Simple Taxation Regime (RST) in Colombia: 2026 Guide for Merchants and Freelancers

Quick answer: According to the official DIAN microsite, consulted in August 2026, the Simple Taxation Regime (RST) is an optional and voluntary model promoted by the DIAN that replaces income tax and integrates the consolidated ICA, and is declared annually with bimonthly advances, except for legal exceptions. For 2026, merchants and independent professionals whose annual gross income is less than 100,000 UVT ($5,237,400,000 COP) may opt for it. However, it does not always guarantee savings compared to the ordinary regime; its convenience depends on your profit margin, deductible costs, and economic activity.

What is the Simple Taxation Regime and how does it work?

If you are a merchant, provide professional services, or manage a small business in Colombia, you know that tax management can become overwhelming. The Simple Taxation Regime (RST) was created with the aim of reducing informality and facilitating compliance with tax obligations by integrating several taxes into a single form.

Unlike the ordinary regime, where income tax is calculated on net profit (income minus costs and deductions), in the RST, the tax is settled by applying a progressive rate directly on the invoiced gross income. This significantly simplifies daily accounting, as it eliminates the need to meticulously refine deductible costs for national income tax purposes, although it requires strict control of invoicing.

Withholding treatment has its own rules and exceptions within the RST; it is advisable to confirm its application with an accountant based on the activity and each payment.

Who can register in the RST and who is excluded?

The RST is primarily designed for individuals conducting business activity (including shopkeepers, artisans, merchants, and independent professionals) and for legal entities whose partners are individuals residing in Colombia.

However, tax regulations establish clear limits. The following are excluded from the Simple Regime:

• Those who do not meet the residency and corporate composition conditions provided by the Tax Statute.
• Those who obtain income solely from an employment or legal and regulatory relationship, rather than developing a business.
• Those who perform activities or have conditions expressly excluded by the Tax Statute.
• Taxpayers who reach or exceed the annual gross income limits set by law.

Income and UVT limits in 2026: how much can you invoice?

To determine if you can join or remain in the Simple Regime during 2026, the DIAN sets the thresholds in Tax Value Units (UVT). With the UVT set by the DIAN at $52,374 COP for 2026, the current limits are as follows:

Concept	Limit in UVT	Value in Colombian Pesos (2026)
General gross income limit (previous or current year)	100,000 UVT	Up to $5,237,400,000 COP
Exemption from bimonthly advances for individuals	3,500 UVT	Up to $183,309,000 COP

A key benefit for small independents and merchants who do not exceed 3,500 UVT in annual income ($183,309,000 COP in 2026) is that they are exempt from filing and paying bimonthly advances. Instead, they only file the consolidated annual return and make a single payment at the end of the taxable period, which significantly reduces the administrative burden.

RST rates by economic activity

RST rates are progressive and vary according to the economic activity group in which the taxpayer is classified and the level of gross income obtained. The DIAN classifies activities into different main groups:

• Group 1 (Shops and small businesses): Includes neighborhood stores, mini-markets, hair salons, and small retail businesses. It has the lowest rates in the regime.
• Group 2 (Trade and industry): Groups together wholesale and retail trade activities, technical services, electricity, and construction.
• Group 3 (Professional and independent services): Professional, scientific, and technical services where the intellectual factor predominates. Rates in this group are higher due to the typical margins of the activity.
• Group 4 (Food and beverage and transport): Restaurants, cafeterias, catering services, and cargo or passenger transport.

According to the official DIAN rate table, consulted in August 2026, the consolidated rates range between 1.2% and 14.5% according to the official Tax Statute table and the income bracket. Since these rates apply to gross income without deducting costs, it is essential to evaluate if your profit margin can support paying a fixed percentage on total sales.

Step by step to register for the RST (with or without RUT)

The registration process depends on whether or not you already have an active Single Tax Registry (RUT):

If you already have an active RUT:

Taxpayers enrolled in the ordinary regime who wish to move to the RST must update their responsibility in their RUT (including responsibility 47 - Simple Taxation Regime). According to the official DIAN registration guide, consulted in August 2026, this procedure is carried out virtually between January 1 and the last business day of February of each taxable year.

