Buying a car in Colombia entails a series of expenses that must be taken into account. Taxes are only a part of these, and some are even paid before you start the engine and start enjoying your new car.

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Among these are the consumption tax and VAT. Which in some cases can reach 49 percent of the value of the vehicle. The private car for governments, especially those of this part of the world, is a luxury item or a luxury good.

And if it’s any consolation to you, Cars in Colombia are not that expensive compared to other countries in the region such as Argentina or Ecuadorwhere the super tax charge 50 percent of its value in the showcase.

The tax burden for new vehicles depends on the country of origin, the tariffs that are associated with the import tax that is directly linked to trade agreements and free trade agreements, FOB (Free On Board) value, that is, what it costs a merchandise, in this case the car, in port.

According to Colombian tax regulations, all vehicles invoiced in the country pay VAT (Value Added Tax) of 19 percent. In passenger vehicles, SUVs and pick-ups, an 8 percent consumption tax is added. This increases to 16 percent if its cost is greater than $30,000 FOB.


Óscar Berrocal / EL TIEMPO

This threshold of US$30,000 has been in force since 2007 and has become a problem because cars have become more expensive due to many factors, so what brands do is remove accessories and key safety elements so as not to exceed that limit and thus the vehicle does not represent more money to the customer.

The tax burden does not escape technology, hybrids pay five percent VAT and the same consumption tax depending on the FOB value, 8 or 16 percent. The electric ones pay five percent VAT and do not pay consumption tax.

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And here the tariff once again plays a key role, which, as we said, is associated with trade agreements or free trade agreements, since the benefits depend on that. At present, zero tariffs are paid for vehicles coming from Mexico, the United States, Canada, Europe, with Mercosur and some countries of the Andean Community of Nations.

The latter are subject to quotas, under an economic complementation agreement, through which a quota system was established to import vehicles from Argentina and Brazil with zero tariffs. With Argentina, 18,000 commercial vehicles and 30,000 passengers. With Brazil, depending on the Regional VCR Value Content, the entry of 50,000 units is allowed (45,000 with a 60 percent VCR and 5,000 with a 35 percent VCR). The VCR is the amount of components or auto parts produced locally. Vehicles of origin in countries with which Colombia does not have a trade agreement, such as India or Japan, pay a 35 percent tariff.

New car sales continue to decline.

China and Japan, the first very strong in electric vehicles; and the second in hybrids that do not receive benefits, they benefit somewhat from a decree that establishes that electric vehicles do not pay tariffs and hybrids pay five, as well as the five percent VAT.

The problem here is that the importation of hybrids is subject to quotas (quota), which were set by decree and increased from next year to only 3,000 units.

LIt is true that once you pay for your new car, credit or cash, the state will keep on average almost half of your money via taxes and duties. The final price also depends on a very important variable, the price of the dollar, which, given its instability, plays a key role.

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other taxes

Before putting first gear and starting to enjoy the ‘smell of new’, you have to pay the registration fees, mandatory traffic accident insurance, Soat, and the vehicle tax, which is assessed according to the commercial appraisal of the Ministry of Transport. .

To calculate said annual tax, parameters such as the type of vehicle are taken into account; specifications such as make, line, year/model, and payload capacity.

The rate is based on price ranges that determine the value to pay.

depending on the appraisal, percentages of 1.5, 2.5 and 3.5 percent are applied. In addition, in some cities traffic light rights are paid and in Bogotá this year an additional contribution must be made to finance the creation of the Bogotá-Cundinamarca metropolitan region.

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