On 22 October 2019, the Colombian Government submitted a new tax reform bill to Congress that will replace tax reform bill 2019 (Law No. 1943 of 2018). The tax reform bill 2019, which came into force on 1 January 2019, is invalid due to procedural flaws as stated by Colombian Constitutional Court.
Key amendments of the bill are as follows:
- reduction of corporate income rate;
- increase of individuals tax rate;
- VAT;
- thin capitalization rules;
- real estate excise tax;
- equity tax;
- simplified tax regime;
- indirect transfer rules;
- investment regime;
- holding company regime;
- increase of tax on dividends;
- exemption of income; and
- foreign tax credit.
The previous bill will remain in force until 31 December 2019. The new tax reform bill will be effective from 1 January 2020, if enacted by 31 December 2019.
