Colombia requires Upwork to collect value-added tax, or VAT, and remit the tax to the government of Colombia if we do not have a valid VAT ID on file for you. VAT is a tax on goods or services, including our services to you, and remit means to send money for a payment.
Examples of services that VAT applies to in Colombia
- Marketplace fee, contract initiation fee, conversion fee, and recruiter fee
When we charge tax, it’s because your government requires us to, which means this tax may change or apply to additional services in the future.
In Colombia, the VAT rate is 19% of the cost of the service being taxed. For example, if you pay $100 USD in client marketplace fees, you will pay $19 in tax, for a total of $119.
You’ll see the estimated amount of tax when you check out and on your invoices and Transaction History.
If you provide a valid VAT ID to Upwork, we will not have to collect this tax from you. You can enter or edit your VAT ID in your account’s Settings > Tax Information.
We’ll check whether the VAT ID you provide is valid and email you when we have confirmed it is valid, which usually happens right away. We’ll also email you to let you know if we are unable to validate your ID or if there is a delay.
We will display the VAT ID you provide to us on your invoices, even if the ID is not validated. You will need to update your VAT ID to change what displays on your invoice.
Your Colombia VAT ID number is different from your tax identification number. It is a unique ID that you may request from your government by registering for VAT in Colombia. Your VAT ID may have 9 or 10 alphanumeric characters, depending on whether you are an individual or a business. It starts with a number and can end with a letter and looks like this, for example, 01234567A or 012345678A.
To learn more, visit the Colombia tax authority’s website.
Colombia does not offer any applicable exemptions from VAT, but you can avoid VAT charges by providing a valid VAT ID.
Location and information changes
If you change locations and update this information in your account by visiting Settings › My Info › Company Contacts, we will automatically adjust your VAT to correspond with the rates in your new country of residence or stop collecting if there is no VAT, or a similar tax, in your new country.
However, you may have to revalidate your VAT ID when you change locations.
You may also have to revalidate your VAT ID if you make other changes to your information, such as changing your legal name.
This article is for general information only and should not be considered tax advice. It may not be updated in real time and may not reflect recent changes. We strongly encourage you to consult your country’s tax authority or your tax advisor with questions related to your specific situation.
Frequently Asked Questions
Colombia’s VAT applies to services we provide to both freelancers and clients if they reside, have a permanent address, or are established in Colombia and have not provided us with a valid VAT ID.
We’re required to comply with the tax laws of the countries where we operate to continue to do business in those countries. Colombia requires that we collect VAT on Upwork services and remit them to your government unless we have a valid VAT ID on file for you.
No, if you provide a valid VAT ID, we do not have to collect and remit VAT tax for you. To enter your VAT ID, go to your account’s Settings > Tax Information.
Yes, we are required to have a VAT ID on file for you. If you do not provide a valid VAT ID, we are required to charge you VAT and remit it to the Colombia government.
If you provide a valid VAT ID, we will not be required to collect the tax. To enter your VAT ID, go to your account’s Settings > Tax Information.
We are still required to collect VAT even if you are only residing in Colombia temporarily. If you move to another country, you can update your information in your account’s Settings › My Info › Company Contacts. We will automatically adjust your VAT to correspond with the rates in your new country of residence or stop collecting if there is no VAT, or a similar tax, in your new country.
No, we remit that money directly to the Colombia government and will not be able to refund it. You may be able to claim a credit with your tax authority for what you paid. We recommend that you consult with your government’s tax authority or your tax advisor for more information.