Accounting for a foundation in Colombia: what obligations do you have?

Last updated: July 2026

Many foundations are created with every intention of helping but no clarity regarding accounting, and this oversight is one of the most costly mistakes. The accounting of a foundation It's not an optional procedure or a luxury for large organizations: it's a legal obligation from day one, and tax benefits, donor trust, and even the organization's survival depend on it. Managing it well doesn't complicate the mission; it protects it.

We are Hepacom, the Hechos Para la Comunidad Foundation (Tax ID 900.841.914-1), and we work for decent housing in the southern Aburrá Valley. Like any non-profit organization, we are accountable and keep our books in order, and we know how intimidating all of this can sound when you're starting out. So let's explain it clearly: what accounting your foundation should keep, under what regulations, what you report to the Colombian Tax Authority (DIAN), and why this supports, rather than hinders, your work with families.

Is a foundation in Colombia required to keep accounting records?

Yes, and without exception for being non-profit. Every non-profit entity (NPO) is required to keep accounting records in accordance with the Commercial Code and specific regulations for the sector, including Article 364 of the Tax Code and Article 2 of Law 1314 of 2009. "Non-profit" means that profits are not distributed among the members, not that the entity does not handle money or is not required to record it.

The most common misconception is that a small foundation, which receives only a few donations a year, can keep its accounts "in a notebook." This is not the case: it needs formal accounting, with supporting documentation and within a technical framework. This accounting is the basis for almost everything else, from renewing the Special Tax Regime (RTE) until proving to a donor that their contribution was used as promised.

What accounting standards does a foundation use to keep its accounts?

Since Law 1314 of 2009, Colombia has adopted International Financial Reporting Standards (IFRS). The technical framework is compiled in the Decree 2420 of 2015 and its annexes. There, entities are classified into three groups —Group 1 (full IFRS), Group 2 (IFRS for SMEs) and Group 3 (simplified accounting)— according to their size: assets, income and number of employees, among other criteria.

Foundations are classified using the same parameters as any other entity. In practice, most small and medium-sized foundations fall into Group 2 or Group 3, which are less stringent frameworks. Knowing which group you belong to is crucial: it determines which financial statements you prepare and at what level of detail. This is the kind of definition that should be addressed with an accountant from the outset, along with the foundation statutes.

What books and accounting records should your foundation keep?

Accounting doesn't live in anyone's memory; it lives in records. Your foundation must keep its accounting books (where all transactions are recorded) and retain supporting documentation for every transaction: invoices, receipts, income and expense vouchers, bank statements, and certificates of donations received. All of this backs up every penny that comes in and goes out.

This documentation serves two purposes. For the Colombian tax authority (DIAN), it proves that the entity truly operates as a non-profit organization and deserves its benefits. For donors and the community, it is the foundation of transparency. When this documentation is up-to-date, tasks such as annual obligations of a non-profit organization They cease to be a race against the clock every year.

What is exogenous information and when does your foundation report it to the DIAN?

The exogenous information (or magnetic media) is an annual report in which entities inform the DIAN (Colombian Tax Authority) of the details of their operations: who donated to them, who they paid, their income, and their expenses. It allows the tax administration to cross-reference data between taxpayers. Many foundations are required to submit it when they meet the criteria defined by the DIAN.

Here's the important warning: the thresholds that determine who reports, the formats, and the deadlines They change every year. And the DIAN sets them through a resolution. That's why we don't give you a fixed figure: the correct thing to do is check the current resolution on the DIAN website. DIAN each year, or confirm with your accountant. Filing the tax return late or with errors carries penalties, so it's not a report to leave until the last minute.

How does accounting connect with the Special Tax Regime (RTE)?

This illustrates why accounting is so strategic. Foundations belonging to the RTE (Special Tax Regime) receive significant tax benefits, but in return, they must demonstrate each year that they deserve them, and this demonstration is done through accounting. For the annual RTE update process, the entity submits its financial statements and, if its gross income for the previous year exceeds 160,000 UVT (Tax Value Units), a financial report detailing its projects and resources.

If the accounting is disorganized or incomplete, the process becomes a headache, and in the worst-case scenario, the organization can lose its RTE rating and be relegated to the standard regime. That's why we insist: keeping accurate accounts isn't bureaucracy; it's what sustains the benefits that make a foundation sustainable. If you're taking the first steps, our guide to How to create a foundation in Colombia It identifies where accounting fits into the whole process.

Prepared by Hepacom based on Law 1314 of 2009, Decree 2420 of 2015, and the DIAN regulations on the Special Tax Regime. The limits and deadlines are set annually by resolution of the DIAN. Last updated: July 2026.

Common errors in the accounting of a foundation

• Believing that "non-profit" exempts one from keeping accounts: It does not exempt. The foundation manages resources and must formally register them, just like any other entity.
• Leaving the brackets loose or losing them: Without invoices, receipts, and supporting documents, the accounting is unsustainable and jeopardizes continued membership in the RTE (Registry of Taxpayers). Records must be kept up-to-date, not just at the end of the year.
• Confusing accounting with taxes and leaving external reporting until last: These are separate matters with their own deadlines. Reporting late to the DIAN (Colombian Tax Authority) can result in avoidable penalties.

Do I need an accountant or an auditor for my foundation's accounting?

A certified public accountant is essential: they maintain and certify the accounting records and guide you on IFRS standards, financial statements, and reporting to the Colombian Tax Authority (DIAN). This is not an unnecessary expense; they are the person who prevents an accounting error from costing you the RTE (Taxpayer Identification Number). A statutory auditor is different: they are a control figure required by law only in certain cases, not for all foundations. We explain when this applies in our guide on the... statutory auditor in a non-profit organization.

The honest recommendation is not to improvise with this. A well-run foundation dedicates a small portion of its resources to sound accounting advice, and in return gains peace of mind, credibility with donors, and secure tax benefits. That money isn't taken away from the mission; it makes it sustainable.

How Hepacom accompanies you

If you are creating or running a foundation and these issues overwhelm you, write to us at donaciones@hepacom.org or from contact us. We gladly share what we've learned from keeping our own accounts in order and guide you on where to find support. We do this because every well-managed foundation is one that can continue helping families achieve decent housing. However, the accounting is handled and certified by a public accountant, and tax reports are filed with the Colombian Tax Authority (DIAN). Hepacom does not charge fees, manage payments, or handle accounting procedures.

Frequently Asked Questions

Does a small foundation also need to keep accounts?
Yes. Size does not exempt an organization from this obligation; it only influences the applicable IFRS group (generally Group 2 or 3, which are less stringent). All non-profit organizations, regardless of their income, must maintain formal accounting records with supporting documentation.

What happens if my foundation doesn't keep good accounts?
It could lose its status in the Special Tax Regime and be relegated to the ordinary regime, in addition to facing penalties from the DIAN (Colombian Tax Authority). It also loses credibility with donors, who increasingly demand greater transparency before contributing.

Is accounting the same as filing an income tax return?
No. Accounting is the permanent record of transactions; income tax returns and external reporting are tax reports prepared based on that accounting. One is the foundation; the others are products derived from it.

Last updated: July 2026. This is an informational guide; it is not accounting or tax advice. Accounting is handled and certified by a public accountant, and reports are filed with the DIAN (Colombian Tax Authority), whose thresholds and deadlines change annually by resolution. Always verify the current regulations through official channels. Hepacom does not charge fees or manage payments or procedures.