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Local taxes in Colombia: municipal industry and commerce tax (ICA) and property tax

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

Every municipality where a business operates charges the industry and commerce tax (ICA) on gross income, at rates its council sets within 2 to 7 per thousand for industry and 2 to 10 per thousand for commerce and services, and ICA is fully deductible for income tax. Property owners pay the unified property tax at 5 to 16 per thousand of cadastral value, up to 33 per thousand on undeveloped urban land. Late local taxes accrue interest at the national rate, 26.59 percent a year in October 2026.

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

Municipal industry and commerce tax (ICA) rate band, industrial activities2 to 7 per thousandDecreto Ley 1333 de 1986 art. 196 (Ley 1819 de 2016 art. 342), as of 2026-10-26 · in force
Municipal industry and commerce tax (ICA) rate band, commercial and service activities2 to 10 per thousandDecreto Ley 1333 de 1986 art. 196 (Ley 1819 de 2016 art. 342), as of 2026-10-26 · in force
Share of ICA paid deductible for income tax100 %Estatuto Tributario art. 115, as of 2026-10-26 · in force
Unified property tax rate band5 to 16 per thousand of cadastral valueLey 44 de 1990 art. 4 (Ley 1450 de 2011 art. 23), as of 2026-10-26 · in force
Maximum property tax rate on undeveloped urban land33 per thousandLey 1450 de 2011 art. 23, as of 2026-10-26 · in force
Cap on yearly property tax increase when new rates take effect25 %Ley 1450 de 2011 art. 23, as of 2026-10-26 · in force
Late payment interest on taxes, October 2026 (usury rate 28.59 percent less 2 points)26.59 % a yearEstatuto Tributario art. 635; SFC Resolución 1472 de 2026, as of 2026-10-26 · in force
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. The municipal industry and commerce tax (ICA) is levied on all ordinary and extraordinary income of the year, including financial returns and commissions, excluding income from exempt, excluded or non taxed activities, returns, rebates and discounts, exports and sales of fixed assets. Each municipal council sets the rate within 2 to 7 per thousand for industrial activities and 2 to 10 per thousand for commercial and service activities. Advertising agencies, real estate brokers and insurance brokers pay only on their own fees and commissions, and special bases for fuel distributors and the special rules of Bogotá (Decreto Ley 1421 de 1993) continue.
Example: Service income of COP 3,000,000,000 where the council set 5 per thousand: ICA of COP 15,000,000; where it set the 10 per thousand ceiling: COP 30,000,000. / About US$949,839 of income: about US$4,749 at 5 per thousand, US$9,498 at the ceiling.Decreto Ley 1333 de 1986 art. 196 (from Ley 14 de 1983 art. 33), as replaced by Ley 1819 de 2016 art. 342, Ley 1819 de 2016 art. 342 (art. 196, par. 1 to 3), 2016-12-29 official text · verified 2026-10-26
2. ICA accrues to the municipality where the taxed activity is carried out: industrial activity where the factory is (and selling one's own products is part of the industrial activity); commercial activity where the store or point of sale is, or where the sale is agreed if there is none, and for online and catalogue sales where goods are dispatched; services where they are rendered, with special rules for transport (place of dispatch), pay television, internet and fixed telephony (subscriber's location) and mobile services (user's main domicile). Activities through trusts are taxed where carried out.Ley 1819 de 2016, Art. 343, num. 1 to 3, 2016-12-29 official text · verified 2026-10-26
3. ICA and other taxes, fees and contributions actually paid in the year and related to the business are 100 percent deductible for income tax; income tax itself is not.
Example: ICA of COP 30,000,000 saves COP 10,500,000 of income tax at 35 percent. / About US$9,498 of ICA: about US$3,324 of income tax saved.Estatuto Tributario (Decreto 624 de 1989), as amended by Ley 2277 de 2022 art. 19, Art. 115, first paragraph, 2022-12-13 official text · verified 2026-10-26
4. Colombian holding companies under the CHC regime pay ICA where they carry out a taxed activity in a municipality, but dividends from foreign investments covered by the regime are not subject to ICA.Estatuto Tributario, as amended by Ley 2010 de 2019 art. 77, Art. 898, num. 4, 2019-12-27 official text · verified 2026-10-26
5. The unified property tax (impuesto predial unificado) is set by each municipal or district council between 5 and 16 per thousand of the cadastral value, progressively by socioeconomic stratum, land use, age of the cadastre, area and value. Housing and agricultural property of strata 1 to 3 worth less than 135 monthly minimum wages may be taxed from 1 per thousand. Undeveloped urban land may be taxed above 16 and up to 33 per thousand. When new rates take effect, the total tax may not rise more than 25 percent over the prior year, except where the cadastre update reflects physical or economic changes.
Example: A warehouse with a cadastral value of COP 2,000,000,000: between COP 10,000,000 (5 per thousand) and COP 32,000,000 (16 per thousand) a year, depending on the municipality. / About US$633,226 of cadastral value: about US$3,166 to US$10,132 a year.Ley 44 de 1990 art. 4, as replaced by Ley 1450 de 2011 art. 23, Ley 1450 de 2011 art. 23, 2011-06-16 official text · verified 2026-10-26
6. Late payment interest on national taxes, at the consumer credit usury rate certified by the Superintendencia Financiera less two points, also applies to departmental, municipal and district taxes. For October 2026 the usury rate is 28.59 percent a year, so late interest runs at 26.59 percent a year.Estatuto Tributario, art. 635 as amended by Ley 1607 de 2012 art. 141 and Ley 1819 de 2016 art. 279; Superintendencia Financiera Resolución 1472 de 2026, Art. 635, first paragraph and paragraph, 2026-09-30 official text · verified 2026-10-26
TaxLevied byBaseRate bandNorm
Industry and commerce tax (ICA)Municipality where the activity takes placeGross ordinary and extraordinary income, net of exclusions2 to 7 per thousand industry; 2 to 10 per thousand commerce and servicesLey 1819 de 2016 art. 342 and 343
Unified property tax (predial)Municipality or district where the property isCadastral value5 to 16 per thousand (up to 33 per thousand undeveloped urban land)Ley 1450 de 2011 art. 23

Local taxes a foreign owned operating company in Colombia typically meets

Worked example

  • A logistics company with depots in three municipalities pays ICA to each on the income from services rendered there, at each council's rate, files each municipality's return, and deducts all of it for income tax (art. 115).

Step by step

  1. Register with the tax office of each municipality where the company will carry out industrial, commercial or service activities.
  2. Allocate income by municipality under the territoriality rules of Ley 1819 de 2016 art. 343 and apply each municipality's rate and calendar.
  3. Check the predial bill and cadastral value of any property owned, and the municipal discounts for early payment.
  4. Deduct ICA and predial paid in the year in the income tax return (art. 115).

Common traps

  • ICA is owed to every municipality where activity happens, not just to the domicile (art. 343).
  • Online sales are taxed where goods are dispatched, so warehouse location drives ICA (art. 343 num. 2 lit. c).
  • Bogotá applies its own special rules under Decreto Ley 1421 de 1993 (art. 342 par. 2).
  • Late municipal taxes accrue interest at the national tax rate, 26.59 percent a year in October 2026 (art. 635 par.).

Sources

Related pages

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