Despite the rising popularity of cryptocurrency in Colombia, there is no clear tax regime or clarification regarding taxation of crypto in Colombia. While the government issues warning regarding risk and tax evasions, the treatment of crypto assets while calculating the tax you owe is not laid down anywhere. In Colombia, 4.8% of the population, that is over 2.5 million people, hold cryptocurrency.
Do you have to pay crypto tax in Colombia?
Yes, income generated from crypto is taxed in Colombia.
When do you have to pay tax on crypto in Colombia?
If you undertake any crypto transactions that generate income, you will have to pay taxes.
What crypto transactions are taxable in Colombia?
Selling crypto and swapping it must be taxable if any gains are made.
What are the Crypto Tax Rates in Colombia?
Crypto is taxed as ordinary income in Colombia.
Colombia Income Tax Brackets (2023)
| Taxable income (TVU *) | Marginal rate (%) | |
| Over | Not over | |
| 0 | 1,090 | 0 |
| 1,090 | 1,700 | 19 |
| 1,700 | 4,100 | 28 |
| 4,100 | 8,670 | 33 |
| 8,670 | 18,970 | 35 |
| 18,970 | 31,000 | 37 |
| 31,000 | And up | 39 |
Colombia Capital Gain Tax Rates (2023)
Colombia has a flat rate for Capital Gains tax, which is at 15%.
Although, if the gains are made from lottery or gambling, then the rate levied is 20%.
How is Tax Calculated on Cryptocurrency in Colombia?
With crypto being taxed as ordinary income and only the income generated being taxed, in order to calculate the tax owed, you need to determine the selling and cost price of your transaction. The price at which you sold your crypto is your selling price while the price at which you acquired the crypto is your cost price. When you sell your asset, you might be selling assets that you acquired together at the same price or you might be selling a consolidated asset which you gathered over time. This makes calculating the cost price a bit trickier. Two methods are used to determine the cost price globally: FIFO (First In First Out) and ACB (Average Costs Based).
According to FIFO Method, you sell your oldest acquired coin first and cost is calculated according to the respective prices at which the coin was bought. Whereas, in ACB, time of buying doesnt matter and average cost is taken into account.
Let’s take an example,
Say you bought 2 BTC for COP 20,000 in 2020 and 4 BTC for COP 60,000 in 2021. Then you sold 4 BTC in 2022 for COP 100,000:
- FIFO METHOD
You sell 2 BTC from 2020 and 2 BTC from 2021. So cost price is:
= 20,000 + (2/4)*60,000
= COP 50,000
Profit = 100,000 – 50,000
= 50,000
Here, taxes are levied on COP 50,000 .
- ACB METHOD:
All coins are of the same denomination. Therefore, cost price for one coin:
= (20,000 + 60,000)/6
= COP 13,333
So, cost price of 4 coins:
= COP 53,333
Profit = 100,000 – 53,333
= 46,666
Here, taxes are levied on COP 46,666.
Is there any Crypto Tax Free in Colombia?
As only income generating transactions are taxable, purchasing and transferring crypto should not be taxable in Colombia.
Crypto Tax in Colombia – FAQs
Do you have to pay tax when you buy crypto in Colombia?
No, you don’t have to pay tax when you buy crypto in Colombia.
Do you have to pay tax when you sell crypto in Colombia?
Yes, sale of crypto is taxed in Colombia.
Do you have to pay tax when transferring crypto in Colombia?
No, transferring should not be taxable in Colombia.
Do you have to pay tax when spending crypto in Colombia?
It is uncertain whether spending in crypto is taxable in Colombia.
Is swapping crypto taxable?
As swapping crypto might generate, it should be taxable in Colombia.
How much tax on crypto gains in Colombia?
Taxable income (TVU *) Marginal rate (%) Over Not over 0 1,090 0 1,090 1,700 19 1,700 4,100 28 4,100 8,670 33 8,670 18,970 35 18,970 31,000 37 31,000 And up 39
How do I avoid capital gains tax on crypto in Colombia?
The rules of taxation in Colombia are very uncertain. Therefore, it is unclear how capital gains tax can be avoided in Colombia.
Market Research Intern, Octaloop
Maitreyee takes a keen interest in financial technologies and their potential to transform lives at the grassroots. Put together with her penchant for Economic Research, she brings tonnes of academic and actionable insight into our products. Maitreyee is contributing at Binamite as a Market Research Intern, and when she's not doing that, you can find her exploring the city or buried in a book.