Figures verified 7 October 2026 · Applies to: AG2025 / 2026 rules
If you earn in dollars, hold a foreign bank account or own property abroad, your Colombian tax return has to turn those amounts into pesos. The obvious answer, “use the rate on 31 December,” is often wrong. Colombian tax law has a specific rule, and it differs from what most expats assume.
What the TRM is
The TRM (tasa representativa del mercado) is Colombia’s official daily USD/COP exchange rate. It is calculated from actual market transactions and certified for each day. It is the rate Colombian tax law refers to. For reference, the TRM for 7 October 2026 was COP 3,216.01 per US dollar.
The core rule: Article 288 and the TRM of initial recognition
Article 288 of the Estatuto Tributario says items held in foreign currency are measured at the TRM at the moment they are first recognised. Exchange-rate movements after that have no tax effect until the item is realised, meaning sold, collected or paid. At that point, the difference between the original TRM and the TRM at realisation produces a taxable exchange gain or a deductible exchange loss.
The DIAN has said this rule applies to individuals as well as companies, including individuals who are not required to keep accounting records (Oficio DIAN 21835 of 2019).
What this means in practice
| Item | Which TRM, generally |
|---|---|
| Income received in foreign currency (salary, fees, pension, rent) | The TRM on the date the income is recognised. For individuals who do not keep books, income is generally realised when it is actually received. |
| A foreign asset (bank balance, investment, property) | The TRM on the date you acquired it, carried forward rather than restated each 31 December. |
| A foreign-currency debt | The TRM when the debt arose, until it is paid. |
| Selling or cashing out a foreign asset | The difference between the acquisition TRM and the TRM on the date of sale gives the exchange gain or loss. |
The same principle shows up in the foreign assets declaration. The DIAN instructs that foreign assets be converted at the TRM of their initial recognition.
Why it matters
- Thresholds. Converting at the wrong rate can push your income or assets above (or below) a filing threshold.
- Phantom gains. When the peso weakens, restating dollar assets at year-end rates overstates your net worth and can feed into wealth-tax calculations.
- Consistency. The DIAN cross-checks information from banks and other sources. Inconsistent conversions across years invite questions.
A contested area
This is not entirely settled. The DIAN has taken the position that individuals can recognise exchange income when they simply move foreign-currency investments, even without converting to pesos. Practitioners have criticised this, arguing that Art. 288 must be read together with the realisation rules in Arts. 26 and 27. If you move significant foreign-currency investments between accounts or products, get advice on the current position before filing.
Practical tips
- Keep a log of the date and amount of each foreign-currency receipt and each asset acquisition.
- Record the TRM for each date from an official source, and keep it with your records.
- Don’t mix systems. The US uses its own conversion rules. If you also file in the US, keep the two calculations separate.
- Document the assets you held before becoming resident. Their acquisition dates and values matter later.
Get help with the conversions
If your return involves foreign income or assets, we can handle the exchange-rate work as part of preparing it. Returns start at USD 80. See our pricing.
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The Colombian Accountant helps foreign investors and residents with Colombian tax returns, company formation and ongoing compliance, in English. Get your fixed quote.
This article is general information, not tax or legal advice. Colombian tax law changed materially between December 2025 and September 2026, and some rules described here are subject to pending legislation or litigation. Confirm your situation with a professional before acting.