackets. Also that "The first 1090 pesos of income is considered to be tax free" is wrong. Also that five years before needing to pay taxes is wrong. Also doesn't say anything about 25% of your salary (up to a limit) being exempt. The ryangoesabroad.com site - "fill out bunches of forms" - but the income tax form in Colombia is a one-pager. Doesn't say anything about the ability to subtract taxes paid in another country from the taxes due in Colombia. Also doesn't say anything about 25% of your salary (up to a limit) being exempt from taxes in Colombia. Also doesn't say anything about all the deductions possible in Colombia. Bottom line is talk to a Colombia tax professional. Indeed, I saw all those inaccuracies myself, and a good pro is definitely the way to go! I think I've found everything I could on the Internet unless something new pops up.
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