Friday, January 17, 2020

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Colombia’s national innovation and digital transformation adviser to President Ivan Duque publicly announced January 14 that the Duque administration and various allies in the Colombian Congress are developing a new law that will legalize more technology-platform taxi operations -- like the now-illegal “Uber” taxis.

Government initiatives to ban unlicensed taxis -- including “Uber” -- have been in the works for years, long before President Duque took office in July 2018. But the long-expected ban finally takes effect February 1, 2020.

Victor Manuel Muñoz, national innovation and digital transformation advisor to the President of Colombia, revealed in a January 14 press conference at the Transport Ministry that the national government’s new scheme will take a few more months to develop.

Until the new law takes effect, Uber Colombia announced January 10 that it will comply with the February 1 regulation, which disallows continued operations of private taxis that fail to conform to all tax, insurance and licensing regulations in Colombia.

“Uber respects the law and the decisions issued by the authorities,” according to the Uber-Colombia press bulletin. “However, decisions like [the ruling by the Transport Ministry] also respond to the absence of a regulation covering the collaborative mobility service through technology platforms in Colombia.”

According to a January 14  press statement from the Colombian president’s office, the Duque administration “will work together with the Congress of the Republic to present a [law and] regulation, so that [Uber-like digital] platforms can legally provide their service in the country.”

Three political parties in Congress that collectively represent a majority are already working with the administration on a new bill: Centro Democratico, Partido Verde and “La U,” as noted in a separate report from Colombian business newspaper Portafolio.

The proposed law would enable private individuals to offer Uber-like taxi service without affiliation to a conventional taxi company. However, these individuals, their vehicles, and their affiliated technology-platform operators would have to enroll in a new “National Unique Registry of Private Intermediate Transport Service” (“Runspti” in Spanish initials), according to the report.

A mandatory insurance policy would cover drivers, passengers, vehicles and third parties, without which the individual driver would be blocked from enrolling in “Runspti.”

In addition, the technology-platform operators (tapping “Uber-like” private drivers) would be required to contribute 1% of earnings to a new national fund designed to compensate today’s legal taxi drivers, who pay vastly higher costs-of-operation than the illegal drivers.

Unlike “Uber” operators, legal taxis in Colombia today pay huge sums (around US$30,000 to US$40,000 per vehicle) for a “cupo” (quota) enabling circulation in various cities.

The new legislation aims to phase-out or modify this quota system in future years, hence enabling conventional taxis to compete with “Uber-like” taxis on a cost-equivalent basis.

In the meantime, Colombia’s Transport Minister Ángela María Orozco announced January 10 that Colombia already has 24 alternative, tech-platform private transport services that meet existing regulations (unlike "Uber.")

“The use of technological platforms for the provision of the transport service in the individual mode of passengers in taxi vehicles are regulated by the national government Decree 1079 of 2015 and by the Ministry of Transportation,” Orozco stated.

“There are currently around 24 platforms enabled for this purpose. In no way are we against technological development. We support initiatives of this nature, but the life of passengers and the provision of public transport services must be protected under the technical and legal conditions established by Colombian regulations.

“Reforms must be carried out in the Congress of the Republic to anticipate new phenomena of collaborative [transport] economy, to allow a leveling of the rules-of-the-game for all actors, with new conditions of qualification,” she added.

As noted in a separate report from Colombian newspaper El Tiempo (citing Transport Ministry data), the existing, legal, alternative tech-platform transport services include “Etaxi,” “Prontuz,” “Red Amarilla,” “Acar Technology,” “Taxi Finder,” “Farley,” “Coopebombas,” “Taxis Ya,” “Digi+,” “City Taxi,” “Taxi Web,” “Mi Águila,” “Taxi Élite,” “T-driver,” “Me Voy,” “Megataxi,” “White cloud,” “Infotaxi,” “Muvit,” “Smart Taxi,” “Yougo,” “Quua,” “Taxis Cabarellos,” “Play Taxi,” “Taxis Cafetalito” and “Rio App.”


Colombia President Ivan Duque on December 27 signed into law a new national tax bill that mainly helps lower-income people and incentivizes job growth in legal industries.

The new law “seeks to continue promoting economic development and creates the basis for reducing inequality and closing income gaps in the country,” according to the official press statement following the President’s signing.

The measure would generate an estimated COP$13.5 trillion (US$4.1 billion) in new revenue in 2020, via income taxes on people with relatively high incomes; a surcharge on the financial system; and a multi-phase VAT (value-added tax) on beer and soft drinks, according to the summary.

