Colombia's Simple Tax Regime and Service Exports

Most searches for Colombia's Simple Tax Regime, the Régimen Simple de Tributación or RST, come from individuals and micro-businesses with no international operation, asking whether the regime suits them. This guide is not that guide. It is written for a foreign company that hires or pays a Colombian provider registered under the RST, and wants to understand what that registration implies for invoicing, VAT and withholding. If you run a Colombian business without foreign clients, the DIAN's general RST guidance answers your question better.

In Soulbit Academy, we already covered what it means for a Colombian company to invoice in dollars from Colombia. This guide extends that angle to the RST: how a provider's foreign revenue counts toward the income cap, how the VAT exemption for exported services interacts with the regime, the bimonthly advance payment, and what withholding a foreign payer does and does not owe.

What Colombia's Simple Tax Regime is, and why it matters to a foreign payer

Colombia's Simple Tax Regime is an optional unified tax that replaces the income tax return and the consolidated municipal business tax with a single filing, at a fixed rate set by activity group and income level, under article 903 of the Tax Statute. A natural person running a business, or a legal entity whose partners are natural persons resident in Colombia, can opt into the RST as long as it meets the income cap in article 905.

The RST does not create a separate tax for exported services, and it does not change Colombia's foreign exchange or customs rules. It simplifies income tax and the municipal business tax, but two obligations stay outside that simplification, and both matter to a foreign company paying a Colombian provider: VAT, and in some cases, the income cap that applies depending on the provider's activity.

The tax rate under the RST varies by activity group and income level, under a progressive table set by article 908 of the Tax Statute. Law 2277 of 2022 reorganized those groups, so a foreign company evaluating a provider's tax status should treat the exact rate as something to confirm with the provider's accountant, not as a fixed figure.

For a foreign company, a provider's RST registration is a rough signal, not a guarantee, of size and administrative maturity. It tells you the provider's prior-year income sat under the cap in article 905, and that the provider files on the fixed bimonthly schedule described below, but it says nothing about VAT status or about how the provider treats income from your contract specifically.

How a provider's foreign revenue counts toward the RST income cap

Revenue a Colombian provider bills to a foreign client counts toward the RST income cap alongside domestic revenue. Article 905 of the Tax Statute refers to gross ordinary or extraordinary income from the prior tax year without distinguishing where it originates, so export revenue does not fall outside the calculation.

The general cap is 100,000 UVT, about 5,237,400,000 COP at the 2026 UVT value the DIAN set at 52,374 COP. This matters for a foreign company that relies on a fast-growing Colombian provider: a strong year of dollar billings can push that provider close to the cap even if its domestic activity stays flat, which can force a change in tax regime and invoicing practice the following year. Article 905 also requires a provider to consolidate income across related businesses when a shareholder holds a stake in other companies also registered under the RST, so a group of affiliated providers cannot each claim the cap separately.

Does a Colombian provider that exports professional consulting hit the general 100,000 UVT cap?

The applicable cap depends on how much of the provider's income comes from intellectual, as opposed to material, work. Article 905 sets a lower cap, 12,000 UVT, about 628,488,000 COP at the 2026 UVT value, for providers whose income comes mainly from professional consulting or scientific services, a category that covers much of what Colombia treats as liberal professions. A software development or technical consulting provider exporting that kind of service should confirm with its accountant which cap applies before either party assumes the general one.

Activity type	Gross income cap	COP equivalent, 2026 UVT
General activities under the RST (trade, industry, services without a predominant intellectual component)	100,000 UVT, prior tax year	5,237,400,000 COP
Professional consulting or scientific services with a predominant intellectual component, including liberal professions	12,000 UVT, prior tax year	628,488,000 COP

RST and the VAT exemption on exported services

VAT stays outside the RST's unified tax: a Colombian provider registered under the RST still files and pays VAT separately, exactly as it would under the ordinary regime. Registering under the RST does not, by itself, grant any additional VAT benefit.

The VAT exemption for exported services runs on an independent track, article 481 of the Tax Statute, and applies equally under the RST and the ordinary regime. It requires the service to be rendered in Colombia and used exclusively abroad, and the provider to be registered with the DIAN as a service exporter. The DIAN specified in 2024 that meeting this requirement takes several RUT registrations at once, including VAT-responsible status, producer of exempt goods or services, and customs user, plus the specific exporter and service-export codes under Decree 1080 of 2015. No single one of those registrations is enough on its own; the exemption depends on the full set and on documented compliance with each operation's substantive conditions.

