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Colombia Tax Rates vs US for Expats: What Americans Owe
Americans living in Colombia face two tax systems that both want a piece of their income. The United States taxes its citizens on worldwide income regardless of where they live. Colombia taxes people it considers tax residents on worldwide income, and non-residents on Colombia-source income only. The rates on the Colombian side move, sometimes within a single calendar year when a reform lands -- and as of 2026 several are being actively litigated, which we flag explicitly below. What does not change is the mechanism that connects the two systems: the US Foreign Tax Credit. That mechanism is where an Enrolled Agent speaks with authority, because it lives on the US return, not the Colombian one.
Colombian Tax Residency: Which Set of Rates Applies
Before you can compare rates, you need to know which rate table applies to you. Colombia distinguishes tax residents from non-residents. The residency test is based primarily on physical presence, though other factors can be considered.
Under Article 10 of the Colombian Estatuto Tributario, you are a tax resident if you remain in Colombia -- continuously or discontinuously, counting the days you arrive and depart -- for more than 183 calendar days during any rolling period of 365 consecutive days. The 365-day window is the trap most Americans miss: it does not reset on January 1, so a stay split across two calendar years can still tip you into residency. If you meet the test, you are a resident for Colombian tax purposes and Colombia taxes your worldwide income. If you do not, you are a non-resident and Colombia taxes only your Colombia-source income. For a full breakdown of when DIAN can reach your worldwide income, see our post on Colombian tax residency.
Colombian Resident Income Tax Brackets
Colombia taxes resident individuals on a progressive scale. The brackets are denominated in UVT (Unidad de Valor Tributario), a tax unit that DIAN adjusts annually for inflation. You multiply the UVT value by the bracket thresholds to get the COP figures.
For tax year 2026, DIAN set the UVT at COP $52,374 (Resolution 000238 of December 15, 2025, a 5.17% inflation adjustment over 2025).
The resident rate table in Article 241 of the Estatuto Tributario, as amended by Law 2277 of 2022, is denominated in UVT, so the thresholds themselves carry over year to year while the peso value moves with the UVT:
0 to 1,090 UVT -- 0%
1,090 to 1,700 UVT -- 19%
1,700 to 4,100 UVT -- 28%
4,100 to 8,670 UVT -- 33%
8,670 to 18,970 UVT -- 35%
18,970 to 31,000 UVT -- 37%
Above 31,000 UVT -- 39%
At the 2026 UVT, the 0% band runs to roughly COP $57 million of annual taxable income, and the top 39% bracket begins above roughly COP $1.62 billion.
The key point for Americans: whatever your Colombian resident tax computes to on a given income item, that tax is generally creditable on your US return. The bracket itself does not need to be exact for us to explain the interaction, which is the part that matters to the IRS.
Colombian Non-Resident Flat Rate
Non-residents are taxed on Colombia-source income at a flat rate rather than on a progressive scale. This applies to Americans who live in Colombia but have not crossed the residency threshold, or to Americans who live in the US but earn Colombian-source income (rental income from a Medellin apartment, for example).
Article 247 of the Estatuto Tributario sets a single flat rate of 35% on Colombian-source taxable income of non-resident individuals. The same 35% applies to estates of decedents who were not Colombian residents. A narrow exception exists for foreign professors contracted for 182 days or less by legally constituted higher-education institutions, who are taxed at 7%.
Capital Gains
Colombia taxes capital gains separately from ordinary income in some circumstances. For a US expat selling Colombian real estate or other assets, the Colombian treatment and the US treatment may differ, and timing differences can create mismatches.
Colombia taxes ganancias ocasionales -- occasional gains, which include the sale of an asset held two years or more -- at a flat 15%, raised from 10% by Law 2277 of 2022. This is a separate flat rate, not part of the progressive table above. Certain limited exclusions exist, including relief tied to the sale of a home, and the conditions and caps on those exclusions are Colombian-side determinations your contador should confirm against current law for your specific sale.
On the US side, capital gains are taxed at the familiar US long-term and short-term rates regardless of where the asset is located. The Foreign Tax Credit can offset US tax on the same gain if Colombian tax was paid on it, subject to the standard FTC limitations.
Dividends
Dividends from Colombian companies to non-resident individuals are subject to Colombian withholding tax. The rate and any surcharge depend on whether the underlying profits were taxed at the corporate level.
This is one of the figures currently in dispute, so we will not print a single number as settled law. The baseline rate on dividends paid to non-resident individuals was set by Law 2277 of 2022, and the 2026 emergency tax measures described below sought to raise it. Because those measures are under constitutional challenge, the rate that ultimately applies to a 2026 distribution may not be known until the Constitutional Court rules. If you are timing a dividend out of a Colombian company, that uncertainty is the planning problem -- and it is worth a conversation before you declare, not after.
For a US citizen, those dividends are also US taxable income. The withholding tax paid to Colombia is generally creditable against US tax through the Foreign Tax Credit, subject to the separate category limitation for passive income.
Wealth Tax
Colombia has imposed wealth taxes (impuesto al patrimonio) in various forms over the years. These have historically been temporary measures that get extended or modified by reform legislation.
