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Post by livinginmedellin on Dec 23, 2016 20:18:31 GMT -5
Government set to collect an additional $2 billion next year on increased sales tax Colombian lawmakers approved a tax-overhaul bill Friday, a relief for President Juan Manuel Santos as his administration seeks to recoup lost oil revenues and maintain its investment-grade sovereign credit rating. The overhaul, which goes into effect on Jan. 1, allows the government to rake in an extra 6.2 trillion pesos, or $2 billion, in 2017 by raising the value-added sales tax to 19% from 16%. That, economists say, will be enough to appease ratings firms that earlier this year warned of a downgrade unless Colombia compensated for fallen oil prices. “These are not easy decisions and at first glance can seem unpopular,” Finance Minister Mauricio Cardenas said after the tax overhaul’s 46-16 approval in the senate. “But behind it all is the greatest interest of the nation: to progress collectively, to reduce poverty and build infrastructure.” The bill aims to simplify the tax code for businesses, which will see their burden reduced to 33% from 43% by 2019. It also applies new taxes on tobacco and fuel while toughening penalties against tax evaders, who can face four to nine years in prison. Shoring up finances is crucial for the government as it looks to end a half-century of conflict and implement a peace pact with Marxist rebels over the next six months. The accord calls for increased rural investment and development that will put additional strain on the federal budget, which saw revenue slashed by 3% of gross domestic product since 2014 due to lower oil prices. Standard & Poor’s in February, followed by Fitch Ratings in July, warned of downgrading Colombia’s BBB rating unless the government found a way to narrow a fiscal deficit estimated near 4% of economic output this year, the widest since 2009. While Mr. Santos’s supporters have majority control of the legislature, the tax increase was seen as a tough sell for the government, which had spent much of its political capital on getting the peace deal approved. Both the peace accord and the tax overhaul faced heavy opposition from Mr. Santos’s top rival, Álvaro Uribe, a former president turned senator whose conservative Democratic Center Party argues that the measures will drive investors away and ruin Colombia’s economy. “While the [tax] increase is positive for revenue-raising purposes, such an unpopular move is bound to bring political costs” ahead of 2018 presidential elections, said Nicholas Watson, an analyst with the consultancy Teneo Intelligence. See: www.wsj.com/articles/colombia-approves-tax-plan-to-replenish-coffers-hurt-by-oil-slump-1482526267Since the value-added sales tax will increase to 19% from 16% on January 1 - run to buy anything big you need before year-end.
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Post by Deleted on Dec 23, 2016 20:48:48 GMT -5
We knew this was coming.
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Post by scumbuster on Dec 24, 2016 5:44:45 GMT -5
It also applies new taxes on tobacco and fuel while toughening penalties against tax evaders, who can face four to nine years in prison.
Great news for some expats.. lol
While expats may not be the main focus of this they could look to cast a wide net looking for revenue.
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Post by livinginmedellin on Dec 24, 2016 6:19:38 GMT -5
Yes, toughening penalties against tax evaders may scare some expats into finally filing taxes in Colombia. I have met several expats that don't bother even though they live here full-time and clearly have a high enough income.
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Post by dandl93 on Dec 24, 2016 7:48:23 GMT -5
I can see it now, The Colombian tax man goes to a business or home and says you owe 20 million cop, the goverment wants their money now.
The tax evader goes ok I will give you Mister Tax man 2 million cop to make this and the paper work to go away...
Muchas Gracias Senor Tax Evader
Any one see it is funny that Rapists and Murders spend less time in jail then is proposed for Tax evaders? Stop the Political Corruption there would be alot more tax money.
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Post by elexpatriado on Dec 24, 2016 9:17:14 GMT -5
lookin more and more like venezuela to me
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Post by ozgringo on Dec 24, 2016 11:39:41 GMT -5
Good that the government got the tax measures through. If Colombia's credit rating was downgraded it's borrowing costs would of increased. Not good for the average Colombian. A 3% increase in the VAT will hurt an already struggling lower middle class. Colombia has a negative capital flow balance. Which indicates that investments leaving a country for overseas exceed investments coming into a country from overseas. i.e. People are taking their money out of Colombia. These tax changes and the peace agreement will hopefully see Colombia attract more foreign investors over the long run.