A foreign company should not assume a Colombian provider under the RST is automatically VAT-free on the invoice it receives. Whether VAT applies depends on the provider's own article 481 registration and documentation, not on the provider's tax regime.

Failing to register correctly as a service exporter in the RUT is the most common reason a provider loses the exemption, even when the underlying operation meets the substantive conditions of article 481. The DIAN has clarified the formal requirements more than once in recent years, which suggests the registration step still confuses providers exporting services for the first time.

The bimonthly advance payment and the annual return

The bimonthly advance payment is a mandatory filing every RST taxpayer submits every two months through the electronic SIMPLE receipt, regardless of whether a balance is due for that period. Article 910 of the Tax Statute treats it as a prepayment of the unified tax, calculated on the bimonthly period's income at the rate the provider's activity group carries under article 908.

That advance payment is credited against the annual consolidated return, filed within the deadlines the national government sets. For a foreign company that pays a Colombian provider on an irregular schedule, this means a large invoice concentrated in one bimonthly period can generate a high advance payment for the provider in that specific cycle, even if the year's average stays within what the provider expected.

This bimonthly cadence gives a foreign payer a practical reason to spread large payments across periods rather than concentrate a year's contract value in a single invoice, when the schedule allows it. A provider under the RST closes its foreign-revenue figures every two months, not only at year end, so payment timing has a direct effect on its cash flow around each SIMPLE filing.

Withholding: what a foreign payer does and does not owe

A foreign company paying a Colombian provider under the RST does not withhold Colombian tax, because it is not a withholding agent under Colombian law. The RST itself reinforces this for domestic transactions: article 911 of the Tax Statute generally exempts RST taxpayers from Colombian income tax withholding, with narrow exceptions such as payroll and financial returns.

Does a US company need to collect a W-8BEN-type form from a Colombian RST provider?

A US payer typically requests a form under US, not Colombian, rules to document the provider's foreign status for its own tax reporting. We already covered that flow in the guide to the W-8BEN form for LATAM contractors working with US clients. That requirement exists independently of whether the Colombian provider is under the RST or the ordinary regime, since it addresses the payer's own reporting obligation, not the provider's Colombian tax status.

This is separate from the withholding a Colombian company applies when it pays a foreign supplier, which runs in the opposite direction and does not apply when the payer is abroad. A foreign company reviewing a Colombian provider's invoice should not expect a Colombian retefuente line item on a payment it originates from outside the country.

RST versus Colombia's ordinary regime, and what it signals about a provider

A Colombian provider under the RST usually has income well below the cap and a stable, predictable revenue base, since the regime's fixed bimonthly schedule fits a business with steady cash flow. A provider close to the cap, or with income that swings sharply by season, tends to sit in the ordinary regime instead, where the advance payment is calculated once a year inside the return rather than every two months.

Neither regime tells a foreign company anything about a provider's solvency or delivery reliability on its own. Both are useful context for a treasury team assessing counterparty risk on a new Colombian supplier, alongside references, contract history and the payment method the provider proposes.

Aspect	RST	Ordinary regime
Taxes it unifies	Income tax and the consolidated municipal business tax in one filing; VAT is filed separately	Income tax, the municipal business tax and other taxes are filed and paid separately
How the tax is paid	Mandatory bimonthly advance via the electronic SIMPLE receipt, credited against the annual return	Income tax advance calculated inside the annual return itself, with no fixed bimonthly filings
Income cap to belong	100,000 UVT, or 12,000 UVT when consulting income predominates	No income cap
VAT on exported services	Filed separately; the article 481 exemption applies the same way as under the ordinary regime	Filed separately; the article 481 exemption applies under the same conditions

What Soulbit resolves, and what stays the company's responsibility

Soulbit is not a tax advisor, does not register a provider under Colombia's RST, and does not file the bimonthly advance payment or the annual return on anyone's behalf. Determining the applicable income cap, verifying the article 481 VAT exemption and filing the SIMPLE receipt remain obligations of the Colombian taxpayer and its accountant.

What Soulbit's V1 resolves is the operational layer of paying or collecting internationally: a KYB-verified company can send or receive a payment through a payment link or a collection QR code, with institutional custody of USDC or USDT balances and local bank rail disbursement in Colombia. The transaction is recorded on-chain, which helps a Colombian provider's accountant document the date, amount and counterparty when reviewing whether that revenue affects the RST cap or the VAT exemption, but it does not replace that tax analysis. The full product picture is in what Soulbit is and how it works.