The Colombian Government has introduced measures relating to corporate tax changes. For the purposes of corporate tax, it redefined the concept of permanent establishment.
Corporate income tax rate for companies and for non-resident companies generating income through a permanent establishment is reduced. The rate of corporate income tax is reduced to 25% from 33%.
The reduction in corporate income tax will however be offset for many taxpayers by the introduction of the new equality tax (CREE) at a rate of 9% for the calendar years 2013 to 2015 and 8% for subsequent years. The CREE is calculated on the basis of gross income less certain specified deductions and there is no deduction for current or accumulated net operating losses. The amount of CREE due may not be less than 3% of the taxpayer’s net equity as at 31 December immediately preceding the start of the relevant calendar year.
