|Baker & McKenzie|
|Brigard & Urrutia Abogados|
|Godoy & Hoyos Abogados|
|Philippi Prietocarrizosa Ferrero DU & Uría|
When practitioners in Colombia talk about the tax and transfer pricing markets over the past year, "increasing transparency" and "a changing environment" are the key themes.
While there were no normative changes to Colombia's TP rules in 2015, the government has been working closely with the OECD on several of the BEPS Actions and wants to become a member of the organisation. As Colombia is not yet an OECD member, none of the guidelines are binding, and there have not been any official statements regarding the implementation of BEPS. However, the government has been eager to implement Action 13, on country-by-country reporting (CbCR), practitioners say.
"We're working hard to become a part of it [the OECD]," said Ciro Meza, head of tax at Baker & McKenzie. "This is a special era, things are changing. We are definitely moving towards more and more transparency," he said.
Practitioners say that internal affairs have taken up many resources, and the government has been slow in implementing BEPS as a consequence. But this move towards the OECD, however slow, is having an impact on the tax and transfer pricing markets.
"The environment has changed 360 degrees compared with how it was five years ago," said Meza. "Tax planning is something that has been taken very seriously and very carefully, and the culture of tax compliance is more and more important in Colombia, and this is a result of what's going on in the world," he added.
The Colombian tax authorities have also been increasing scrutiny regarding transfer pricing requirements, and are auditing almost all taxpayers with documentation requirements. Practitioners expect to see more detailed audits and assessments in the future, especially as the government now has members that deal directly with the OECD in order to ensure compliance with the law.
"Some years ago, the tax authorities did not have enough expertise to analyse highly complex transactions," said Carolina Rozo Gutiérrez, co-head of tax at Philippi Prietocarrizosa Ferrero DU & Uría. "However, the tax authorities have recently improved their team, involving former private sector practitioners, so they are now changing the way they conduct these audits, and are trying to sophisticate the auditing process. One of the examples is the transfer pricing division."
Dirección de Impuestos y Aduanas Nacionales
Carrera 8 No 6C – 38 Edificio San Agustín, Bogota
Tel: +57 1 607 9999; +57 1 546 2200
Fax: +57 1 333 7841
(As of April 2016)
|Corporate income tax rate||25% (a)|
|Corporate income tax for equality rate||9% (b)|
|Corporate income tax for equality surtax||6% (c)|
|Capital gains tax rate||10%|
|Branch tax rate||25%|
Withholding tax (d)
|Technical services, technical assistance and consulting services||10% (g)|
|Branch remittance tax||0/40%|
Net operating losses (years)
Source: EY 2016 Worldwide Corporate Tax Guide