Converting cryptocurrency to pesos in Colombia can have tax implications and bring transactions under the scrutiny of the country’s tax authority, the Dian. While not legal tender, crypto assets are considered intangible assets forming part of an individual’s wealth and can generate taxable income, according to the Dian’s Unified Concept No. 18075 of 2023. Colombian tax residents must declare any crypto assets held as of December 31.
Trading and Withdrawing in USDT
Withdrawing trading profits in USDT does not automatically classify the income as crypto-related. For example, gains from trading through a broker may be paid out in USDT instead of dollars or pesos. The Dian clarifies that the nature and source of the income depend on the original transaction, not the withdrawal method.
The Concept No. 18075 recognizes that crypto assets can function as a payment method, with their transfer potentially constituting payment in kind. To determine tax liability, one must first identify the transaction that generated the profit, followed by analyzing the tax implications when USDT is sold, exchanged, or converted to pesos.
Tax Residency and Crypto Transactions
Using a crypto exchange platform does not automatically classify income as Colombian-sourced. According to the Concept No. 18075, selling a crypto asset may generate domestic income if it is deemed to be economically exploited in Colombia. Indicators of such exploitation include converting the asset into legal tender or using it to purchase goods or services within the country.
This distinction is particularly relevant for non-residents, who are generally subject to Colombian income tax only on domestic-sourced income. Monetizing or using crypto assets in Colombia can thus trigger tax obligations there. However, transactions conducted via a Colombian platform do not inherently constitute domestic-sourced income.
VAT and Future Regulations
Crypto asset sales generally do not incur VAT, as per the Concept No. 18075, unless the intangible asset is linked to industrial property. Intermediation services are treated differently. Starting in 2026, increased traceability measures will take effect, as outlined in Dian Resolution No. 000240 of 2025. These measures include reporting and due diligence requirements for crypto service providers under the Crypto Asset Reporting Framework (CARF).
Additionally, the Dian Concept No. 3546 of 2026 requires entities subject to exogenous information reporting to declare crypto-related income in Form 1007, asset purchases in Form 1001, and the value of crypto investments as of December 31 in Form 1012. Transactions conducted via digital wallets or platforms are not exempt from tax scrutiny, with a growing emphasis on tracing income origins, fiscal costs, conversions, and fund destinations.
