VAT and Sales Tax in Colombia

What is the standard IVA rate in Colombia?

Colombia's Impuesto al Valor Agregado (IVA) is governed by Title IX of the Estatuto Tributario. The standard rate is 19% and applies to the sale of most movable goods, services provided in Colombia, and imports. The tax is pluriphasic, meaning it is collected at each stage of the supply chain, with registered businesses crediting IVA paid on inputs (IVA descontable) against IVA charged on outputs. The DIAN -- Direccion de Impuestos y Aduanas Nacionales -- administers IVA, and all responsables de IVA must file electronically through the MUISCA portal using Form 300. [1][2]

What goods and services qualify for the 5% or 0% rate?

The Estatuto Tributario carves out two below-standard tiers. The 5% reduced rate covers goods such as specific agricultural inputs (corn seed, oil palm, sunflower oil), animal feed pellets, certain agricultural machinery (tariff heading 82.01), and electric or hybrid vehicles. The 0% rate (exento) applies to zero-rated exports, livestock, fresh meats, eggs, dairy products (fresh milk, cheese), rice, medicines and pharmaceutical products, books and academic magazines, and internet services for low-to-mid-income residential customers. [1][3]

A critical distinction separates exento from excluido goods. Exento (0%) goods are still inside the IVA system: the vendor charges 0% but retains the right to deduct IVA paid on inputs and may request a refund of favorable balances (saldos a favor). Excluido goods stand entirely outside IVA: the vendor neither charges IVA nor may deduct input IVA -- that cost becomes a permanent business expense. Excluded items include residential real estate transactions, medical and hospital services, education, residential property rentals, and public passenger transport. Misclassifying a supply as excluido when it is exento (or vice versa) affects whether input IVA is recoverable -- a material difference requiring verification with a qualified tax professional. [3]

What is the National Consumption Tax (INC) and how does it interact with IVA?

The Impuesto Nacional al Consumo (INC), established under Article 512-1 of the Estatuto Tributario, is a separate, monophasic tax collected only at the final point of sale. Unlike IVA, it does not generate a creditable input tax (no genera impuesto descontable). The INC applies at three rates in 2026:

INC and IVA do not stack on the same taxable event. A soft drink sold at a neighborhood shop carries IVA; that same drink served at a restaurant table carries INC instead -- not both. Franchise restaurant operators, however, fall outside the INC regime and charge IVA at 19% on food and beverage service. [4][5]

How do IVA filing periods work?

The filing period depends on the taxpayer's prior-year gross income measured in UVT (Unidad de Valor Tributario). For 2026 the UVT is COP 52,374, set by DIAN Resolution 000238 of 15 December 2025. Responsables with 2025 gross income of 92,000 UVT or more (COP 4,818,408,000) -- and all large taxpayers (grandes contribuyentes) regardless of income -- file bimestrally (six returns per year: Jan-Feb, Mar-Apr, May-Jun, Jul-Aug, Sep-Oct, Nov-Dec). All other responsables file cuatrimestrally (three returns per year: Jan-Apr, May-Aug, Sep-Dec). Taxpayers enrolled in the Regimen Simple de Tributacion (RST) file annually. Exact due dates per period vary by the last two digits of the taxpayer's NIT and are published each year in the DIAN tax calendar. [1][6]

How does IVA apply to imports and foreign digital services?

IVA on imported goods is triggered at the moment of nationalization (customs clearance). The taxable base is the customs value of the goods plus applicable customs duties (arancel), and the standard 19% rate applies to that combined figure. Imported goods that qualify as exento under domestic rules (medicines, books, etc.) retain that treatment on importation. A notable 2026 change: the de minimis exemption for small international parcels was cut from USD 200 to USD 50 under Decree 1474 of 2025, meaning more cross-border e-commerce purchases now attract IVA at customs. Registered importers may claim IVA paid at customs as a deductible credit (IVA descontable) on their periodic IVA return. [1][2]

Foreign providers of digital services -- streaming platforms, SaaS, app stores, online marketplaces -- must register with DIAN under the simplified IVA regime introduced by Law 1819/2016 and Decree 1415/2018. There is no revenue threshold: registration is mandatory from the first taxable sale to a Colombian consumer. Registered providers file bimonthly Form 300 via MUISCA. Alternatively, if a foreign provider does not register, Colombian financial intermediaries (banks, payment processors) withhold 19% IVA at source on outbound payments. From 2025, OECD Model Reporting Rules require resident digital platform operators to report seller data to DIAN annually (first period: Q4 2025, first due date: 27 February 2026). [7]

Who must register as responsable de IVA, and what is the RUT?

All legal entities and corporations that sell taxable goods or services are automatically responsables de IVA. For natural persons (individuals), the law in Article 437 Estatuto Tributario defines a narrow path to non-responsible status. A natural person may operate as no responsable de IVA only if ALL of the following conditions are met simultaneously in the prior calendar year: gross income below 3,500 UVT (COP 183,309,000 for 2026, based on the 2025 UVT of COP 49,799); gross assets below 4,500 UVT (COP 235,683,000); bank deposits from taxable activities below 3,500 UVT; a maximum of one business establishment; no franchise or licensed-brand operations; no status as a customs user; and no individual contracts exceeding 3,500 UVT during the year. For individuals whose income derives exclusively from state contracts, the threshold rises to 4,000 UVT (COP 209,496,000). Breaching any single condition triggers mandatory registration as responsable de IVA before signing the next contract. [6]

The RUT (Registro Unico Tributario) is the universal taxpayer identifier administered by DIAN. Every person or entity with any tax obligation in Colombia -- including non-responsables de IVA, INC responsables, and non-resident digital-service providers -- must hold a current, updated RUT. For businesses, the NIT (Numero de Identificacion Tributaria) is derived from the RUT. Failure to maintain an accurate RUT can result in retroactive reclassification, sanctions, and, for IVA-collected-but-not-remitted cases, potential criminal liability. [1]

What is the history of the dias sin IVA?

Colombia ran three annual VAT-free shopping days (dias sin IVA) in June, October, and November from 2020 through 2022 as a COVID-era stimulus measure under Law 2010/2019 and Law 2155/2021. During those days, selected consumer goods -- clothing, footwear, electronics, appliances, school supplies, sports equipment, toys, and agricultural inputs -- were sold at 0% IVA. Banco de la Republica research found household spending in covered categories rose sharply during the events, with total sales across the three 2021 cycles exceeding COP 31 trillion. Article 96 of Law 2277 of December 2022 repealed the statutory authority for the dias sin IVA, ending the program. A congressional effort in 2024 to reinstate three annual days was passed by the Senate on 28 May 2024 but was subsequently objected to by President Gustavo Petro, who argued the fiscal cost outweighed the benefits and that the initiative lacked constitutional compliance. As of the date of this review, no new dias sin IVA are scheduled for 2025 or 2026. [8]

For personalized guidance on IVA obligations, import classification, digital-service registration, or INC applicability, consult a qualified tax professional familiar with Colombian tax law. You can find vetted Colombian tax professionals through the Colombia country overview or browse by city or specialty.