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Way too complicated issue to discuss here and has already been discussed extensively in many previous posts.over the last few years.

Ohh..changes..supposedly the new reforma pensionada allows zero taxation on actual legitimate pensions to a very high value..like $8000 or $9000   a month

But it has to be acreal.pension from a third party legit government  or corporation..not a small trust or small corporation where you or family or friends hold shares

My biggest disappointment with Colombia's tax system is the wealth tax. Per my understanding it applies to US-based retirement and tax exempt accounts (IRA, 401k, HSA, etc).

This is a tax on world-wide assets at the current, unrealized market value. Profits have not been realized, and after paying the tax, values could go down. If I'm pre-retirement age, I can't sell off these assets (without substantial penalty) to pay the tax. This can be a deal-breaker for becoming a tax resident; I know it is in my case.

The wealth tax is progressive and applies as follows for fiscal years 2023 to 2026, per Law 2277 of 2022:

1. 0.5% on net wealth exceeding 72,000 UVT (approx. USD 860,000) up to 122,000 UVT (approx. USD 1,463,000).
2. 1.0% on net wealth exceeding 122,000 UVT (approx. USD 1,463,000) up to 239,000 UVT (approx. USD 2,868,000).
3. 1.5% on net wealth exceeding 239,000 UVT (approx. USD 2,868,000).

@mattmax

I know lots of guys with money  here in Colombia  and bobody declares their overseas assets...and none.or very ,very few.report their total overseas   income

Just some naive old guy  guy on anither forum, and even though hs presented this info. ( his global net.worth listing all assets) to DIAN and theotically owes the taxes, they have never tried to collect it This is according.to one of his posts.

Guys I know personally dont give DIAN a list.of their.world wide.assets

Its non of their business,it would  be insane to tell.them , and even though they might theoretically  be able to get this through CRS data  they are a  long   long wsy from having the sophisticaton, staff, ambition  and desire to do so.

@nico peligro

I hear you, and I'm sure yours is the prevailing opinion. At the same time, I think people are naive to information sharing that goes on, and how easy it would be for a government to pull the info, even with limited 'human' resources. Investments sitting in Vanguard IRA accounts is about as easy as it gets. At the same time, I understand that dividends and cap gains within retirement accounts are excluded, so not consistent treatment.

The other consideration is assets held in Colombia at risk of confiscation. If one owns a house, CDTs etc, then all that can be immediately frozen. If there are no assets in Colombia, then little to lose. Everyone's situation and risk tolerance will be different.

I'll stand by my opinion that 'wealth tax' is blatant money skimming by the government, because it is not tied to any transaction or gain. The gains are not realized until investments are sold and money distributed.

@mattmax

It is not really that easy for DIAN to get this personal financial  information. I personally know an IT guy in Bogota who worked on contract for DIAN and he told me going.through the CRS system ( which is the only way they can legally  get the information you are talking about). is way too difficult for them  thats why they resort to lame , low effort tactics like getting the  banks ( only BancoColombia is doing this far is I know) to inform them of anyone transferring more than 50 million pesos  a year into a Colombian account. DiAN then sends them a form letter email saying they have been informed that they have made such deposits through a "third party" source  and the account holder MIGHT have to do a Declaración  de Renta.

The form letter then ends with a caveat

" if you feel that this situation does not apply to you ( for whatever reason, there are many possibilities), please disregard this email"

Like I said, I know lots of rich people , expats and locals living in Colombia, some with net wort of 10 million or more  and nobody pays orvhas paid the wealth tax.

And it has been a requirement for decades. The only recent change by the Petro regime has been to lower the.threshold by quite a bit.

Do you know anyone personally who has ever paid the wealth tax?

At the end of the day can change the laws and embargo your house and bank account ( depending on how much you have in it..by law they have to leave 30 salarios minimos for you to survive) for any reason if they want. This usually ends up going through the courts, takes a long time before.the can actually.sieze  assets, allthough the liens/ embargo can happen pretty quickly sometimes.I know how this works from.personal and second hand experience.

Thats why its better not to invest more in Colombia than you are willing to lose.

We are in agreement on that part.