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Post by livinginmedellin on Dec 24, 2016 11:40:14 GMT -5
lookin more and more like venezuela to me No way that Colombia looks like socialist Venezuela. See where Colombia ranks from a doing business standpoint compared to Venezuela (or Brazil or Argentina) - www.doingbusiness.org/rankings. Colombia and the other Pacific Alliance countries (Mexico, Chile & Peru) are ranked as the best places to do business in Latin America. Other Latin American socialist leaning countries like Argentina, Bolivia, Belize, Cuba, Suriname and Ecuador look much more like Venezuela than Colombia does. Socialism in Latin America has essentially failed, see: panampost.com/rafael-ruiz-velasco/2016/05/19/21st-century-socialism-has-failed/ with Venezuela as the poster child.
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Post by elexpatriado on Dec 24, 2016 12:02:11 GMT -5
lookin more and more like venezuela to me No way that Colombia looks like socialist Venezuela. See where Colombia ranks from a doing business standpoint compared to Venezuela (or Brazil or Argentina) - www.doingbusiness.org/rankings. Colombia and the other Pacific Alliance countries (Mexico, Chile & Peru) are ranked as the best places to do business in Latin America. Other Latin American socialist leaning countries like Argentina, Bolivia, Belize, Cuba, Suriname and Ecuador look much more like Venezuela than Colombia does. Socialism in Latin America has essentially failed, see: panampost.com/rafael-ruiz-velasco/2016/05/19/21st-century-socialism-has-failed/ with Venezuela as the poster child. its just starting-i agrree with dandl
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Post by jabberwocky on Dec 24, 2016 12:55:44 GMT -5
No one likes tax increases but Colombia is taking the right step - better than sitting back and doing nothing and hoping oil prices go back up - they may but what happens if they drop down below $40 again - they need to prepare for that. They can't take a credit hit as a country - makes access to capital harder not just for the government but for business also.
Venezuela did just the opposite - short term they tried to make the people happy - and destroyed their country.
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Post by scott on Dec 25, 2016 13:00:23 GMT -5
Much talk on the FaceBook Medellin expat groups about Colombians and gringo expats (permanent residents) being taxed on their worldwide income and assets, but I have yet to read anything about that in the news articles.
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Post by Deleted on Dec 25, 2016 14:40:45 GMT -5
Much talk on the FaceBook Medellin expat groups about Colombians and gringo expats (permanent residents) being taxed on their worldwide income and assets, but I have yet to read anything about that in the news articles. That's because it's old news, been the law for several years. I would not take tax advice from a message board. You should find competent professional assistance, which is not easy to find.
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Post by saltador on Dec 26, 2016 19:40:43 GMT -5
Agree 100% with the advice of premonition. I know expats that have lived in Colombia for years that don't have a clue about the law, although they think they do.
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Post by billforce on Dec 26, 2016 20:25:54 GMT -5
lookin more and more like venezuela to me No way that Colombia looks like socialist Venezuela. See where Colombia ranks from a doing business standpoint compared to Venezuela (or Brazil or Argentina) - www.doingbusiness.org/rankings. Colombia and the other Pacific Alliance countries (Mexico, Chile & Peru) are ranked as the best places to do business in Latin America. Other Latin American socialist leaning countries like Argentina, Bolivia, Belize, Cuba, Suriname and Ecuador look much more like Venezuela than Colombia does. Socialism in Latin America has essentially failed, see: panampost.com/rafael-ruiz-velasco/2016/05/19/21st-century-socialism-has-failed/ with Venezuela as the poster child. I have a revelation for you, Socialism has failed not only in S.A. but everywhere on Earth that has tried it, not one single success to point to. Obama tried it and got nowhere, Chavez, Fidel, Russia etc. tried it but it seems people will buy into the rhetoric from time to time depending on the orator, Venezuela under Chavez was a classic example.
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Post by billforce on Dec 26, 2016 20:38:17 GMT -5
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Post by jabberwocky on Dec 26, 2016 20:56:07 GMT -5
Argentina is beginning to improve, banks are starting to open up cross boarder financing , if they can continue to reform possibly they can thrive, but they usually shoot themselvves in the foot politically and end up devaluing their money
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Post by livinginmedellin on Dec 27, 2016 7:15:14 GMT -5
Agree 100% with the advice of premonition. I know expats that have lived in Colombia for years that don't have a clue about the law, although they think they do. Yes, I also have met expats living in Colombia for years that don't have a clue about the law -- or that the law has changed. For example, major changes happened a few years ago for tax filing in Colombia for foreigners.
