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Digital services in Colombia: significant economic presence income tax and VAT on services from abroad

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Last verified: 2026-10-26 · Status: Changing

Foreign sellers of goods and digital services with deliberate interaction with Colombian users and gross Colombian income of 31,300 UVT (about COP 1,639 million) or more are taxed in Colombia: either 10 percent withheld by card issuers and payment gateways, or an elective 3 percent of gross income. Separately, 19 percent VAT applies to digital services used in Colombia, paid by the foreign provider for consumer sales and by reverse charge for business customers. Treaties prevail, and a bill in committee would raise the 3 percent to 5 percent.

USD figures use the TRM of COP 3,158.43 per US dollar, valid 24 to 26 October 2026, from the official TRM series certified by the Superintendencia Financiera and published on datos.gov.co. UVT amounts use the 2026 UVT of COP 52,374 (DIAN Resolución 000238 de 2025). Conversions are for orientation only.

Key facts

Significant economic presence gross income threshold31300 UVTEstatuto Tributario art. 20-3 num. 1.2, as of 2026-10-26 · in force
Number of Colombian customers or users from which deliberate and systematic interaction is presumed300000 usersEstatuto Tributario art. 20-3 par. 1, as of 2026-10-26 · in force
Elective income tax on gross Colombian income for non residents with significant economic presence3 %Estatuto Tributario art. 20-3 par. 2, as of 2026-10-26 · in force
Withholding on payments to non residents with significant economic presence (if not electing the 3 percent regime)10 %Estatuto Tributario art. 408 inc. 8, as of 2026-10-26 · in force
VAT on digital services supplied from abroad to users in Colombia19 %Estatuto Tributario art. 420 par. 3 and art. 468, as of 2026-10-26 · in force
Date from which significant economic presence rules apply2024-01-01 dateEstatuto Tributario art. 20-3 par. 8, as of 2026-10-26 · in force
Elective significant economic presence rate proposed in bill 004 de 2026 Cámara5 %Proyecto de Ley 004 de 2026 Cámara art. 29, as of 2026-10-26 · pending
UVT for 202652374 COPDIAN Resolución 000238 de 2025, as of 2026-10-26 · in force
TRM used for USD conversions (valid 24 to 26 October 2026)3158.43 COP per USDOfficial TRM series, Superintendencia Financiera de Colombia, as of 2026-10-24 · in force

