Colombia
The Colombian Government has stepped up efforts to reassert government control throughout the country, and now has a presence in every one of its administrative departments.
Despite decades of internal conflict and drug related security challenges, Colombia maintains relatively strong democratic institutions characterized by peaceful, transparent elections and the protection of civil liberties. The country has 32 departments and one capital district.
Colombia is home to the fourth largest automobile fleet in Latin America, only behind Brazil, Mexico, and Argentina.
Thank you to contributors to the Colombia WikiFleet page: BDO; SEPA Consultants
Chapter 1: Economic and business environment
| Demographics | Population 52 million (2022) |
|---|---|
| Capital | Bogota (7.7 million) approximately 11mn in the metropolitan area |
| Major cities | Bogota, Medellin (3.7mn), Cali (3.4mn), Barranquilla (2.3mn), Cartagena (1.0mn), Cucuta (0.8mn) |
| Languages | Spanish |
| GDP | 2022 estimate (Nominal) |
| Unemployment rate | 10.3% (December 2022) |
| Main industries | Agriculture – products: coffee, cut flowers, bananas, rice, tobacco, corn, sugarcane, cocoa beans, oilseed, vegetables; forest products; shrimp Industries: textiles, food processing, oil, clothing and footwear, beverages, chemicals, cement; gold, coal, emeralds |
| Currency | Colombian peso (COP), USD 1 = COP 3,771 (6 August 2020) |
| Interest rate | 12.75% (January 2023) Source: Trading Economics |
| Fleet Maturity Index (scaling) | Approximately 61% of multinational companies in Colombia offer company's cars to some of their employees. |
| Political key info | Gustavo Petro has been the president of Colombia since August 7, 2022. (four-year term). |
| Inflation | 13.25% (January 2023) Source: Trading Economics |
Chapter 2 : Automotive market, segments & sales
| Total Car park | 6.8 million cars, approximately one car per eight inhabitants (est. 2021) 16.5mn total passenger vehicles, including 9.7 motorcycles (57% of the total) |
|---|---|
| New vehicle registrations (Cars, LCV, Trucks) | 2022 Approximately 4% are luxury passenger vehicles |
| Top 5 brands (total market) | 2022 (total units sold: 262,565) 1. Renault (49,427 units) up 2.9% y-o-y (18.8% market share) Premium brands led by Mercedes Benz with 3,933 units, followed by BMW, Audi, and Volvo El Carro Colombiano source: Andemos |
| Model preference top 5 (total market) | 2022 2021 premium brands 2. Mercedes Benz GLC 300 (552 units) +17% 3. Mercedes Benz GLE 450 (552 units) +67% 4. BMW X3 (518 units) +47% 5. BMW Volvo XC60 (415 units) +23%
source: Andemos |
| Dealer network (including fleet dealer network) | 750 car dealers around the country |
| Used car market/renewal cycle | According to figures from the National Traffic Registry, RUNT, as of 2017 there have been 1,047,428 transfers, compared to a total of 699,203 new registrations (including motorcycles). |
Chapter 3: Company car market
| Total Fleet Park (company cars)/Fleet penetration in total fleet sales | This information is not available, but it’s estimated that 15% of vehicles in Colombia are fleet vehicles. Considering a total automobile fleet of 6.8 million, this brings the fleet park just over one million. Most fleets are small. A company with 20 vehicles is considered a large fleet. |
|---|---|
| Evolution fleet sales (last 5 years) | In 2021, LCV sales rose 34% to 28,579 units from 21,391 (source: OICA) |
| Top 5 fleet brands (fleet market) | 2021 1. Renault 2021 source: Andemos |
| Fleet Model preference top 5 (fleet market) | 2021 1. Mazda CX30 (11,214 units) +99% year-over-year source: Andemos |
Chapter 4: Taxation & legislation
| Company car taxation in Colombia | |||||||||||||
| The basis of company car taxation in Colombia is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any. | |||||||||||||
| 1. Car taxation | |||||||||||||
| 1.1. Registration tax | |||||||||||||
| Taxable event
| New vehicles: In order to get the vehicle registered it is required to have the invoice (in case of local manufacturing), the import license, taxes receipts, and the registration certificate of the National Registry of Transport (RUNT for its Spanish acronym).
Approximate rates in USD$ for 2017
| ||||||||||||
| 1.2. Annual circulation tax | |||||||||||||
| Taxable event
Taxable person
Tax due
Taxable period | The registration of a vehicles (for private or public use) in a local jurisdiction, for example: Bogota.
