Colombia Leads Latin America with Highest Corporate Tax Rate
Colombia stands out in Latin America with its corporate income tax rate of 35%, the highest in the region. This rate presents significant challenges for both domestic startups and foreign companies considering establishing operations in Colombia.
Taxes serve as a fundamental mechanism for state function and maintenance, with personal and corporate income taxes being particularly crucial across the region.
According to PwC data, Colombia shares the top spot for corporate tax rates in Latin America with Argentina, both at 35%. Brazil and Venezuela follow closely with rates of 34%.
Globally, among the 38 OECD member economies, Colombia also ranks highest, surpassing European nations like Portugal and Germany, which have rates of 30%.
This high tax rate poses obstacles for new Colombian businesses and foreign enterprises looking to enter the market. While local companies pay taxes on global income, foreign entities operating in Colombia are taxed only on their Colombian earnings.
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