“Normalization” measures in the bill would generate COP$5.3 trillion (US$1.6 billion); while economic growth stimulation measures would result in another COP$3.2 trillion (US$971 million). Furthermore, a new electronic tax-billing-and-collection system is expected to raise another COP$5 trillion (US$1.5 billion), according to the summary.

The full text of the new law (in the original Spanish) is available here: https://dapre.presidencia.gov.co/normativa/normativa/LEY%202010%20DEL%2027%20DE%20DICIEMBRE%20DE%202019.pdf

“This legislation links social programs such as the VAT refund for 2.8 million low-income households, plus three days without VAT per year, the reduction in [individual] health [insurance] contributions from 12% to 4% for pensioners and vulnerable populations, plus incentives to companies that create jobs for young people between 18 and 28 years.”

“This reform will allow us to continue increasing resources for education, for health, for household improvements, and for bringing clean drinking water supplies to the most vulnerable areas of our country,” added President Duque.

The measure, officially dubbed the “Economic Growth Law,” contains measures that will continue to boost the growth of Colombia's Gross Domestic Product (GDP) and foreign direct investment (FDI), hence creating more jobs in the “formal” (legal, taxable) economic sectors.

The new law also establishes income-tax benefits for large, medium, small and micro enterprises, as well as VAT discounts for imported capital goods “in order to reduce costs so that the business sector is modernized more quickly and becomes more cost-competitive,” according to the press summary.

The law also includes a mechanism by which compliance with the tax obligations of micro- and small businesses are simplified.

Another provision includes nearly COP$2 trillion (US$607 million) received from financial-sector taxes for upgrading rural, tertiary roads -- in order to improve logistics in many of Colombia’s remotest regions, as noted by the Transport Ministry.


New rules adopted by the Colombian government allow long-time foreign nationals with existing, valid permanent residency status in Colombia to avoid the once-every-five-years trip to Bogota to renew the visa that’s already stamped inside your non-Colombian, foreign passport.

However, already-permanent, long-time legal residents here (editor's note: I've been living here continuously for 14 years) still need to renew their “cedula de extranjeria” every five years, according to Migracion Colombia, the official Colombian government migratory agency.

Even despite elimination of the former requirement to renew your visa every five years, you still might find it useful to have that existing Colombia visa stamp transferred at Migracion Colombia offices in Bogota from your expired, non-Colombian passport to your new, non-Colombian passport. Several agencies here in Medellin can do that for you, enabling you to avoid that personal trip to Migracion Colombia in Bogota.

On the other hand, personal reports from some expats here indicate that the old Colombia visa stamp  in your old passport (example: the old, expired USA passport that now has two holes drilled through it) has sometimes been accepted by Colombian immigration authorities whenever re-entering Colombia from a foreign trip. But to eliminate any doubts or worries, you might as well have your existing Colombian visa stamp transferred to your new, non-Colombian passport, whenever you have to renew that foreign passport.

As for your “cedula de extranjeria,” this document can be renewed at the Migracion Colombia agency office (formerly "DAS") in the Belen neighborhood of Medellin, every five years.

Meanwhile, Colombia’s foreign ministry announced that other changes to visa regulations took effect in November 2017.

In that announcement (see complete text in Spanish here: http://legal.legis.com.co/document?obra=legcol&document=legcol_74fa455ce7e44df19296af36ef78d8e8), the Ministry clarified that it’s regrouping many different types of current visas into three main categories: visitor (V), migrant (M) and resident (R).

Many of the changes are superficial (changes of words or categories, but not meaning), but some clarifications are worth noting.

For example: “Visitors” for tourism, for investigating business opportunities, for contract negotiations and for sales representations are allowed stays of up-to-180 days, but such visitors cannot do local contract work.

However, “visitors” attending trade shows, sporting events, artistic events, doing film productions, executing journalism assignments, occupying temporary corporate assignments (for a non-Colombia-headquartered company) and performing certain volunteer projects are allowed to “work” at those assignments or events, according to the Ministry.

“Migrants” (those intending to become residents) who are married to a Colombian national -- or parents of a Colombian-born adopted child -- likewise can “work” in Colombia for up-to-three-years, and also can apply to become a “resident” after two years.

In addition, “migrants” that obtain a local work contract or become a partner in a commercial enterprise here can obtain a “resident” visa after five years.