The taxable basis is the amount of the vehicle
Annual circulation tax for 2017 Approx. USD$ a) Until USD $ 15.000 1,5% b) Between USD $ 15.000- 33.000 2,5% c) Above USD $ 33.000 3,5%
Annual | ||||||||||||
| 2. Income taxes | |
| ü | |
| Taxable event
Taxable person
Tax due
Taxable period | The income tax and its supplementary tax – the capital gains tax – are treated as a single tax. The income tax is a charge on the profits or earnings that taxpayers make in the normal course of business – to the extent these “profits” or “earnings” are income that is capable of increasing the taxpayer’s net assets. For its part, the capital gains tax is a charge on certain special transactions that taxpayers carry out outside their normal course of business.
Individuals or Companies who are not excluded from income tax.
The income tax rate is 33% for taxable year 2018 plus a surcharge (only for 2018) of 4% depending of the level of taxable income.
Capital Gains Taxes 10%.
Annual. |
| 3. VAT | |
| 3.1. Deduction | |
| ü | |
| Taxable event
Taxable person
Tax due
Taxable period | The VAT will be deductible in full if it is a capital asset (asset used for the general business activities), otherwise it will be deductible via depreciation if it corresponds to a fixed asset (asset used in view of rendering services with it).
Who complete activities taxable with VAT
The general VAT rate is 19%.
Bimonthly: Gross income higher than approx. USD$ 100.000. It also includes for the operations initiators, the exporters, and exempt transactions (Zero rate).
Quarterly: Gross income less than approx. USD $ 100.000. |
| 3.2. Hire purchase | |
| ü 19% Rate | |
| 3.3. Leasing | |
| ü 19% Rate | |
| 4. Company car | |
| 4.1. VAT due on private use of company cars | |
| Taxable event
| N/A |
| 4.2. Company car in personal tax returns – benefit in kind | |
| ü In case of recurring private use, a tax revenue would be considered for income tax purposes. Additionally, if the benefit exceeds 40% of the labor income, it would also become the basis for payroll taxes and social security contributions. | |
| 5. Income taxes – drivers’ personal taxation | |
| 5.1. Private car in the personal tax return | |
| 5.1.1. Private use | |
| ü N/A | |
| 5.1.2. Commuter traffic | |
| ü Does not apply. | |
| 5.1.3. Business kilometres | |
| ü Does not apply. | |
| 6. Special schemes (if any) | |
| National Consumption Tax at 8% rate: (Art. 512-3 of the Tax Statute)
| |
| 7. Electric vehicles | |
| ü 5% VAT rate for goods of tariff heading 87.02 ü Electric motor vehicles for the transport of 10 or more persons, including the driver, for public transport only. (Article 468-1 of the Tax Statute) | |
| 8. Future developments | |
| ü None | |
Source: BDO (2018)
4.1 Car registration
- Every buyer must be registered with the RUNT system (National transit register system).
- Tax payment on motor vehicles, has three levels depending on the range of purchase price 1.5%, 2.5% and 3.5%. More expensive cars pay more tax.
- SOAT purchase (Traffic Accident Insurance) is a mandatory accident insurance.
4.2 Car Taxation
- All new car sales are taxed at the time of invoicing with VAT, currently at 19%. This VAT can’t be deducted, it is part of the value.
4.3 Motor vehicle tax
| Private vehicles | Valuation ranges (in COP) | Rate |
| All cars, jeeps, vans, station wagons, freight vehicles and passenger | Up to $43,953,000 | 1.5% |
| Between $43,953,000 and $98,993,000 | 2.5% | |
| Over $98,893,000 | 3.5% |
4.4 Direct taxation – taxable persons
Company cars can also be used for personal use. Having a company car doesn’t affect the user’s income tax, and the company that owns the car can deduct it 100%.>
4.5 VAT
- The general VAT rate is 19%. However, certain services and goods are taxed at 5% and 0%.
4.7 Company car
Vehicles can depreciate completely in the normal estimated useful life that is 10 years. A company car can be deducted by the company as an expense if the company can prove that it is needed for the use of the company.
4.8 Income taxes – drivers’ personal taxation
- The income tax rate is 34%
4.9 Electric vehicles
- Electric vehicles are tax free and duty free in Colombia and have a 5% VAT
4.10 Future developments
4.11 Legal background (import taxes)
- Car import rate is up to 35%, but Colombia has Free Trade agreements with Venezuela, Ecuador, Bolivia, Mexico, the United States, the European Union and Korea. These FTAs bring these taxes to 0%.
Source: SEPA Consultants (2018)
Chapter 5: Car policies
The title of the car rests with its owner. Therefore, if the vehicle is leased, its title and property belongs to the leasing company.
The sector that provides one of the largest numbers of fleet vehicles is the pharmaceutical industry.
General Manager and Sales Representative frequently benefit from company cars.
Reference cars:
- Entry/junior sales level: Chevrolet Sail, Spark, Renault Logan
- Senior sales/management level: Mazda 3, Ford Fiesta
- Executive level: Toyota Fortuner, Ford Explorer
