Colombia: Proposed regulations on new significant economic presence rule enacted under 2022 Colombian tax reform
Proposed regulations are open for comments until 15 July 2023.
Proposed regulations are open for comments until 15 July 2023.
The Ministry of Finance on 30 June 2023 issued proposed regulations on the new significant economic presence rule enacted as part of tax reform in Colombia in 2022 (Law 2277 of 2022).
The proposed regulations are open for comments until 15 July 2023.
The new significant economic presence rule—applicable from 1 January 2024—establishes a new nexus criterion for tax liability in Colombia applicable to non-resident companies if the non-resident is engaged in the sale of goods to Colombian clients and/or the non-resident is engaged in the provision of “qualified digital services” to Colombian clients/users.
A non-resident that falls within the scope of application of the rule may elect taxation under one of two mechanisms:
- 10% withholding on the total amount paid (i.e., gross income)
- 3% rate over the gross income declared on a tax return (in this case the 10% withholding tax would not apply)
Read a July 2023 report [PDF 201 KB] prepared by the KPMG member firm in Colombia that provides a summary of the proposed regulations
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