Frequently asked questions
How is each regime calculated? (example with a company)
With income of 500,000,000 and costs of 400,000,000 in the trade group with an ICA rate of 11.04 per mille: under the ordinary regime, the taxable base is income minus costs minus ICA (100% deductible, art. 115 of the Tax Code) = 94,480,000; the income tax is 35% of that base (33,068,000, art. 240); adding ICA (5,520,000), the total is 38,588,000. Under the Simple Tax Regime, the tax is the bracket rate (2%, bracket 2) times gross income = 10,000,000, without subtracting costs or adding ICA separately (it is already built into the rate). In this example, the Simple Tax Regime is 28,588,000 cheaper.
How do the Simple Tax Regime brackets work?
The Simple Tax Regime has 4 brackets based on your annual gross income: up to 6,000 UVT (tax value unit: COP 52,374 in 2026), up to 15,000 UVT, up to 30,000 UVT and up to 100,000 UVT; each bracket has its own rate depending on your activity group (art. 908 of the Tax Code). Each bracket’s upper limit is exclusive: with exactly 6,000 UVT of income you are already in the second bracket, not the first. With 100,000 UVT or more you can no longer be on the Simple Tax Regime (art. 905).
Why is the ordinary-regime result for an individual only an upper bound?
For an individual, the calculator applies the progressive table in article 241 of the Tax Code (non-labor income) directly to income minus costs minus ICA, without subtracting the exemptions and deductions a real tax return allows (voluntary contributions, dependents, housing, and others). So the figure shown here is an upper bound: your real tax return would normally come out lower.
How do the employer’s pension contributions affect the result?
The pension contributions your company pays as an employer are discounted from the Simple Tax Regime tax, but the discount cannot exceed the part of the tax that is not ICA (art. 903 paragraph 4 of the Tax Code). This calculator only models a full year of contributions, with no carryover from earlier bimonthly periods.
What does this calculator NOT include?
It does not include the municipal signage tax or the firefighter surcharge (already included in the Simple Tax Regime’s consolidated rate), dividends, the 15% minimum tax rate, the financial transactions tax (GMF), VAT on your sales, the 8% consumption tax on food and beverage service, occasional gains, or the article 912 discount for receiving electronic payments.
Does this calculator include the Simple Tax Regime bimonthly advances?
No. It is an annual calculator: it compares the total for the year, not the six bimonthly advance payments on receipt 2593. Also, individuals under the Simple Tax Regime with prior-year income up to 3,500 UVT only file the annual return and do not pay bimonthly advances (paragraph 3 of article 910 of the Tax Code).
Who cannot be on the Simple Tax Regime?
Among others, the Simple Tax Regime is not available to: taxpayers with gross income of 100,000 UVT or more in the prior year, and companies whose partners are not all individuals resident in Colombia (art. 905); subsidiaries, agencies or branches of Colombian or foreign companies; financial institutions; and those engaged in microcredit, factoring, financial advisory, power generation or sale, car manufacturing or import, or fuel import (art. 906 of the Tax Code).