For real-estate investors, “migrant” visas can be obtained by investing at least 350 minimum Colombian monthly salaries. The current Colombian minimum monthly salary -- COP$738,000 – multiplied by 350 equals COP$258 million, or about US$88,000 at current COP/USD exchange rates and current Colombian legal salary minimums.

To obtain the visa, the real-estate investment must be accompanied by proof of free title (“certificado de libertad y tradicion del inmueble adquirido que pruebe titularidad”) as well as proof of registry of the foreign funds used for the purchase (“communicacion expedida por el Departamento de Cambios Internacionales del Banco de la Republica”).

For those seeking a “migrant” visa as a retiree, the applicant must show that a pension (such as Social Security or a private-sector pension) is at least three times the Colombian minimum monthly salary (COP$2,214,000 or about US$753). Alternatively, an applicant could get a “migrant” visa if receiving at least 10 times the minimum monthly salary (COP$7,380,000) if this income is from investments with regular payouts (such as annuities).

For “empresarios” seeking a “migrant” visa, the applicant must show a capital investment of at least 100 minimum monthly salaries (COP$73.8 million or about US$25,000). For “independent” professionals, a “migrant” visa can be obtained with bank records indicating earnings of at least 10 minimum monthly salaries over the prior six months.

Real-estate investors, commercial partners, contracted workers and pensioners with “migrant” visas can apply for “resident” visas after five years.

In addition, registered foreign direct investors (FDIs) investing at least 650 minimum monthly salaries (COP$480 million, or about US$163,000) can apply for a “resident” visa.

Foreigners married to Colombian nationals also will continue to qualify for “resident” visas, as in prior visa regulations. “Resident” visas are good for five years and are renewable.

First-time (and some renewal) visa applications are now processed on-line through the Ministerio de Relaciones Exteriores web-site (see: http://www.cancilleria.gov.co/tramites_servicios/visas).

Most expats in Colombia make a personal trip to Ministry offices in Bogota to obtain their visa, although some specialist agencies and lawyers here in Medellin offer to handle that process for you.


Colombian Congress Approves 2019 Tax Law

Thursday, 20 December 2018 11:44 Written by

Colombia President Ivan Duque and Minister of Finance Alberto Carrasquilla on December 19 both hailed final votes in the Colombian House and Senate to approve a revised tax package for 2019.

“The approved bill retains the initial spirit of protecting the most vulnerable population of the country and strengthening the collection through the taxation of the population with the highest income,” according to a Finance Ministry press statement.

The new law “aims to recover investment in the country and allow the economy to grow above 4% [annually], removing the burden on the generators of employment and encouraging investment,” the Ministry added.

Unlike the original proposal, the new law won’t extend the current 19% value-added tax (VAT) on many products to the basic “food·basket” that includes what most Colombians buy every day. However, beer and carbonated soft-drinks – previously exempt from IVA -- will now be hit by that tax.

On the other hand, neither pensions nor certain service contracts will be taxed, contrary to the original tax proposal.

Meanwhile, the new law strengthens the hand of the national tax-collection agency (DIAN) in the fight against tax evasion, including possible prison sentences for evaders.

Responding to a proposal from President  Duque, “tax conditions were created so that companies related to the ‘orange’ economy [high-tech, environmentally ‘green’] could develop, benefiting cultural and technological ventures that generate added value to economic growth,” the Ministry noted.

According to President Duque, the new law “promotes entrepreneurship, simplifying and facilitating the work of micro-, small, medium and large companies, which currently face a huge and inequitable tax burden that does not allow them to grow, and substantially reduces the fiscal asphyxia in sectors generating formal employment.”

Corporate income-tax rates will be gradually reduced from 33% today to 30% over the next four years.

“To increase productivity, VAT will be allowed to be deducted from the investment in capital goods starting in the taxable year 2019. In addition, companies will be able to deduct 50% of the ‘Industry and Commerce Tax’ from the taxable year 2019 and 100%l in 2022. The deduction of 50% of the ‘Lien on Financial Movements’ is maintained,” according to the Ministry.

Meanwhile, a new “SIMPLE” alternative taxation system “seeks to simplify compliance with the tax obligations of legal or natural persons with annual gross income of less than COP$2.75 billion [US$847,500]. Using a single form, they can settle their income tax obligations and ICA [Industry and Commerce Tax], reducing the costs of compliance with their tax obligations and promoting formalization [of employment],” according to the Ministry.

