Colombia’s tax authority issued Official Tax Opinion No. 100208192-69 on 17 January 2025, providing clarification on the treatment of tax losses and corporate income tax-exempt dividends under the Colombian holding company (CHC) regime.
An exempt-interest dividend is a payment made to investors by a mutual fund that is not subject to federal income tax. These dividends are typically paid by funds that invest in municipal bonds.
Although exempt-interest dividends are exempt from federal income tax, they may still be subject to state income tax or the alternative minimum tax (AMT).
The opinion specifies that Colombian companies operating under the CHC regime can incur tax losses from their activities in Colombia under the corporate income tax (CIT) ordinary regime, while also receiving corporate income tax-exempt dividends from their foreign subsidiaries. These exempt dividends, which are considered tax-exempt under the CHC regime, will not be included in the CIT taxable base for the company’s ordinary activities in Colombia.
As a result, the corporate income tax-exempt dividends received from foreign subsidiaries will not reduce the tax losses incurred by the Colombian holding company.
