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Reforms to wealth tax and income tax

Colombia
20 Jan 2015

Before the end of 2014 the government reviewed and enhanced several tax laws. Taxand Colombia provides a detailled look at the new rates.

Wealth tax

  • The Wealth Tax is generated by the possession of wealth on 1 January 2015 whose value equals or exceeds COP$1.000.000.000 (approximately USD 408,772.25)
  • To determine the application of this tax, companies that have implemented spin-off processes between the date of enactment of the tax reform, 23 December 2014 and 1 January  2015, must add the net worth owned by the spun-off  companies and by the beneficiaries of the spin-off 
  • The payers of this  tax include companies and other foreign entities  in respect of their wealth in Colombia owned directly or indirectly.

Income tax

  • Income tax rate for companies and foreign entities, regarding taxable income not attributable to a permanent establishment or branch, will increase in the  years 2015 to 2018 as follows:

Year

Rate

2015

39%

2016

40%

2017

42%

2018

43%

Discover more: Law 1739 of 2014 - Tax reform


Your contact for further queries is:
Mauricio Pineros Perdomo
T. +571 3192900 Ext. 921
E. mpineros@gpzlegal.com

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Taxand's Take

These amendments to the tax laws have immediate effect, so companies operating in Colombia should review their procedures and make adjustments if necessary to ensure they remain compliant.

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