“In addition, SIMPLE system rates for small stores, mini-markets, micro-markets and hairdressers already are included in VAT liability. On the other hand, restaurants will liquidate the consumption tax in the same form,” according to the Ministry.

The new law also includes a 1% tax on assets of more than COP$5 billion [US$1.54 million], while real estate sales valued at more-than COP$918 million [US$282,760] will be hit by a 2% consumption tax, except for rural properties destined for agricultural production.

In addition, the personal income tax rate is increased for people with average monthly incomes greater than COP$40 million [US$12,320].

The extra tax revenues resulting from the new law “will be directed mainly to address the subsidized health system, social programs such as ‘Families in Action’ and the ‘Elderly and School Feeding Program,’” according to the Ministry.


The U.S. Agency for International Development (USAID) “Oro Legal” (legal gold) project management announced July 17 that toxic mercury dumping and processing has declined “significantly” among artisanal gold-mining operations in Bajo Cauca as well as Northeast Antioquia.

The agency noted that Colombia officially banned all further use of mercury in gold-mining activities as of July 15, 2018, following a five-year “transitional period” that started in 2013.

Socially responsible national and international gold miners in Colombia abolished mercury usage years ago. But some informal and criminal gold-mining operators here continue to dump toxic mercury, poisoning the environment, gold-processing workers and nearby populations.

Following the Colombian government’s mercury-phase-out transitional period, “some concerns arise regarding [the mercury-ban law’s] effectiveness,” according to USAID.

However, recent studies indicate a “significant reduction in the use of [mercury] in the Bajo Cauca Antioqueño and Northeast Antioquia mines, and there is also evidence of a decrease in [mercury vapor] emissions in the air in populated areas, as demonstrated by the comparative measurements made by USAID during the years 2016 and 2017,” according to the agency.

USAID’s “Legal Gold” study examined use of mercury in local gold mines, analyzed commercial movement of mercury, and measured mercury vapors in certain towns via a novel sampling protocol.

Samples were taken in 63 small mining production units located in Bajo Cauca and Northeast Antioquia, according to the agency.

“The mining units that received or receive accompaniment from the USAID Legal Gold program’s formalization process in the last two years have registered an approximate elimination of 7.8 tons of mercury in the department of Antioquia,” the agency reported.

“This is due to the technical assistance provided in the field and to the [artisanal miner] formalization contracts or subcontracts established between owners and small-scale miners, which obliges the latter to process their material in zero-mercury [gold-processing] plants.

“However, due to cultural and economic situations of the small miner, mercury use still persists. Comparative studies indicate that, on average, in the three types of [artisanal] mining [open-pit, alluvial and mini-dredge] in 2016, for each gram of gold produced, 14 grams of mercury were used, while in 2017 the figure dropped to 6.15 grams to process one gram of gold.,” according to USAID.

“In December 2016, in order to establish a control on the importation and commercialization of mercury and all products that contain it, the national government issued Decree 2133 of 2016, which establishes the process and allowed quota for the importation of mercury.

“Likewise, the government determined that the import quota of mercury to the country for the period from September 16, 2017 to September 15, 2020 was stipulated at two tons per year, and this should be used for activities other than mining.

“This reduction in the import quota of mercury hindered the acquisition of this metal in the different municipalities and multiplied its real price. Before the controls, a kilogram of mercury was quoted at COP$220,000 [US$76], but today this figure amounts to COP$750,000 [US$260 ],” the agency added.

As for mercury-vapor air-pollution studies, the agency took air samples in gold-trading and processing centers in six municipalities of Antioquia and three of Chocó: Segovia, Remedios, El Bagre, Caucasia, Zaragoza, Santafé de Antioquia, Quibdó, Condoto and Istmina.

Over time, the investigators discovered the emergence of new mercury-vapor hot-spots "in the perimeter areas of the town, away from shopping areas and gold purchases,” according to the agency.

“The conclusion of this monitoring is that [mercury vapor pollution] declined in urban areas, which indicates less impact on public health, but a greater dispersion was detected in peripheral areas, a situation that makes [mercury pollution] control difficult,” added Peter Doyle, USAID’s legal-gold program director.

While government controls on the importation and commercialization of mercury along with prohibition of the burning of gold-processing amalgams in residential, commercial institutional areas has helped cut such pollution, more remains to be done.

