The Colombian tax system is reformed by the Law No. 1607 of 2012 and it took effect from 2013.
The major changes are as below:
The reform introduces a new minimum tax (IMAN) that is a progressive flat tax based on the amount of income derived. The IMAN replaces the presumptive minimum income, which is currently calculated at the rate of 3% on the taxpayer’s net worth. The reform also introduces a new simplified minimum tax which applies to resident individuals who are employees and whose yearly gross income is less than 4,700 Tax Units (UVT).
The tax reform reduces the corporate income tax rate from 33% to 25% for resident companies and also introduces a domestic definition of the concept of resident companies and the concept of dividends. The general 33% rate of income tax is reduced to a 25% rate of income tax.
The capital gains tax rate is reduced from 33% to 10% both for residents and non-residents.
The reform includes the new general anti-avoidance rules aimed at combating abusive forms, agreements, or acts that lack economic substance or business purpose. Thin-capitalization rules are also introduced.
