On 13 December 2022, the Colombian Congress approved Law 2277 of 2022 (tax reform law) which contains changes in the current tax regime. The main tax measures of the Tax Reform Bill are as follows:

Corporate Income Tax (CIT)

  • Although the general CIT rate (35%) is not modified, the financial institutions will be subject to surcharge at the rate of 5% (increased from 3%) for a period of 5 years from the fiscal year 2023 to 2027. The surcharge is applicable for the taxpayer with taxable income equal to or more than USD 1.1 million (approximately);
  • Natural resources exploitation sector will be subject to surcharge ranges between 5% to 15% applicable for the taxpayer with taxable income equal to or more than USD 470,000 (approximately);
  • Hydro energy generation sector will be subject to 3% surcharge from the fiscal year 2023 to 2026 applicable for the taxpayer with taxable income equal to or more than USD 280,000 (approximately);
  • The Law also introduces a minimum tax rate of 15% in line with OECD Pillar 2.
  • Hotel services and ecotourism and agrotourism parks will be subject to a special rate of 15% (increased from 9%) after meeting certain conditions. The rate is applicable for a period of 10 years from starting of the service;
  • The tax rate for the industrial users of the free trade zones (FTZs) will be 20%. The rate is applicable for the taxpayers agree with the Colombian export-oriented ‘internationalization plan’ in 2023 or 2024. Industrial users who have had a growth in their gross income of 60% in 2022 in relation to 2019 will apply the twenty percent 20% rate until the taxable year 2025. On the other hand, the qualified FTZs industrial users will be subject to the general CIT rate for the income earned from activities;
  • The capital gains tax rate is increased from 10% to 15%. Dividends paid to nonresident entities will be subject to a 20% withholding tax rate. For dividend distributions between resident companies, the withholding tax rate is increased from 7.5% to 10%;
  • Certain nontaxable income, exempt income, and tax credits will not exceed 3% of their annual taxable income. Moreover, Profits from the sale of shares listed on a Colombian Stock Exchange will be treated as non-taxable income when said sale does not exceed 3% of the outstanding shares.

Digital Service Tax (DST)

The Law introduces digital service tax applicable to specific services provided by non-residents to Colombian users.