The rule

1. Non residents with a significant economic presence in Colombia are subject to income tax on income from selling goods or providing services to customers or users in Colombia. Presence exists where there is deliberate and systematic interaction with the Colombian market and gross income from transactions with Colombian customers of 31,300 UVT or more in the prior or current year, measured across related parties. Interaction is presumed where the seller markets to 300,000 or more customers or users in Colombia, or shows prices or accepts payment in Colombian pesos. The rules apply from 1 January 2024.
Example: 2026 threshold: 31,300 UVT = COP 1,639,306,200 of gross income from Colombian customers. / About US$519,026.Estatuto Tributario (Decreto 624 de 1989), added by Ley 2277 de 2022 art. 57, Art. 20-3, num. 1, par. 1, 3 and 8, 2022-12-13 official text · verified 2026-10-26
2. Digital services from abroad covered include online advertising; digital content, online or downloadable (apps, e books, music, films); streaming of television, films, music and podcasts; monetisation of data of users in Colombia; online intermediation platforms; digital subscriptions to audiovisual media, news, music, video and games; management, storage and cloud services for electronic data; online search engines and software licensing; supply of rights to use intangibles; and any other electronic or digital service for users in Colombia.Estatuto Tributario, added by Ley 2277 de 2022 art. 57, Art. 20-3, num. 2.1 to 2.11, 2022-12-13 official text · verified 2026-10-26
3. Payments to such non residents not covered by another withholding rate bear 10 percent withholding on the total payment. The withholding agents are card issuers, prepaid card sellers, cash collectors, payment gateways, the general withholding agents of art. 368 and others DIAN designates.
Example: Subscriptions of COP 1,000,000,000 paid by Colombian users: COP 100,000,000 withheld. / About US$316,613 of sales: about US$31,661 withheld.Estatuto Tributario, as amended by Ley 2277 de 2022 art. 61, Art. 408, eighth paragraph and par. 2, 2022-12-13 official text · verified 2026-10-26
4. Instead, the non resident may elect to file and pay, on the income tax return form, 3 percent of total gross income from goods and digital services sold to users in Colombia, and then ask for the 10 percent withholding not to be applied. Non residents with significant economic presence are not subject to the formal duties of resident taxpayers.
Example: Gross Colombian income of COP 5,000,000,000: tax of COP 150,000,000 under the 3 percent election, against COP 500,000,000 of withholding at 10 percent. / About US$1,583,065 of sales: about US$47,492 at 3 percent, US$158,307 at 10 percent.Estatuto Tributario, added by Ley 2277 de 2022 art. 57, Art. 20-3, par. 2 and 7, 2022-12-13 official text · verified 2026-10-26
5. The significant economic presence rules apply without prejudice to double taxation conventions, and stop applying for fiscal years after an international agreement signed by Colombia that prohibits this tax enters into force.Estatuto Tributario, added by Ley 2277 de 2022 art. 57, Art. 20-3, par. 4 and 5, 2022-12-13 official text · verified 2026-10-26
6. For VAT, services and intangibles supplied from abroad are taxed in Colombia when the user has its residence, domicile, permanent establishment or seat of business in Colombia. A foreign provider of digital services to Colombian consumers is VAT responsible: it declares and pays under the DIAN procedure, in a return that may be liquidated in US dollars and converted at the TRM of the filing day, and need not issue Colombian invoices for electronic or digital services unless DIAN requires electronic invoicing.
Example: Streaming subscriptions of COP 100,000 a year before VAT to a Colombian consumer: COP 19,000 of VAT. / About US$32 before VAT: about US$6 of VAT.Estatuto Tributario, art. 420 par. 3 as amended by Ley 1819 de 2016 art. 173; art. 437 par. 2 as amended by Ley 2010 de 2019 art. 4, Art. 420 par. 3; art. 437 par. 2, 2019-12-27 official text · verified 2026-10-26
7. As an alternative, a provider that only supplies listed digital services (audiovisual content, platform services, online advertising, distance learning, rights to use intangibles and other digital services to users in Colombia), has not opted for bimonthly VAT returns and charges users the VAT base, may opt in to a withholding system in which card issuers, prepaid card sellers and cash collectors withhold 100 percent of the VAT on payment; DIAN publishes the list of providers covered.Estatuto Tributario, art. 437-2 num. 8 and par. 3 as amended by Ley 2010 de 2019 art. 6; art. 437-1 par. 1, Art. 437-2 num. 8 lit. a to f and par. 3; art. 437-1 par. 1, 2019-12-27 official text · verified 2026-10-26
8. When a Colombian VAT responsible business buys taxed services from a non resident, the business itself withholds 100 percent of the VAT (reverse charge), so business to business digital services do not need the foreign provider's registration.Estatuto Tributario, art. 437-2 num. 3 as amended by Ley 1819 de 2016 art. 180; art. 437-1 par. 1, Art. 437-2 num. 3; art. 437-1 par. 1, 2019-12-27 official text · verified 2026-10-26
9. Pending: bill 004 de 2026 Cámara, filed 20 July 2026 and in committee when this page was checked, would raise the elective significant economic presence rate from 3 to 5 percent. It is not law.Proyecto de Ley 004 de 2026 Cámara, Art. 29 of the bill, 2026-07-20 official text · verified 2026-10-26
TaxMechanismCOPApprox. USD
VAT 19% on the price (charged to users)Declared by the provider, or withheld by card issuers if it opts in950,000,000US$300,782
Income tax, option A10% withholding by payment intermediaries500,000,000US$158,307
Income tax, option B3% election on gross income, filed on the income tax form150,000,000US$47,492
Income tax if bill 004 de 2026 is enacted, option B5% election250,000,000US$79,153

Foreign streaming platform with COP 5,000,000,000 (about US$1,583,065) of 2026 subscriptions from Colombian consumers, no Colombian permanent establishment, no treaty

Worked example

  • A foreign software as a service company selling to Colombian businesses only: its customers withhold 20 percent income tax under art. 408 (software and services) and self assess VAT by reverse charge, so it does not need to register for VAT; a treaty may reduce or remove the income tax.
  • A foreign marketplace with 400,000 Colombian users and COP 2,000,000,000 (about US$633,226) of commissions exceeds both the user presumption and the 31,300 UVT threshold (COP 1,639,306,200), and can choose between 10 percent withholding and filing at 3 percent.

Step by step

  1. Count Colombian users and Colombian gross income, aggregated with related parties, against the 300,000 user and 31,300 UVT tests.
  2. Decide between 10 percent withholding by payment intermediaries and the 3 percent election, and if electing, ask that withholding not be applied.
  3. For consumer sales, register with DIAN as a VAT responsible non resident and file VAT returns, or opt in to the card issuer withholding system if the conditions are met.
  4. For business customers, provide the information they need to apply the reverse charge and the art. 408 withholding.
  5. Check whether a double taxation convention with the provider's country removes the income tax (art. 20-3 par. 4).

Common traps

  • Showing prices in pesos or accepting peso payments is enough to presume interaction with the Colombian market (art. 20-3 par. 1).
  • The 31,300 UVT threshold is measured including related parties (art. 20-3 par. 3).
  • VAT and income tax are separate: electing the 3 percent income tax regime does not remove the 19 percent VAT.
  • The pending 2026 bill would raise the 3 percent election to 5 percent; it was in committee on 26 October 2026.

Sources

Related pages

Related: Colombia country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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