Australia and Colombia don't have a tax treaty. That single fact reshapes everything about how an Australian retirement in Colombia should be structured. If done right, it can still be one of the best retirement destinations globally for Aussies; if done wrong, it’s a headache waiting to happen.

Without a treaty, there's no reduced withholding, no formal residence tie-breaker, and no automatic foreign tax credit machinery on either side. Double taxation is a real risk that has to be planned around, not assumed away.

But it's very much workable. Australians retire to Colombia successfully. The playbook just looks quite different from the Canadian version.

CGT Event I1 — Australia's Departure Tax

When you stop being an Australian tax resident, CGT Event I1 deems most of your capital assets sold at market value on that date. Gains are taxed on your final Australian return.

Included: shares (Australian and foreign), managed funds, foreign real estate, cryptocurrency.

Excluded: "taxable Australian property" — mainly Australian real estate and business assets tied to an Australian permanent establishment. These remain in the Australian tax net whether you're resident or not.

The interesting choice: you can elect NOT to trigger CGT Event I1 on non-taxable-Australian-property assets. If you make that election, the asset stays subject to Australian CGT until you eventually sell it. This is often better for retirees moving to a country with no CGT treaty relief - which includes Colombia - and might be better if you’ve got adult children still in Australia (for inheritance purposes).

Superannuation

Australian super is the big question mark in this file.

While Australian tax resident: super is taxed under the ordinary super regime — mostly concessionally at 15% inside the fund, and tax-free in the pension phase after age 60.

While Colombian tax resident: Colombia may treat super income as taxable pension income, or as "renta de capital" (investment income), depending on how it's characterised. Without a treaty, there's no cross-border rule to fall back on.

If Colombia treats super pension income as pension: the 1,000 UVT monthly exemption (about USD 16,200/month) shelters most retirees to zero Colombian tax on that portion.

If Colombia treats it as investment income: it's taxable at progressive rates up to 39%.

This characterisation is a genuine planning question. Structuring your super drawdowns to look most clearly like periodic pension payments (rather than lump sums) helps the case. Getting an expert to present it correctly to DIAN (Colombia’s version of the ATO) and tick all the right boxes also massively strengthens the case.

If you have an SMSF, there are additional issues — the "central management and control" test can jeopardise the fund's Australian tax status if all trustees are non-resident. In this case, you need professional advice if you don’t want to be paying inordinate amounts of tax.

Franking Credits

As an Australian tax resident, franked dividends from Australian shares came with valuable franking credits.

As a non-resident, franked dividends are exempt from Australian withholding tax entirely — but you also lose the franking credit refund. Unfranked dividends attract 30% Australian withholding as a non-resident (or 15% if a treaty applies, which Australia-Colombia doesn't).

Net effect: for a portfolio heavily invested in franked Australian shares, becoming non-resident loses the franking credit refund but avoids Australian tax on the dividend itself. For unfranked dividends, non-residence introduces 30% Australian withholding you didn't previously have.

This shifts the calculus on whether to hold Australian shares personally after emigration, or restructure into a foreign-jurisdiction portfolio.

Australian Real Estate & Property

Australian real estate remains subject to Australian tax on income and CGT on eventual sale, regardless of your residence.

Non-residents lose the 50% CGT discount on future gains from the date you leave. This is significant.

You may also become subject to the Foreign Resident Capital Gains Withholding regime on sale (currently 15% of gross sale price above thresholds).

Options: (i) sell before departure and pay CGT under the resident rules, (ii) keep and accept the non-resident treatment (especially if you plan to eventually return to Aus or just pass the property onto your kids as inheritance), or (in some cases) structure holdings through an Australian entity (such as a Pty Ltd or a Discretionary/Family Trust) that maintains its own tax residency.

Colombian Residency and Tax

Same rules as for any foreigner: 183 days in any rolling 365 makes you a Colombian tax resident, with worldwide income basis.

M-Pensionado visa: 3× SMMLV (about AUD $2,300/month as of July 2026) — most Australians on super drawdowns meet this easily.

Formulario 160 foreign asset declaration required if foreign assets exceed about USD 45,000. Note: this includes your Australian super balance.

There’s also a Colombian wealth tax on global net assets that could be triggered for some Australians with major assets/investments - if you’re concerned this could impact you, get professional advice (our email is hello@ftr.finance and you can book in a video-call at the top and bottom of this page).

Very importantly, if you get your pension/super income correctly classified as ‘pension income’ in Colombia (fill out the right forms, say the right things in your declarations etc.) you can get up to ~AUD$23,000 per month of income completely exempted from Colombian income tax. Without getting this exemption you’ll be taxed up to 39% on the Colombian side.

Of course, if you’re an FTR client, our Colombian take care of all of this for you.

The No-Treaty Problem in Practice

Without a treaty, both countries can theoretically tax the same income. There's no formal mechanism to prevent it.

In practice, Colombia grants a foreign tax credit under domestic law for Australian tax paid on Australian-source income — but the credit calculation is done on Colombia's terms, not through a coordinated treaty framework. Sometimes it works cleanly. Sometimes it doesn't, and small amounts of double taxation slip through.

Planning around the no-treaty gap means: characterising income sources deliberately, timing large events carefully, and often preferring a Panama structure over direct personal ownership for the investment portfolio.

The Panama Layer

Because Australia and Colombia have no treaty, the Panama structure often earns its keep faster for Australians.

Particularly for tax efficiency planning, for USD denomination (Australians are more exposed to AUD-COP volatility), for succession planning, and for creating a clean structural layer that isolates Australian assets from Colombian assets, the Panama foundation-plus-SA setup is often the right answer.

Combined with a well-timed CGT Event I1 election, appropriate super drawdown structuring, and Colombian pension-income characterisation planning, the total tax outcome can be very reasonable (i.e. you could legally have much lower ongoing tax bills than you would if you stayed in Australia).

The Pre-Departure Checklist

• Model your CGT Event I1 exposure and decide on the "opt-out" election for non-taxable-Australian-property assets.

• Decide the super strategy — lump sum before departure vs pension phase drawdowns from abroad.

• Sort out any SMSF residency issues.

• Decide on Australian real property — sell, hold, or restructure.

• Model Australian withholding on any post-departure investment income.

• Sort de-registration from Medicare, driver's licence, and electoral roll.

• Plan the FX transfer to Colombia through the official channel.

• Model the Colombian pension-income characterisation for your specific income mix.

• Consider a Panama structure for the investment portfolio.

• Get pension certificates apostilled for the M-Pensionado application.