Tax benefits for nonprofit donors in Colombia
COLCES Editorial
The legal framework for donations in Colombia
Colombia has a tax system that incentivizes donations to nonprofit entities through tax deductions. The Tax Code, in articles 125 through 125-5 and article 257, establishes the conditions for individual and corporate donors to obtain benefits when contributing to the social sector.
Following the 2022 tax reform, transparency mechanisms were strengthened and some processes simplified, making private social investment more attractive.
Who can receive tax-beneficial donations?
Not all nonprofits generate tax benefits for their donors. Only those qualified under the Special Tax Regime (RTE) that comply with update and publicity requirements can issue donation certificates valid for tax purposes.
- Foundations, associations, and corporations under the Special Tax Regime
- Solidarity sector entities (cooperatives, employee funds)
- Higher education institutions approved by ICFES
- Entities developing science, technology, and innovation projects approved by MinCiencias
Benefits for businesses
Companies that make donations to nonprofits under the Special Tax Regime can obtain a 25% discount on the donated amount from their income tax. This means that for every COP 100,000 donated, the company receives a COP 25,000 discount on its tax return.
“Donations are not just an act of generosity; they are a smart social responsibility strategy that generates real tax benefits for companies committed to the country's development.
Additionally, donations to science, technology, and innovation projects can generate a 25% income tax discount plus a 100% deduction of the donated amount, creating an even more powerful incentive.
