On 21 August 2020, the Colombian Ministry of Finance and Public Credit has published Decree 1157, through which the Government regulated one of the instruments that it created in the Economic Growth Law of December 2019, and which is part of the package of measures that seek to encourage efficiency mega-investments regime.
In article 67 of Law 1943 of 2018 (financing law) approved last December, it modifies article 235-3 of the Tax Statute establishing the following regarding the tax incentive for mega-investments within the national territory as follows:
- The income and complementary tax rate for taxpayers who make new investments, whether natural or legal persons, residents or non-residents, will be 27%. The above without prejudice to the income from hotel services, which will be taxed at the 9% rate.
- The taxpayers who make the new investments, whether natural or legal persons, residents or non-residents, may depreciate their assets in a minimum period of two (2) years, regardless of the useful life of the asset;
- The taxpayers who make the new investments are natural or legal persons, residents or non-residents, will not be subject to the presumptive income system enshrined in articles 188 and following of the Tax Statute;
- In the event that the investments are made through national companies or permanent establishments, the profits that they distribute will not be subject to dividend tax. When dividends or participations correspond to profits, which, had they been distributed, would have been taxed, they will be subject to the rate of 27% on the amount paid or credited to the account. The tax will be withheld at the source, on the gross value of payments or credits into account for dividends or participation;
- The Mega-Investment projects referred to in this article will not be subject to the wealth tax enshrined in article 292-2 of the Tax Statute or those that are created after the entry into force of this law;
- Additionally, a tax legal stability regime is created that will allow them to maintain the benefits in the event of unfavorable modifications to the regime in exchange for the payment of a premium of 0.75% of the value of the investment made each year for a period of 5 years.
