Figures verified 7 October 2026 · Applies to: 2026 rules
Colombia’s simplified tax regime, the Régimen Simple de Tributación (RST), is often recommended to small businesses as a way to pay less and file less. Foreign founders who set up a Colombian SAS naturally ask whether they can use it too. The short answer: generally, no. Here’s why, and what to do instead.
What the Régimen Simple is
The RST is an optional regime that replaces several taxes with one consolidated tax calculated on gross income, rather than on profit:
- It replaces income tax, the consolidated municipal ICA and the national consumption tax (INC).
- It does not replace VAT (IVA). RST taxpayers that sell taxed goods or services still charge and file VAT.
- The ceiling is 100,000 UVT of gross income (COP 5,237,400,000 at the 2026 UVT).
- Businesses opt in at the start of the year. For 2026, the deadline was 27 February 2026.
An older cap of 12,000 UVT on liberal professions was struck down by the Constitutional Court in Sentencia C-540 of 2023.
Why foreign-owned companies are generally excluded
The RST’s eligibility rules exclude certain taxpayers, and the exclusions generally reach situations where a non-resident is involved, such as companies owned by foreign shareholders and foreign entities operating in Colombia. In practice, a foreign-owned SAS should plan on the ordinary regime. The details depend on the ownership structure, so confirm your own case before ruling the RST in or out.
A note on RST rates
You’ll find RST rate tables online, but be careful. For professional services, two incompatible sets of rates circulate on reputable-looking sites. Rather than add a third table, we recommend confirming the rate for your activity group with the current statute and the DIAN before deciding. A decision based on the wrong table can be expensive.
Is the RST even cheaper?
Not always, even for businesses that qualify. Because it is calculated on gross income, it can cost more than the ordinary regime for a business with thin margins or large costs. It tends to suit high-margin service businesses with few deductible costs. It’s a calculation, not a rule of thumb.
What a foreign-owned company does instead
- Corporate income tax at 35%, with the 15% minimum tax test. See corporate income tax and the 15% minimum tax.
- VAT filed bimonthly or every four months depending on size.
- Monthly withholding tax returns, electronic invoicing and, if you hire, payroll.
- Municipal ICA, filed separately.
The full calendar is in what a foreign-owned company needs from its Colombian accountant.
If you are a foreign individual, not a company
Foreign individuals who are Colombian tax residents and run a business in their own name are in a different position from a foreign-owned company. Whether the RST makes sense for them is a separate analysis. Residency depends on days present (more than 183 in any rolling 365-day period), not on visa type. See the 183-day rule.
Bottom line
If you’re setting up a Colombian company with foreign ownership, budget on the ordinary regime. If someone suggests the RST, ask them to confirm, in writing, how your specific ownership structure qualifies.
Talk to us
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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.