We are pleased to share with you the Tax Bulletin for December and January.  In this edition, we are pleased to share the concepts of addition by Dian, the OECD administrative guide for PES, among others. For...

We are pleased to share a guide prepared by the Latin American tax law expert team on Double Taxation Avoidance Agreements. These treaties play a crucial role in the legal certainty of foreign investments and in reducing the impact of double taxation, fostering a conducive environment for trade exchange. In this guide, we:Explore, in a concise and practical manner, the tax treatment of non-residents in Brazil, Chile, Colombia, Mexico, and Peru. Provide key references on legislation, judicial criteria, and essential aspects of the Double Taxation Avoidance Agreements in force in each jurisdiction. Include the list of current agreements in each country.

Colombia has 13 Double Taxation Agreements - download the complete guide to see the full listing -, which are indicated in Appendix 3, following the OECD Model (Spain, Chile, Switzerland, Canada, Mexico, South Korea, Portugal, India, Czech Republic, United Kingdom, France, Italy and Japan) and (Arab Emirates, which is not yet in force), and since it is part of the Andean Community, Decision 578/2004 is applicable to it.  Colombia signed the MLI (Multilateral Convention to Implement Tax Treaty Related Measure to Prevent BEPS), but to the date the legal procedures required for it to enter into force in Colombia (approval as a law before the Congress, analysis of con­sti­tu­tion­al­ity by the Constitutional Court, ratification, etc.) have not been completed. Prevalence of DTAs In Colombia, it has been established that in case of conflict between an international agreement to avoid double taxation and a domestic tax legislation, the international agreement to avoid double taxation prevails in accordance with the principles of specialty and pacta sunt servanda. Tax Ruling No. 100202208-96 – Of the Colombian Tax Authority (“DIAN” per its acronym in Spanish) Ruling C-460 of 2010 – Council of State Constitutional Court The Colombian Constitutional Court has recognized that although the OECD comments are not binding, they are an important interpretative tool in such a complex and changing subject as the international agreements to avoid double taxation. Tax Ruling C-460 of 2010- Constitutional CourtThe Colombian Constitutional Court has recognized that income tax and sim­il­ar/ana­log­ous taxes are autonomous taxes under the Colombian tax regime, but for the purposes of the international double taxation agree­ments, they are assimilable. Tax Ruling C-00049 of 2015, Tax Ruling C-00289 of 2014, Concept 0023323 of 2015, Concept 067157 of 2014 and Concept 073092 of 2013 Colombian Tax Authority (DIAN) Ruling Opinions Among others:The Colombian Tax Authority (“DIAN” per its acronym in Spanish) has issued an interpretation regarding the exempted income referred to in CAN Decision 578, which must be recorded as exempt income, while the non-taxable income provided for in the international agreements to avoid double taxation are INCRGO (income not constituting income or profit). Concept 34760 of 2015- DIANIt has also ruled on the constitutional principle of Pacta Sunt Servanda, which establishes that the international agreements to avoid double taxation are a special law of preferential application, and it is not possible to modify international agreements by Decree- Office 96 of 2021- DIAN. Interpretation of the Most Favored Nation clause (MFN) (Concept 20003283 of 2020) Regarding to the Colombia-Spain DTA, with the entry into force of the Colombia-United Kingdom DTA, the treatment provided for in Section 12 of the Colombia-Spain agreement on royalties is not altered or mod­i­fied. Re­gard­ing to the Colombia-Mexico DTA, the concepts of technical services and technical assistance will no longer be treated as royalties. The consideration for consulting services is not covered by the most favored nation clause, and therefore, it will continue to be treated as a royalty under this agree­ment. Re­gard­ing to the Colombia-Chile DTA, the exclusion of the concepts of technical service, technical assistance and consultancy from the definition of Section 12 of the Colombia-United Kingdom DTA does not constitute an exemption or a stipulation of a lower rate in the terms of this treaty. Thus, the Colombian Tax Authority (“DIAN” per its acronym in Spanish) concluded that the MFN clause of the Colombia-Chile DTA. Regarding to the Colombia-Czech Republic DTA, the concepts of technical services, technical assistance and consultancy will no longer be treated as royalties. Regarding to the Colom­bia-Por­tugal DTA  with the treatment in force of the Colombia-United Kingdom DTA, under the mentioned international agreement to avoid double taxation it is indicated that the concepts of technical services, technical assistance and consultancy will no longer be treated as roy­al­ties. Re­gard­ing to the Colom­bia-Switzer­land DTA, the agreement foreseen in Section 12 of the Colom­bia-Switzer­land DTA does not generate any type of alteration or modi­fic­a­tion. Re­gard­ing to the Colombia-Canada DTA, the MFN clause is only applicable for royalties and not for interests. In this case, it is limited only to events in which more favorable conditions are agreed with a third country regarding technical services, technical assistance and consulting. In relation to South Korea, India, France, Italy and Japan, no most favored nation clause was not agreed with respect to this issue.

We are pleased to share the Tax Bulletin with the most relevant regulations and decisions issued in tax and customs matters during July – August 2023. Among other topics, we briefly summarize about...

We are pleased to share Tax Bulletin No. 58 in which you can find the new guidelines for the application of the New Customs Penalty Regime; guidelines in the determination of the tax cost of the shares...

We are pleased to share Tax Bulletin No. 57 in which you can find the way to apply the tax benefits in consolidated legal situations after the derogations of Law 2277 of 2022 (Tax Reform 2022); the guidelines...

We are pleased to share our new version of the Tax Bulletin with the most recent regulations and doctrine on tax matters. In this opportunity, we would like to present the clarifications on the tax procedure...

We are pleased to share our new version of our Tax Bulletin. Under this version, we present all the information you need to know about the Simple Tax Regime (“Regimen SIMPLE” for its acronym in Spanish)...

We are pleased to share the Tax Bulletin No. 54. On December 13 of 2022, the Colombian government enacted the new tax reform, Law 2277 of 2022. Under this new version of the Tax Bulletin, we will explore...

We are pleased to share the Tax Bulletin with the most relevant regulations and decisions issued in tax matters during November 2022. Among other topics, we briefly summarize about the most recent decisions...

We are pleased to share the Tax Bulletin with the most relevant regulations and decisions issued in tax matters during October 2022. Among other topics, we briefly summarize about the most recent resolutions...

We are pleased to share the Tax Bulletin with the most relevant regulations and decisions issued in tax matters during September 2022. Among other topics, we briefly summarize the progress and changes...