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In brief

Law 2068, which modifies the general tourism regime in Colombia, was published on 31 December 2020. The law’s main objectives are to promote sustainability; implement mechanisms for the conservation, protection and use of different tourist attractions; increase competitiveness; and promote the recovery of Colombian tourism through the creation of different incentives.

In detail

Law 2068 of 2020, “by which the General Tourism Law is modified and other provisions are established,” was issued and published in December 2020. This law principally modifies the existing regulation on tourism and establishes several provisions to promote and strengthen the sector.

These are some of the modifications introduced by this law:

Tourism contribution (contribución parafiscal de turismo)

  1. The purpose of the contribution is the promotion, sustainability and competitiveness of the tourism sector in Colombia. For the effective implementation of the law, the Ministry of Commerce will regulate the collection, filling and payment of the contribution.
  2. The following are obliged to pay the tourism contribution to the National Fund of Tourism:
    1. Tourism service providers.
    2. Owners or operators of the establishments that benefit from the tourism sector, such as:
      1. therapeutic centers or spas that use mineral-medicinal waters, thermal treatments or other natural physical means for therapeutic purposes
      2. providers of nature or adventure tourism activities, such as diving, climbing and boating, among others.
      3. providers of passenger transportation services, except for urban transport services and those that operate within metropolitan areas
  3. According to the law, legal entities that rent more than one property, which they own or that a third parties own, for less than 30 days are considered tourism service providers. Moreover, they are considered accommodation providers (proveedores de vivienda turistica) when they are engaged in intermediation between lessors and lessees.
  4. The rate of the contribution is 0.25% (2.5 x 1,000) on operating income.
  5. The taxable base for the contribution will be the amount of the operating income obtained by the taxpayer derived from the activity subject to tax, except for the exceptions that the law establishes, among which are the following:
    1. For those whose main remuneration is a commission or percentage of sale, the taxable base is the value of the commissions received. For wholesalers and agencies engaged in incoming tourism (agencias operadoras de turismo receptivo), the operational income is the one that remains once the payments to the tourism services providers have been deducted.
    2. For digital platforms of tourist services, the taxable base for the contribution is the operational income derived from commissions, remunerations or users fees. Law 2068 also introduced other obligations and requirements for digital platforms, who have 12 months counting as of the entry into force of the law to meet these new conditions.

Regarding the 9% rate for income tax

Among the modifications that were introduced to paragraph 5 of article 240 of the Colombian Tax Code, the following stand out:

  1. Law 2068 establishes that, as a general rule, the services provided in new hotels that are built, remodeled and/or expanded, “in municipalities with two hundred thousand inhabitants or more, as certified by the competent authority as of December 2018, within six (6) years following the entry into force of this law, for a term of ten (10) years” may apply a 9% income tax rate. In the case of remodeling and/or expansion, the value of the said work cannot be less than 50% of the value of the acquisition of the property.
  2. Likewise, new amusement parks, eco parks and agrotourism projects may apply this special income tax rate, as well as new nautical piers “that are built in municipalities with up to two hundred thousand inhabitants, as certified by the competent authority as of December 31, 2018, within ten (10) years following the entry into force of this law, for a term of twenty (20) years.”

Other relevant modifications

  1. Until 31 December 2022, “passenger air tickets, related services and the administrative fee associated with their marketing” will be subject to a reduced VAT rate of 5%.
  2. Until 31 December 2021, hotel and tourism services for purchases in Colombia or for residents in the country will be VAT exempt. This exemption includes “tourism for meetings, congresses, conventions and exhibitions and training.” It should be noted that this exemption is only applicable to those who: (i) have an active registration in the National Tourism Registry; (ii) pay the tourism contribution; and (iii) provide tourism services as stated in the law.
  3. From the entry into force of the law until 31 December 2021, a reduction to 0% is established for the rate of the national consumption tax in the sale of beverages and meals in restaurants, bars and similar establishments.

For further information, please do not hesitate to contact us.

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Ciro is a lawyer graduated from Pontificia Universidad Javeriana and a specialist in Tax Law from Universidad del Rosario. In 2006 he obtained a LL.M. degree in International and Comparative Law from Tulane University in New Orleans, LA, USA.
Over almost 20 years, he has advised companies in the oil and gas, pharmaceutical, technology, mass consumption and mining sectors, on matters related to tax planning and consulting, and litigation. From 2006 to 2010, he worked as a tax manager at Deloitte Colombia. Prior to this, he served as associate for two firms focused on tax and international trade. He has also been a professor of tax law courses at Pontificia Universidad Javeriana, Universidad Externado de Colombia and Universidad ICESI.
Ciro joined Baker McKenzie in 2010, and since 2014 he heads the Firm's Tax practice group in Bogotá.