“The progress in reducing mercury has been impressive and little recognized, but it is going to reach a point where some miners do not have the culture, technology and funding sources for [mercury] elimination [and these miners] will need more support to achieve elimination,” Doyle concluded.


Colombia Visa Changes Take Effect November 2

Friday, 29 September 2017 14:49 Written by

Colombia’s foreign ministry (Ministerio de Relaciones Exteriorores) has announced that changes to its visa regulations will take effect November 2.

In the announcement (see complete text in Spanish here: http://legal.legis.com.co/document?obra=legcol&document=legcol_74fa455ce7e44df19296af36ef78d8e8), the Ministry clarifies that it’s regrouping many different existing visa categories into three main categories: visitor (V), migrant (M) and resident (R).

While some changes are superficial -- changes of words or categories, but not meaning -- some clarifications are worth noting.

For example: “Visitors” for tourism, for investigating business opportunities, for contract negotiations and for sales representations are allowed stays of up-to-180 days, but such visitors cannot do local contract "work."

However, “visitors” attending trade shows, conferences, sporting events, artistic events, doing film productions, executing journalism assignments, occupying temporary corporate assignments (for a non-Colombia-headquartered company) and performing certain volunteer projects are allowed to “work” at those assignments or events, according to the Ministry.

Those obtaining “migrant” visas (that is, those intending to become permanent residents) who are married to a Colombian national -- or parents of a Colombian-born adopted child -- likewise can “work” in Colombia for up-to-three-years, and also can apply to become a “resident” after two years.

In addition, “migrants” that obtain a local work contract or become a partner in a commercial enterprise here can obtain a “resident” visa after five years.

For real-estate investors, “migrant” visas can be obtained by investing at least 350 minimum Colombian monthly salaries. The current Colombian minimum monthly salary -- COP$738,000 – multiplied by 350 equals COP$258 million, or about US$88,000 at current COP/USD exchange rates and current Colombian legal salary minimums.

To obtain the "migrant" visa, the real-estate investment must be accompanied by proof of free title (“certificado de libertad y tradicion del inmueble adquirido que pruebe titularidad”) as well as proof of registry of the foreign funds used for the purchase (“communicacion expedida por el Departamento de Cambios Internacionales del Banco de la Republica”).

For those seeking a “migrant” visa as a retiree, the applicant must show that a pension (such as Social Security or a private-sector pension) is at least three times the Colombian minimum monthly salary (COP$2,214,000 or about US$753). Alternatively, an applicant could get a “migrant” visa if receiving at least 10 times the minimum monthly salary (COP$7,380,000 or about US$2,510) from investments with regular payouts (such as annuities).

For “empresarios” seeking a “migrant” visa, you must show a capital investment of at least 100 minimum monthly salaries (COP$73.8 million or about US$25,000). For “independent” professionals, a “migrant” visa can be obtained  if your bank records indicate earnings of at least 10 minimum monthly salaries over the prior six months.

Real-estate investors, commercial partners, contracted workers and pensioners with “migrant” visas also can apply for “resident” visas after five years.

In addition, registered foreign direct investors (FDIs) investing at least 650 minimum monthly salaries (COP$480 million, or about US$163,000) can apply for a “resident” visa.

Foreigners married to Colombian nationals also will continue to qualify for “resident” visas, as in prior visa regulations. “Resident” visas are good for five years and are renewable.

Visa applications are now processed on-line through the Ministerio de Relaciones Exteriores web-site (see: http://www.cancilleria.gov.co/en/procedures_services/visas).

After expats submit their applications, they typically make a subsequent trip to Ministry offices in Bogota to obtain their visa, although some specialist agencies and lawyers here in Medellin offer to handle that process for you.


Expat Taxes for USA 2016 Tax Year: Avoid Confusion

Wednesday, 01 February 2017 10:39 Written by

Editor’s Note: The following column was written by IRS enrolled agent and chartered financial analyst (CFA) John Ohe of Hola Expat Tax Services. Medellin Herald does not specifically endorse the author’s opinion; this column is for general information only and should not be construed as personal tax advice.


Colombia’s House and Senate on December 28 voted to approve a wide-ranging tax-reform law, which won immediate approval from President Juan Manuel Santos.


Editor’s Note: The following column was written by IRS enrolled agent and chartered financial analyst (CFA) John Ohe of Hola Expat Tax Services. Medellin Herald does not specifically endorse the author’s opinion; this column is for general information only and should not be construed as personal tax advice.


About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

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