2016哥伦比亚商税指南（英文版）_20页_466kb

Summary of Taxation and Investment in Colombia 2016

Core Content

Colombia is a unitary republic with a president elected for a four-year term, and a bicameral legislature. The country has a diversified economy with key sectors including agriculture, industry, telecommunications, and natural resources. Colombia's main exports are oil, coal, coffee, and ferrous nickel. It is not yet an OECD member but is an OECD accession candidate.

Main Forms of Business Entities

• Joint Capital Stock Corporation (SA): Requires at least five shareholders, with the company name including "SA". Shareholders are liable up to their capital contribution. Management is handled by the general meeting, board of directors, and legal representative.
• Simplified Joint Capital Stock Corporation (SAS): More flexible structure with at least one shareholder. Management includes the general meeting, an optional board of directors, and a legal representative. Shares may have different voting rights.
• Limited Liability Company (LLC): Partners are liable up to their contributions. Must include "Limitada" or "Ltda." in the name. Minimum of two partners, maximum of 25.
• Branch of a Foreign Corporation: Legally an extension of the head office. Must be registered with the local chamber of commerce, with documents authenticated by a Colombian consulate or notary.

Foreign Investment

• Foreign investment is allowed in all sectors except those related to national security and hazardous waste disposal.
• Foreign investors can own up to 100% of a Colombian company, but certain sectors like broadcasting have a 40% cap.
• Authorization from the Financial Superintendent is required for investments in banking, insurance, and portfolio investments.
• Foreign investment must be registered with the central bank, and profits can be repatriated with proper documentation.

Tax Incentives

• Incentives are available for investments in priority sectors such as manufacturing, agroindustry, mining, and petroleum.
• These include preferential import tariffs, tax exemptions, and access to government credit or risk capital.
• Free trade zones offer a 15% corporate income tax rate and exemptions from customs duties and VAT.
• Stability contracts are no longer available, replaced by other incentive mechanisms.

Exchange Controls

• The central bank oversees foreign exchange matters, with the minister of public finance on the board.
• Foreign direct investment can enter without central bank registration, but most transactions must go through authorized intermediaries.
• Repatriation of profits and certain capital movements require central bank registration.
• Special exchange rules apply to foreign investors in the oil and gas sector.

Taxation Overview

Colombia's taxation is mainly governed by the Tax Code and administered by DIAN. Key taxes include:

• Corporate Income Tax: 25% for all firms and branches, 15% for companies in free trade zones.
• CREE (Income Tax for Equality): 9% on taxable income, with a surcharge of 6%, 8%, and 9% for 2016, 2017, and 2018 respectively.
• Branch Tax: 25% for foreign branches operating in Colombia.
• Withholding Tax: Varies by type of income (e.g., 33% on dividends to nonresidents, 0% to 33% on dividends to residents).
• VAT: 16% standard rate.
• Consumption Tax: 4% or 8%.
• Social Security Contributions: 20.5% plus variable percentage for work accident insurance.

Taxable Income and Rates

• Residency: A company is considered resident if it is organized under Colombian law, has its main domicile in Colombia, or has its administration headquarters in Colombia.
• Taxable Income: Defined as gross income minus allowable deductions. Companies are taxed on the higher of net income or presumptive income.
• Presumptive Income: Minimum taxable income must be at least 3% of the company's tax equity from the previous year.
• Worldwide Income: Colombian companies are taxed on worldwide income, while foreign branches are taxed only on Colombian-source income.

Accounting and Compliance Requirements

• Companies must maintain official books in accordance with commercial and tax laws.
• Annual balance sheets and supervisory fees (0.05% of total assets) are required for SAs and SASs under the control of a superintendence.
• Statutory auditors are required for SAs and SASs exceeding certain asset or income thresholds.
• Companies registered on the stock exchange must report financial information monthly.
• Colombia is in the process of adopting IFRS, expected to be completed by 2018.

Tax Deductions and Depreciation

• Deductible Expenses: Include normal business expenses, depreciation, losses, interest, wages, social security payments, and 50% of financial transactions tax.
• Interest Deductions: Limited to the maximum loan interest rate set by the Superintendent of Finance.
• Intangible Assets: Amortized over at least five years, with possible shorter periods justified.
• Tangible Assets: Fully depreciable for tax purposes. Estimated useful lives:
  • Motor vehicles and computers: 5 years (20% annual rate)
  • Machinery, equipment, boats, and aircraft: 10 years (10% annual rate)
  • Buildings: 20 years (5% annual rate)

Key Legal and Regulatory Framework

• Price Controls: Limited to select areas, with three categories: direct control, monitored price freedom, and special regimes.
• Intellectual Property: Protected by national laws and Andean Community decisions. Colombia adheres to WTO and WIPO standards.
• Monopolies and Restraint of Trade: Prohibited by the constitution, with antitrust laws in place to prevent market dominance abuse.
• Mergers and Acquisitions: Require notification or authorization depending on the size and market share of the involved companies.

Conclusion

Colombia offers a structured business environment with various legal and tax frameworks designed to attract foreign investment. The country provides tax incentives for priority sectors and has a complex but transparent system of accounting and compliance. The tax system is based on worldwide income for Colombian entities, with specific rules for foreign branches and entities. Exchange controls and price regulation are also in place to manage economic stability and market behavior.