On January 6, the Ministry of Finance launched a public consultation on three draft tax decrees. The first deals with tax standardization (for comments, click here). The second concerns indirect sales (comments received at the following link), while the third regulates undercapitalization (comments to be submitted by clicking here). All three drafts cover people subject to income tax operating with shares and investment funds. Comments may be submitted until January 18, 2020.
These documents are part of the Government’s strategy to regulate the 2010 Law of 2019, also known as the Economic Growth Law. The main points of the draft regulations are:
- Draft Decree regulating articles 53 to 60 of Law 2010 of 2019 and replacing Title 7 of Part 5 of Book 1 of Decree 1625 of 2016. It regulates the fiscal normalization tax, which will be applicable to those subject to income tax and will cover undeclared assets as of January 1, 2019. Foreign private interest foundations, foreign trusts, investment funds or any other foreign trust business will be included.
- Draft Decree regulating Article 90-3 of the Tax Statute and adding Chapter 26 to Title 1 of Part 2 of Book 1 of Decree 1625 of 2016. It establishes the mechanism for collection on assets which have been indirectly disposed of, including shares in companies, rights or assets located either in national territory or abroad. It also seeks to regulate the mechanisms for payment of these taxes when the funds come from a country with which Colombia has an agreement to prevent Double Taxation.
- Draft Decree regulating Articles 18-1, 23-1 and 368-1 of the Tax Statute and Article 66 of Law 2010 of 2019 and replacing articles of Part 2 of the Book of Decree 1625 of 2016. It seeks to combat tax evasion and abuse by defining taxpayers of a permanent nature, private capital funds and collective investment funds.