Cut them a Break | Trinity University

Coronavirus Updates: The latest information on the global pandemic and campus operations.  COVID-19 Website

Apply Now Visit Trinity

You are here

Cut them a Break

Wednesday, February 28, 2018
Emilio Vernaza stands at screen

International Trinity startup COLDECLARA helps Colombians navigate their country’s challenging tax system

by Jeremy Gerlach

Trinity entrepreneur Emilio Vernaza ’17 doesn’t mince words about the tax system in his native Colombia.

“It’s a pain in the a--,” Vernaza grimaces. “And I want to make it less painful.”

Vernaza, along with his brother Joaquin, is the co-founder of Coldeclara, one of the first online tax preparation platforms in the nation of Colombia. The business, started at Trinity University in fall 2016, helped more than 100 clients file their income taxes in 2017, and has its sights set on a massive expansion this coming fall.

But to Vernaza, Coldeclara isn’t just an "international TurboTax." The platform is making a foray into a challenging market: targeting first-time income tax filers who are trying to navigate a complex tax system in Colombia. Many of these prospective clients are young professionals who don’t even know where to begin.

“In the U.S., everybody knows about ‘Uncle Sam,’” Vernaza says. “But in Colombia, our government doesn’t do a good job educating the public on all the documents you need to pay taxes: we even have famous (athletes) coming out and saying didn’t know they have to pay.”

Colombian income taxes work differently from the U.S. system. While U.S. tax season typically runs from March through April 15 (where all U.S. citizens have the same deadline) Colombian tax season runs later in the year, through August. During this period, the Colombian government splits up the “due dates” for different groups of citizens, in order to keep the amount of tax information it needs to process from overwhelming the country’s still-developing technological capabilities.

This can be a confusing time for Colombians, many of whom can have a hard time finding out what their “due date” is, or whether they meet the requirements to pay income taxes at all.

“And it’s not like in the U.S., where you just have TurboTax and a dozen other websites that do everything for you,” Vernaza adds. “It’s stressful.”

Vernaza gained a unique perspective on stress during his time as a Trinity undergraduate. In addition to his accounting major, Vernaza also volunteered with the the IRS’ Volunteer Income Tax Assistance program (VITA), which helps those with limited English-language skills, disabilities, or lower-income taxpayers learn about financial literacy and tax filing.

“These are the people who really need help filing taxes,” Vernaza notes. “And education goes a long way with them.”

After his VITA internship, Vernaza wondered if there was a way to bring a tax platform to Colombia that both prepares taxes and educates its clients.

Trinity’s Center for Innovation and Entrepreneurship had an answer. Vernaza, along with his brother Joaquin, created a basic business plan for the platform that would become Coldeclara, and then approached Luis Martinez, Trinity’s entrepreneurship director, with the idea.

“Dr. Martinez was brutally honest with us—he told us this was going to be hard,” Vernaza says. “But he also told us it was possible. That’s the biggest thing about Trinity - you can ‘validate’ your business model here, to see if you’re actually going to be sustainable.”

Along with Trinity’s academic resources, the Vernaza brothers also benefited from capital opportunities such as the university’s annual Stumberg Venture Capital competition, where Coldeclara competed against dozens of other Trinity startups in a multi-year, “Shark Tank”-style contest. The group won $5,000 in the preliminary round of the competition in Spring 2017, and then won another $5,000 share of the event’s $25,000 grand prize, along with co-champions RADD (an outdoor camping and lifestyle company) in the final round in October.

Emilio Vernaza holds giant check

Despite not taking home all of the top winnings, Vernaza still took away invaluable feedback from the competitive process.

“Trinity gave us a safe space to fail,” Vernaza says. “We learned that we needed to sharpen our focus, and corner a manageable segment of the marketplace that we can really dominate. And it’s better to learn that while you’re still in school … than to learn it when you’re on your own.”

Coldeclara took this lesson to heart, transitioning its business model from being a “one-stop-shop” for every imaginable Colombian tax filer into a focused enterprise that caters to young professionals filing taxes for the first time.

“Dr. Martinez showed us how to identify that niche,” Vernaza says. “Now, we’re going to take our business and delight that niche.”

But even with their market cornered, Coldeclara still faces a challenge.

“Our biggest problem is trust,” Vernaza says. “We have to convince these Colombians, many of whom don’t trust technology or have been scammed online before, that we can help them. How do we change that paradigm?”

During Coldeclara’s initial run in 2017, the business was able to answer this question by promising a personal level of attention to clients.

“(Joaquin) and I were just two brothers, filing about 100 clients’ taxes by hand,” Vernaza recalls.

“We were basically telling people, ‘just send us your documents,’and we were shocked that people actually turned them in.”

Now, Coldeclara is gearing up for the 2018 tax season as a computerized accounting platform that has automated “about 95 percent of the filing process,” Vernaza explains. Where the business retained an initial 100 paying clients (out of about 300,000 people who viewed the website, total, in 2017) Vernaza says he has leads on retaining 5,000 clients in 2018.

The company has also launched a targeted advertising campaign, and offers accessibility and payment options inside Colombian retail locations.

All of these changes, Vernaza adds, will help Coldeclara retain its two biggest draws: ease of access and personal attention.

“With our automation, we’re confident that we’re going to be able to scale our business up, no problem,” Vernaza says. “But with that other ‘5 percent’ of the process, we’re checking everything for our clients - they want an actual human accountant making sure everything is correct.”

But for all the software, advertising and applications, Vernaza also wants Coldeclara to answer this “question of trust” through the power of education.

“People want to learn how to do their taxes, they don’t want to be sold ‘tax preparation,’” Vernaza says. “So, we’ve developed educational videos and resources that will help empower people to learn more about Colombia’s tax filing process. When people can see a human face instead of a blank document, they trust that.”

And Coldeclara, Vernaza adds, sees its clients as more than customers. Each person who uses Coldeclara is a young professional, just taking his or her first financial steps. Perhaps they’re in the middle of their own “failing moment,” the way Vernaza was at Trinity; or they might be the first member of their generation to learn to file income taxes, like participants in the VITA program.

Either way, Vernaza says this is where Coldeclara has “true value:” extending a helping hand to Colombian taxpayers when they need someone to trust.

“That goes back to what we learned at Trinity,” Vernaza says. “Joaquin and I still talk with Dr. Martinez, he still helps us with questions we have: and we’re not even in the same country anymore. That’s what I love about this place.”

Jeremy Gerlach is Trinity University’s Brand Journalist, and his favorite time of the year is tax season. At age eight, he audited his own parents: and let me tell you, he found some discrepancies. Find Jeremy on Twitter @JT_Gerlach or email him at jgerlach [at]