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Colombia

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Tax authorities

Dirección de Impuestos y Aduanas Nacionales
Bogotá, Nivel Central, carrera 8 Nº 6 - 64 edificio San Agustín
Tel: +57 1 6079999
Website: www.dian.gov.co

Tax rates at a glance

(As of September 2011) 

Corporate Income 33%
Capital Gains 33%
Branch Tax 33%
 
Withholding Tax
Dividends 0%/20%/33%
Interest 0%/14%/33%
Royalties
   Software 26.4%
   Other 33%
Technical Services, Technical Assistance and Consulting Services 10%
Branch Remittance Tax 0
 
Net Operating Losses (Years)
Carryback 0
Carryforward Unlimited
  • Reduced and gradually increasing tax rates for corporate income, capital gains and branch profits exist.
  • Dividends paid to nonresidents are not subject to tax if the dividends are paid out of profits that were taxed at the corporate level. If the dividends were not taxed at the corporate level, dividends paid to nonresidents are subject to withholding tax at the regular corporate income tax rate of 33%. A 7% dividend tax applies to dividends declared in the 2006 and prior tax years that were reinvested in Colombia if they are remitted to nonresidents within five years after the date of reinvestment. If such dividends are reinvested for a period of five years or more, the 7% dividend tax does not apply. Dividends paid between domestic corporations are not subject to tax if the company generating the profits out of which the dividends are paid is taxed on these profits in Colombia. Otherwise, the dividends are included in the income tax return of the recipient of the dividends and taxed at the regular corporate income tax rate of 33%. A 20% withholding tax is imposed on dividends paid to residents if the taxpayer is required to file an income tax return; otherwise, the withholding tax rate is 33%.
  • In general, from January 1 2011, interest paid or accrued by Colombian residents to qualified foreign financial entities on loans with a term equalling or or more than one year are subject to 14% withholding tax; otherwise, the applicable rate is 33%. Interest paid by Colombian financial institutions to qualified foreign financial entities and interest paid by Colombian residents to foreign entities with respect to international trade operations are deemed to be foreign-source income and are accordingly exempt from withholding tax. Certain qualified loans executed before December 31 do not generate Colombian-source income. As a result, interest on such loans is exempt from withholding tax.
  • Withholding tax applies to consulting services, technical services and technical assistance services rendered in Colombia or from abroad by nonresidents that are not domiciled in Colombia.
  • Beginning with the 2007 fiscal year, tax losses may be carried forward without limitation. Losses generated between 2003 and 2006 offset profits in the following five years with a 25% annual limitation. Restrictions apply to the transfer of losses with respect to spin-offs or mergers.

Source: Ernst & Young

Colombia

Carlos Forero Jiménez
Godoy & Hoyos Abogados
Columbia

In the last five years, direct foreign investment of between $7 billion and $10 billion has flowed into Colombia, often through private equity funds. Carlos Forero Jiménez of Godoy & Hoyos explains the tax rules that apply to such funds

[Show full article]

Tax

Deloitte has a strong presence in the Colombian market with one of the largest practices in the country. The firm has five partners and 92 specialists working in international corporate tax, indirect tax and transfer pricing. Partner Andrés Parra remains ... [more]

Over 140 tax specialists in five cities comprise the tax group of Ernst & Young in Colombia. Luz Maria Jaramillo leads a team of dedicated experts with more than 30 years of experience in international and local tax issues, particularly in the oil and ... [more]

The tax team at KPMG is led by partner Juan Pablo Murcia. With five partners and 92 specialists, 12 of whom work in transfer pricing, KPMG's standing in the Colombian tax market remains strong. In May 2011 partner María Consuelo Torres and senior professionals ... [more]

Law firm Lewin & Wills, has made a big impact in the Colombian tax market and still merits its top tier ranking. Alfredo Lewin, the founding partner of the firm, is head of a tax group that is is praised by a client for its "personalised and high-quality ... [more]

PwC

PwC has some of Colombia's "best transfer pricing specialists", says another adviser. Partner Francisco González, who is recognised for his exceptional transfer pricing abilities and Carlos Mario Lafaurie Escorce who is noted by competitors as being ... [more]

Brigard & Urrutia is a full-service law firm with a tax practice that excels in capital markets and financial products work. The practice has an extensive portfolio of tax services in national and international corporate tax with partner Carlos Fradique-Méndez ... [more]

Paul Cahn-Speyer is the founder and partner of Cahn-Speyer, Paredes & Asociados. His is a niche tax firm.

Godoy & Hoyos Abogados has a reputation for its international and local tax work. Jaime Moya, former legal vice president for Almacenes Exito, and Carlos Alberto Espinoza, former financial manager in Colombia of Total, the French energy company, joined ... [more]

Gómez-Pinzón Zuleta - Taxand provides first-rate tax advice and. Mauricio Piñeros is head of the practice. In his 22 years of experience, he has counselled clients in a variety of matters including M&A, private equity investments and financial transa... [more]

Mauricio A Plazas Vega Abogados y Cía's founding partner Mauricio Plazas Vega is commended by many peers for his "extensive litigation and cross-border structuring work". The practice has six other partners, an economist and five legal assistants.

In the Colombian tax market, Posse Herrera & Ruiz, is known as a "solid firm" among competitors. One of the firm's founding partners, Juan Guillermo Ruiz, is known for his advanced knowledge of M&A tax. The practice has earned a fine reputation in the ... [more]

Members of the tax practice of Prieto & Carrizosa recently argued before the tax authority, regarding the special transfer pricing rules applicable to coal exports. This unprecedented litigation marks the first time discussions before the tax authority ... [more]

Quiñones Cruz Abogados "is truly a boutique tax law firm" according to a competitor. The group has a 93% litigation success rate over the last 20 years. In the past year they represented a range of clients in multi-million dollar transactions. The practice ... [more]

Jaime Vargas Cifuentes heads the tax practice of Raisbeck Lara Rodríguez & Rueda in cooperation with Baker & McKenzie, and brings years of experience in national and international tax planning, tax controversy and litigation. He has particular experience ... [more]

See also

Colombia
Latin America

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