If you are registering for the first time (New merchants and independents):

If you are starting activities and are going to formalize your RUT for the first time, you can select the Simple Taxation Regime option directly during the online registration process.

As a reference from the entrepreneurial ecosystem, the Colombia Move services section recorded 109 active listings and 14,763 views in August 2026. That activity does not determine if the RST is suitable: before choosing it, the practical recommendation is to project gross income, fixed costs, and obligations with the help of an accountant.

Obligations after registering: electronic invoicing, advances, and annual return

Opting for the RST means assuming digital formalization commitments before the DIAN:

1. Electronic invoicing: You must adopt, when applicable, the electronic sales invoice system or equivalent electronic document within the deadlines established by the DIAN. You can use the free DIAN service or a technology provider; our electronic invoicing guide for independents explains that process.
2. Electronic signature: It is essential to have the DIAN electronic signature instrument (IFE) to sign forms and returns.
3. Bimonthly advances (Form 2593): Unless you do not exceed 3,500 UVT as a natural person, you must calculate and pay bimonthly advances using the electronic Simple receipt.
4. Annual Consolidated Declaration (Form 260): It is filed according to the applicable tax calendar, and it consolidates income, paid advances, and the final tax. Check the official deadline that corresponds to your NIT.

It is important to remember that the RST integrates the Industry and Commerce Tax (ICA) consolidated by the municipalities, so the DIAN is responsible for transferring the corresponding portion to each mayor's office. For those evaluating their profile against the traditional income tax, we suggest reviewing our comparison on the income tax return for natural persons in Colombia.

When is the RST convenient and when is the ordinary regime better?

The RST is not a universal solution. It is especially advantageous for businesses with a high profit margin and few demonstrable deductible costs, or for those who suffer a high volume of withholding at source in the ordinary regime. Conversely, if your business operates with a very low profit margin or reports operating losses in its first few years, applying a fixed rate on gross income in the RST will force you to pay tax even if you have not generated accounting profit.

Therefore, it is recommended to perform a simulation with a certified public accountant before making the final decision to switch before the February deadline expires.

This guide offers general tax information, not personalized advice. Confirm your case with the DIAN and a public accountant, especially if you have multiple activities, VAT, or income in different municipalities.

Frequently Asked Questions

❓ What is the Simple Taxation Regime in Colombia?

It is an optional regime that replaces income tax and integrates the consolidated ICA, with an annual declaration and bimonthly advances, except in specific cases. According to the DIAN, consulted in August 2026, its application depends on compliance with legal requirements.

❓ Who can register for the RST in 2026?

Natural person entrepreneurs and certain companies with resident partners can register. They must also remain below 100,000 UVT and meet the legal requirements and exclusions, according to the DIAN and Tax Statute consulted in August 2026.

❓ What is the income cap for the RST in 2026?

The general cap is 100,000 UVT, which is equivalent to $5,237,400,000 COP in 2026. For natural persons with income up to 3,500 UVT ($183,309,000 COP), the obligation for bimonthly advances does not apply, according to the DIAN and Tax Statute consulted in August 2026.

❓ Until when can I switch to the RST if I already have a RUT?

The deadline is from January 1st to the last business day of February. If you already have a RUT, you must update the responsibility on the portal, according to the DIAN guide consulted in August 2026.

❓ Does the RST automatically replace VAT collection?

Not necessarily. If your economic activity is subject to VAT (such as general commerce) and you exceed the non-liable thresholds, you are still required to collect and declare VAT according to the rules applicable to your activity and status. Rule reviewed with DIAN sources in August 2026; confirm your case with an accountant.

❓ Does the Simple Taxation Regime always save money on taxes?

Not always. The convenience of the RST depends on your cost structure and margins. If your costs are high, the ordinary regime on net profit could be cheaper than paying a rate on gross income. General comparison reviewed in August 2026; simulate both scenarios with an accountant.