The wealth tax is the single most unsettled Colombian figure for 2026. A permanent impuesto al patrimonio has existed since Law 2277 of 2022, and the December 2025 emergency decree moved to lower the entry threshold sharply and steepen the top rates. That decree is under constitutional review, and Colombian practitioners widely expect it to be struck down -- potentially with retroactive effect. We are not going to hand you a threshold or a rate that a court may erase. If you hold significant Colombian assets, this is the item to confirm with your contador before you file, and to revisit once the Court rules. If a wealth tax applies, it is a separate Colombian filing obligation from the income tax return (Formulario 210). Whether a wealth tax liability is creditable on the US return is a determination that depends on the specific characterization of the tax under US FTC rules, and it is not automatic.
Colombian Tax Reform: Status
Here is where things actually stand, and it is unusual enough that most expat tax pages have not caught up.
The government's ley de financiamiento -- the tax reform bill filed in September 2025 seeking roughly COP $26 trillion in new revenue -- was defeated in the Senate on December 9, 2025 and archived without a full debate of its articles. Among other things it would have pushed the top marginal individual rate from 39% to 41%.
After that defeat, the government declared a State of Economic, Social and Ecological Emergency and issued tax measures by decree, including changes to the wealth tax, VAT on certain goods, and a surcharge on the financial sector. Those decrees are now before the Constitutional Court, which has struck down comparable emergency tax measures before. Until the Court rules, a meaningful slice of Colombian tax law for 2026 is provisional, and some of it may be unwound retroactively.
What that means practically: the progressive bracket structure, the non-resident rate, the capital gains rate, and the UVT are stable and safe to plan against. The wealth tax and certain withholding rates are not. We have marked which is which above rather than printing a clean-looking table that might be wrong.
Our licensed in-country partners track these changes. We do not state Colombian figures as fact because the law moves and we will not put a number in your hands that we have not confirmed through a licensed Colombian source.
How the US Foreign Tax Credit Connects the Two Systems
This is the part that lives on the US return, and it is the part where an Enrolled Agent speaks with authority. Here is how it works in plain terms.
When you are a Colombian tax resident and you pay Colombian income tax on income that is also taxable on your US Form 1040, you can claim a Foreign Tax Credit on Form 1116 to offset the US tax on that same income. The credit is generally limited to the US tax attributable to that foreign-source income. You cannot credit more than the US would have charged on that income.
The credit is calculated by income category. Passive income (dividends, interest, capital gains) goes in one category. General income (wages, self-employment, business income) goes in another. Each category has its own limitation, so excess credits in one category generally cannot offset US tax in another category without careful planning.
Because there is no US-Colombia income tax treaty, the FTC is the primary relief mechanism. There is no treaty to reduce withholding rates at the source or to override residency defaults. You pay the Colombian tax, then you claim the credit. For the full explanation of how this works and why the absence of a treaty matters, see our post on the Foreign Tax Credit and the no-treaty reality.
If you have earned income from work performed in Colombia, you may also be able to use the Foreign Earned Income Exclusion (FEIE) on Form 2555 to exclude a portion of that income from US taxation. The FEIE exclusion is inflation-adjusted; for 2026 it is $132,900 per qualifying person, or $265,800 for a married couple where both spouses qualify separately. The FEIE and the FTC can be used together, but not on the same dollars. For the interaction and the traps, see our FEIE post.
Filing Obligations on Both Sides
Colombian tax residents file Formulario 210 with DIAN. You register in the RUT (the Colombian tax registry) and receive a NIT (tax identification number). These are Colombian-side procedures that our in-country partners handle.
On the US side, you file Form 1040 with the IRS, due April 15 with an automatic two-month extension to June 15 if you are abroad on April 15, and further to October 15 via Form 4868. If you hold foreign accounts whose combined balance exceeds $10,000 at any point in the year, you also file FBAR (FinCEN Form 114) through the BSA E-Filing system, due April 15 with an automatic October 15 extension. Form 8938 (FATCA) is a separate filing that goes with your 1040 and has higher thresholds for taxpayers residing abroad. For taxpayers whose tax home is abroad, Form 8938 is required when specified foreign financial assets exceed $200,000 on the last day of the year or $300,000 at any point during it; for married couples filing jointly abroad, those thresholds are $400,000 and $600,000. For the distinction between FBAR and 8938, see our FBAR vs FATCA comparison.
The Bottom Line
The Colombian rate tables tell you what DIAN charges. The Foreign Tax Credit tells you how much of that you can get back on the US side. The exact Colombian rates matter for planning and for cash flow, and our licensed in-country partners confirm those figures. The FTC mechanism is ours, and as an Enrolled Agent firm that is where we bring authority. For an overview of our international practice, see our international tax services page.
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This article is for education only. Every tax situation is different and results are never guaranteed. ASTR is a US tax firm led by Sabih Shafi, Enrolled Agent. Colombian figures here were verified against DIAN Resolution 000238 of 2025 and the Estatuto Tributario as amended by Law 2277 of 2022; items still under constitutional review are identified as such rather than stated as settled law, and all Colombian-side filing decisions should be confirmed with a licensed in-country professional.
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