ICA — Industria y Comercio Tax in Colombia
Municipal tax on commercial, industrial, and service activities. Rates vary by city and business type. Our tax lawyers in Medellín help you comply with local tax obligations.
Contact UsICA — Industria y Comercio Tax in Colombia
The ICA (Impuesto de Industria y Comercio) is a municipal tax levied on businesses conducting commercial, industrial, or service activities within a Colombian municipality. Unlike national taxes administered by the DIAN, ICA is administered by each municipality's tax authority — in Medellín, this is the Secretaría de Hacienda del Municipio de Medellín. The tax base is the taxpayer's gross revenue (ingresos brutos) generated from activities within the municipality, and rates vary depending on both the municipality and the specific economic activity, typically ranging from 2 to 10 per thousand (0.2% to 1.0%) of gross revenue. In Medellín, rates are established by the municipal council through acuerdos and can differ significantly from those in Bogotá, Cali, or other cities.
ICA is filed bimonthly in Medellín (every two months), with deadlines set by the municipal tax calendar. Taxpayers must also file an annual consolidated return. The tax applies from the moment a business begins generating revenue within the municipality — even if the business is registered elsewhere, if it conducts activities in Medellín, it may owe ICA in Medellín. This territorial principle creates complexity for businesses operating across multiple municipalities, as each location may require separate ICA registration and filing. Additionally, ICA includes complementary levies: the avisos y tableros surcharge (typically 15% of the ICA amount) for businesses displaying signage, and the sobretasa bomberil (fire service surcharge).
Determining the correct ICA rate for your business activity requires matching your operations to the municipal activity classification codes (códigos CIIU), and errors in classification can result in underpayment penalties or overpayment. Our tax team at Legal Diligence Medellín specializes in municipal tax compliance, helping businesses determine the correct activity classification, calculate their ICA liability, and file on time. If you operate a business in Medellín or the surrounding Aburrá Valley, contact us to review your ICA obligations.
Key Points
Municipal Tax on Gross Revenue
ICA is calculated on gross revenue from activities within the municipality, not on net income. Rates range from 2 to 10 per thousand.
Rates Vary by City and Activity
Each municipality sets its own rates by economic activity code. Medellín rates differ from Bogotá, Cali, and other cities.
Bimonthly Filing in Medellín
Medellín requires bimonthly ICA declarations plus an annual consolidated return filed with the Secretaría de Hacienda.
Complementary Surcharges
ICA includes the avisos y tableros surcharge (15% of ICA) and the sobretasa bomberil, increasing the effective tax rate.
Who Does This Apply To?
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Businesses Operating in Medellín — Any business conducting commercial, industrial, or service activities within Medellín must register and pay ICA.
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Multi-City Operations — Companies operating in multiple municipalities must file separate ICA returns in each city where they generate revenue.
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Freelancers and Professionals — Independent professionals providing services within a municipality may be subject to ICA depending on revenue levels.
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Foreign-Owned Businesses — Foreign investors with businesses operating in Colombian municipalities owe ICA regardless of the owner's nationality or residency.
Need Tax Guidance?
Every tax situation is unique. Our tax lawyers will evaluate your circumstances, identify applicable deductions and treaty benefits, and develop a compliance strategy tailored to your needs in Colombia.
Contact UsFrequently Asked Questions
ICA rates in Medellín depend on your specific economic activity as classified under CIIU activity codes. Commercial activities, industrial activities, and service activities each have different rate ranges established by the municipal council. Applying the wrong activity code — which is common when businesses have multiple revenue streams — leads to incorrect tax calculations and potential penalties. Our tax team can review your operations and determine the exact rate applicable to your business.
Yes, if your company conducts commercial, industrial, or service activities in Medellín — even without a physical office — you may owe ICA in Medellín based on the territorial principle. The tax follows the location where the revenue-generating activity occurs, not where the company is legally registered. This applies to businesses that sell into Medellín, provide services to Medellín clients, or conduct any taxable activity within the municipality. We can assess whether your specific operations trigger ICA obligations in Medellín.
Medellín requires bimonthly ICA declarations (every two months) plus an annual consolidated return. Filing deadlines are published in the municipal tax calendar and vary based on the last digit of your NIT. Late filing generates penalties and interest charges that accumulate quickly. Our team tracks all municipal deadlines and can handle your bimonthly filings and annual consolidation to ensure continuous compliance.
Yes, ICA paid during the tax year can be deducted from your national income tax return as an expense, which partially offsets the municipal tax burden. However, the deduction is subject to specific rules and limitations under the Estatuto Tributario, and the interaction between ICA and income tax requires careful calculation to maximize the benefit. Our tax lawyers can integrate your municipal and national tax planning to optimize your overall tax position.
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