Colombia: the colors, the coffee, the climate, the cost of living. It’s no wonder Americans and Canadians are flocking here for a lifestyle that feels like a permanent vacation. But here’s the part most expats don’t talk about—at least not until it’s too late.
Taxes.
Yeah, just because you’re sipping a $1 cappuccino in Medellín doesn’t mean your home country—or Colombia—has forgotten about you. And if you’re not careful, you could get hit twice. The only thing worse than paying taxes? Paying them twice.
The Magic Number: 183
Here’s the golden rule: spend more than 183 days in Colombia in any 12-month period, and you’re a tax resident. That means Colombia taxes your worldwide income—whether it’s from your U.S. or Canadian employer, your Airbnbs back home, or your crypto wallet.
Residents: Taxed progressively, starting around 19% and topping out at 39%.
Non-residents: Flat 35% on Colombian-sourced income.
Think you can skirt it by hopping over to Ecuador for a week? Don’t count on it. DIAN (Colombia’s tax authority) isn’t forgetful.
Colombia’s Extra Surprises
Colombia doesn’t stop at income tax. Expats also run into:
VAT: 19% on most goods and services.
Capital gains tax: 10% (20% on lottery wins).
Property tax: 0.4–1.2% annually.
Financial transaction tax: 0.4% every time you move money.
Social security contributions: 30.5% if employed here (20.5% employer, 10% employee).
And here’s a kicker: Canada has a social security agreement with Colombia. The U.S.? Nope. Meaning Americans could end up paying into both systems.
Uncle Sam and the CRA Still Want You
Americans — no matter where you live, you file with the IRS. Always. That means:
Form 1040 – worldwide income.
Form 2555 – Foreign Earned Income Exclusion (up to $130,000 in 2025).
Form 1116 – Foreign Tax Credit.
FBAR & FATCA – report foreign accounts and assets.
Oh, and no U.S.–Colombia tax treaty. No totalization agreement. Translation: the IRS still wants its pound of flesh, even if you’re already paying Colombian taxes.
Canadians — it depends on whether the CRA sees you as a resident. They’ll look at your “residential ties”: home, family, bank accounts, driver’s license. File Form NR73 if you’re unsure. Even as a non-resident, Canada taxes Canadian-source income like pensions or rentals. The good news? There is a Canada–Colombia tax treaty to help you avoid double taxation.
How to Stay Sane (and Legal)
Track your days – don’t cross 183 without knowing the consequences.
Use credits and treaties – Americans: FEIE or foreign tax credit. Canadians: treaty provisions.
Structure income smartly – separate personal and business accounts, know how Colombia classifies your income.
Keep records – in both pesos and dollars. Cloud backups are your friend.
Hire pros – one accountant in Colombia, one at home. Bonus points if they talk to each other.
Myths Expats Believe (and Why They’re Wrong)
“I don’t make money here, so I don’t owe taxes.” Wrong. Residents are taxed on worldwide income.
“I only need to file back home.” Wrong. You may need to file in both.
“Nobody will check.” Wrong. Colombia, the U.S., and Canada share financial data.
“I’ll deal with it later.” Wrong. Colombian penalties can hit 200% of what you owe.
The Bottom Line
Living in Colombia is incredible—cheap rent, endless sunshine, and coffee that tastes like magic. But if you don’t play by the tax rules here and back home, your dream life can turn into an expensive nightmare.
So, track your days. File on time. Use the credits and treaties available to you. And for the love of coffee, talk to a real tax pro.
👉 Want a step-by-step checklist that lays this all out for Americans and Canadians in Colombia? Download our free Expat Tax Checklist today and save yourself from costly surprises. Download it HERE.