Remote People supports the reimbursement of business-related expenses in Colombia, provided they comply with Colombian tax regulations, DIAN* invoicing rules, and internal company policies. This guide outlines the documentation, timelines, and compliance requirements for tax-deductible and reimbursable expenses. To ensure proper reimbursement and compliance, employees must follow these steps when handling business-related expenses:
*Dirección de Impuestos y Aduanas Nacionales; it's Colombia's national tax and customs authority.
Invoicing & Documentation Requirements
To ensure expenses are tax-deductible and non-taxable for employees, the following documentation rules apply:
All invoices must be issued in the name of Horizonte Recursos Humanos Colombia S.A.S., with NIT 901.694.054.
Ensure to include:
Date of Transaction
Transaction Description: a clear description of what was purchased or what service was received (e.g., "hotel 2 nights", "flight ticket Bogotá–Miami", "office supplies")
Individual Amount per Receipt and Tax Information: each receipt must show its own value. Submitting only a combined total in the expense report is not sufficient — amounts must match receipt by receipt.
Vendor Information: the full name or legal name of the seller or service provider. This is required to report accurately to the DIAN — without it, the expense cannot be properly recorded.
Consistency Between the Expense Report and Receipts: the total declared in the expense file (Excel) must match exactly the sum of the attached supporting documents (PDFs). Discrepancies between the two will delay processing and may result in non-reimbursement.
For legal entities, invoices must comply with Article 617 of the Tax Statute and DIAN Resolution 000042 of 2020.
For non-VAT suppliers, a collection account addressed to HRH Colombia is required.
For foreign suppliers, invoices should be issued to HRH Colombia if possible.
All expenses must be supported by an invoice, regardless of amount.
Depending on the tax regime and invoice value, withholding tax may apply, and HRH Colombia is responsible for applying it correctly. If not withheld, the expense may be considered non-deductible, increasing the company's taxable base.
Reimbursement & Taxability
Per diems (viáticos) are tax-free up to the limits set by Decree 1625 of 2016. Amounts exceeding these limits are taxable.
Client entertainment and gifts may be deductible if:
They are directly related to commercial activity.
Proper documentation is provided.
They comply with Article 107-1 of the Tax Statute.
Employee benefits (e.g., year-end parties) may be deductible with limits. Recurring benefits must be processed through payroll and are considered taxable income.
Health and wellness expenses (e.g., gym, yoga, therapy) are generally taxable unless legally mandated (e.g., occupational health programs). Taxable benefits must be processed through payroll.
VAT and Compliance Considerations
VAT applies to most goods and services in Colombia. Reimbursable expenses must include valid invoices to allow for VAT deduction.
All expenses must comply with DIAN's electronic invoicing and acceptance rules.
Payments to foreign vendors require:
Withholding tax compliance
Currency exchange documentation under Banco de la República regulations
If proper documentation is not provided, HRH Colombia must treat the expense as non-deductible, increasing the taxable base for income tax.
Eligible Expense Categories
Reimbursable expenses must be directly related to business activities and supported by valid documentation. Common categories include:
Travel and accommodation costs
Meals during business travel
Tolls and fuel (with proper invoice)
Office supplies
Client meeting expenses
Travel & Mileage Reimbursement
Mileage reimbursement is not regulated by Colombian tax law. Companies typically set an internal rate. The national public transport rate may be used as a benchmark.
Toll expenses are reimbursable with receipts and must be reported as separate expenses, not part of the mileage log.
Parking tickets for traffic violations are not reimbursable.
Travel expenses (air, bus, train, taxi, rental cars) are reimbursable when directly related to business purposes and supported by valid invoices.
There are no legal caps on travel expenses, but companies may set internal limits. All travel-related expenses must be supported by invoices from registered service providers to be deductible.
Best Practices
Always obtain and submit valid electronic invoices.
Ensure expenses are reasonable, business-related, and properly approved.
Submit expenses promptly to avoid delays in payroll processing, attaching receipts and invoices, through the Remote People platform.
Ensure every supporting document clearly shows the vendor's full name, a description of the purchase or service, and the individual amount for that receipt. This information is required to fulfill Colombia's DIAN reporting obligations.
Double-check that the total in your expense report (Excel) matches the sum of all attached receipts before submitting. Mismatches between the declared total and the supporting documents will require correction before reimbursement can be processed.