November 4, 2021
Colombia issues regulations to identify preferential tax regimes
The decree regulates the criteria for identifying preferential tax regimes. Taxpayers may want to consider reviewing their structures to determine whether they are subject to the preferential tax regime rules.
On 28 October 2021, the Colombian Government issued Decree 1357 of 2021, regulating the criteria established by Article 260-7 of the Colombian Tax Code (CTC) for identifying preferential tax regimes (PTR).
Article 260-7 of the CTC establishes five criteria for identifying a PTR. If two of the five criteria are met, the regime will be considered a PTR.
Decree 1357 establishes the following series of assumptions to assess whether each of the criteria is met:
In accordance with Decree 1357, these criteria must be applied to the list of PTRs established by the Organisation for Economic Co-operation and Development, to determine whether they are PTRs under the Colombian regulations.
If it is determined that a person, company or entity is resident, located or carrying out activities in a PTR as established in Article 260-7, the tax implications will be as follows:
For additional information with respect to this Alert, please contact the following:
Ernst & Young S.A.S. Bogota
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young Abogados, Latin America Business Center, Madrid
Ernst & Young LLP (United Kingdom), Latin America Business Center, London
Ernst & Young Tax Co., Latin America Business Center, Japan & Asia Pacific