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Post by sedelen on Dec 27, 2016 17:14:10 GMT -5
Agree 100% with the advice of premonition. I know expats that have lived in Colombia for years that don't have a clue about the law, although they think they do. Yes, I also have met expats living in Colombia for years that don't have a clue about the law -- or that the law has changed. For example, major changes happened a few years ago for tax filing in Colombia for foreigners. I think that if the Colombian government wanted too, it could initiate a check to verify if those expats leaving the country, that meet the residency requirements to file Colombian taxes, could possibly get delayed until such time as they satisfy that requirement. That would be a hard day or reckoning for some folks. The way I understand it, even if you don't have to pay anything, you're still required to file. Catch 22. I think with the back taxes, the steep fines, and all it could get pretty painful for a lot of people.
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Post by livinginmedellin on Dec 29, 2016 9:27:31 GMT -5
Yes, I also have met expats living in Colombia for years that don't have a clue about the law -- or that the law has changed. For example, major changes happened a few years ago for tax filing in Colombia for foreigners. I think that if the Colombian government wanted too, it could initiate a check to verify if those expats leaving the country, that meet the residency requirements to file Colombian taxes, could possibly get delayed until such time as they satisfy that requirement. That would be a hard day or reckoning for some folks. The way I understand it, even if you don't have to pay anything, you're still required to file. Catch 22. I think with the back taxes, the steep fines, and all it could get pretty painful for a lot of people. I think that Migracion should give any expat who receives a Colombian visa a list of DIAN's Colombian tax filing requirements and the penalties for not filing. That should wake up many. Even if an expat doesn't have to pay taxes in Colombia they likely have to file taxes with the low income requirement in Colombia for filing. I heard one expat recently complain "when I got my visa nobody said anything about the requirement to file taxes in Colombia". Another expat said he didn't have to file because he hadn't been here for five years. When I told him that law changed a few years ago he said he hadn't heard that...
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Post by wildstubby on Dec 29, 2016 14:04:03 GMT -5
Ignorance is bliss!!!!!
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Post by dandl93 on Dec 29, 2016 14:18:42 GMT -5
The Colombia economy already sucks so the politicians big ideas is lets tax the hell out of everyone even more.
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Post by sedelen on Dec 29, 2016 14:32:23 GMT -5
Indeed! I know no one goes out of their way to inform anyone of the possible tax liabilities here, at least none of the gringos I've met ever mentioned it. No Colombian official ever mentioned it to me when I registered my Visa. I think the only thing that was mentioned was that I had to be in the country for six months, maybe that was to ensure I'd be a resident for Colombian taxes, depending of course when the Visa started and expired. I guess it's just not much of a going concern because there's far less ex-pats here than say Costa Rica or Panama. I think it will only be a matter of time before we see something on the Colombian news addressing how much revenue their losing her from foreign expats, and that will put the wheels in motion to address it. But it's only when you inquire about it, you get that deer in the headlights look, like why bother, and then you find yourself in the quagmire of the abyss of confusing laws that even the Colombian tax preparers can't even agree on trying to figure it out. As far as I go, I don't like owing anybody anything, and like to be on the right side of the law, I especially don't want to have any problems with Colombian authorities here.
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Post by dandl93 on Dec 29, 2016 15:01:04 GMT -5
sedelen this subject on expat and taxes in Colombia has come up many times on the forums.It always turns into the same old mess.Some know everything and think everyone is the same (All of Colombia is like MDE), others do the denier thing and say they are not included.Some years back me and Trevor replied that we was both fined for not filing and the fine was alot compared to we didnt owe anything but should of filed. As for going out of your way to help other Expats with info, on the majority it is a lost battle.
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Post by Deleted on Dec 29, 2016 16:51:37 GMT -5
The result of a Republic turning in to a democracy-- For those who do not know American history-- The U.S was founded as a Republic--president Johnson forever destroyed the U.S. Republic with his---
Voting rights act Civil rights act Great society welfare state
After 50 years the result--blantent tribalism--- secular society-- gender neutering of men -- while the Russians-chinese and men of the real world kicking our ass--
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