Expat Community > Colombia

fecherklyn
Joined 2015
Posts: 1459

How does the Colombian GMF work?

1 year ago

Elexpatriado recently stated “You only get 4 in 1000 charge if you have a large balance in an account, it doesn’t matter how many accounts you have. Only been charged once in 2 years”. (Source: Tammytravels “Stuck opening bank account” dated 7/11/2023 14:35 EST.

This remark suggested to me that many, or most, forum members misunderstand the nature and application of the Colombian gravamen a los movimientos financieros (GMF). I am not an expert, but this is how I see it:

The GMF is an enticing tax collection vehicle for governments trying to balance their budgets in a manner that suggest to its population the higher income sector is contributing an equitable portion that takes into account its favourable financial capacity. Thus, if the more you spend is a reliable manner in which to target those most able to pay taxes, then the GMF is made to measure.

In short, the GMF will NOT apply UNLESS you monthly banking payments exceed a specified level. This tax collection measure is very popular in L.A. and is starting to be increasingly applied elsewhere.

The Colombian exemption from GMF only applies once a person’s bank payments exceed 350 UVT (*) per month.

(*) is Nov 18, 2022 — La Unidad de Valor Tributario (UVT), que estará vigente para el 2023 será de $42.412, informó este viernes el director de la Dian.

Thus, the exemption limit is COP 14,844,200 per month, and above this, your bank payments will individually attract a “4 per mille” tax that will be immediately deducted from your Colombian bank account.

Incidentally, the “exemption” limit is not applied automatically – you have to ask for it. If you think your monthly bank debits are likely to exceed COP 15 million, then you should contact your bank and ask them to apply it.

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SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
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SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
Learn More

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How does the Colombian GMF work?

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