Colombia: Tax proposals in draft legislation include 15% minimum tax, surcharges, digital services tax
Draft tax reform legislation includes a number of tax proposals
Draft tax reform legislation includes a number of tax proposals
The Congress first debated (on 6 October 2022) draft tax reform legislation that includes the following tax proposals:
Corporate income tax
Deductions, benefits, tax credits
- Repeal of mega-investments and economic and social development zones regime (ZESE), and the “CERT” tax refund certificate for oil, gas and mining
- Repeal of the 5-year straight-line amortization regime for the oil and mining industry
- Repeal of exemption of income from certain activities such as:
- Orange economy
- Productivity benefits for the agricultural industry
- New forestry plantations
- River transportation services
- Reduction in threshold for exempting profits arising from the sale of shares listed in the Colombian stock exchange to sales of shares that do not exceed 3% (currently 10%) of the entity´s outstanding shares
- Increase in the tax rate applied to the reacquisition by an entity of its own shares, irrespective of the holding term of the respective shares, to the 35% corporate income tax rate (from current 10% rate provided shares have been held for two years or more)
Capital gains tax
- Increase in capital gains tax rate to 15% (from 10%)
Dividends tax
- Increase in withholding tax rate applicable to nonresidents on the distribution of dividends out of previously taxed income to 20% (from 10%)
- Increase in withholding tax rate applicable among national companies on the distribution of dividends out of previously taxed income to 10% (from 7.5%)
Digital services tax
- Introduction of digital services tax applicable to specified digital services
- New significant economic presence test for sales of goods in Colombian market
Value added tax (VAT)
- Elimination of VAT-free days
- Imposition of VA on transportation of valuables
- Elimination of VAT exclusion for postal traffic goods under USD 200
Other taxes
- Reenactment of national 1.5% stamp tax over immovable goods transactions valued in excess of USD 165,000
- Introduction of a permanent wealth tax
- Introduction of single-use plastic tax and ultra-processed beverages and food products tax
If enacted by 31 December 2022, the proposed measures would become effective in 2023.
Read an October 2022 report [PDF 308 KB] prepared by the KPMG member firm in Colombia
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