Colombia’s Net Worth Tax
Colombia’s Congress passed Law 1,370 (12/30/2009) enacting a Net Worth Tax. The new tax will be effective as of January 1, 2011 and apply to individuals, companies or “de facto companies” with a net worth equivalent or higher than COP$ 3,000,000,000 (approximately US$1,588,983), after certain applicable deductions.
Shares of Stock issued by local companies and up to $150,000 of the value of real property used as the principal home of the taxpayers are deducted or excluded from the tax. Taxpayers with a liquid net worth valued between COP$3,000,000,000 and COP$5,000,000,000 (approximately US$2,648,305) will pay a Net Worth Tax at a 2.4% rate. In the case of higher net worth, the rate is increased to 4.8%. The value of the Net Worth Tax cannot be used as a deduction for income tax purposes.