COLOMBIA Law and Practice Contributed by: Rodrigo Castillo Cottin, Ana María López and Alejandra Becerra, Rimon, P.C.
1.5 Stability of Tax Laws On average, Colombia has a tax reform every two years. This situation leads to great uncertainty and taxpayers are obliged to review their structures regu - larly. Fear of tax uncertainty leads many taxpayers to consider implementing estate-planning structures located in jurisdictions with greater legal stability or that have an enforceable investment protection treaty with Colombia. 1.6 Transparency and Increased Global Reporting Regarding any real or perceived abuses/loopholes in tax laws, the OECD has praised Colombia for its high level of commitment to the international standard for transparency and exchange of information. After an assessment of the domestic legal framework by the OECD, Colombia obtained an overall rating of “com - pliant”, due to its legal provisions on financial informa - tion and its widening network of treaties on exchange of information. On 25 May 2018, OECD countries agreed to invite Colombia to join the OECD as a member of the organi - sation after subjecting it to in-depth reviews by 23 OECD committees, and the introduction of major reforms seeking to align its legislation on taxation, anti-bribery, and trade and labour issues, among oth - ers, to OECD standards. On 28 April 2020, Colombia officially became the 37th OECD member country. Colombia has achieved tax transparency and met global reporting requirements using the following framework. Exchange of Information Colombia has entered into several agreements for the exchange of tax information. For a list of countries with which Colombia has agreed to share information under the Common Reporting Standard (CRS), see the OECD website. According to the OECD’s latest status report in Janu - ary 2025, a total of 122 jurisdictions have committed to implementing the Automatic Exchange of Informa - tion (AEOI) standard with exchanges commencing by 2025 at the latest. Five of these jurisdictions (Armenia, Morocco, Rwanda, Senegal, and Uganda) are sched -
uled to commence their first exchanges during 2025. Furthermore, this number is expected to grow to 125 with the inclusion of three more jurisdictions in 2026, and will reach a total of 127 by 2027. FATCA In relation to the exchange of information, the Colom - bian and US governments have an enforceable Inter - governmental Agreement Model 1 (IGA), within the framework of Law 1666 of 2013, which made the For - eign Account Tax Compliance Act (FATCA) mandatory for Colombian financial institutions and taxpayers. The IGA was implemented by means of Resolution 60 of 2015, issued by the Colombian Tax Office (CTO). Ultimate Beneficial Ownership Taxpayers are required to identify and report to the CTO the ultimate beneficial owner of legal entities and non-corporate structures such as trusts and other fiduciary businesses, collaboration agreements, pri - vate capital funds and pension funds. The tax reform enacted in September 2021 (Law 2155) included some changes to the definition of the ulti - mate beneficial owner, incorporating a broader defini - tion in the case of non-corporate structures, in which settlors, trustees, fiduciary or financial committees, and conditioned beneficiaries, among others, may be deemed ultimate beneficial owners for the purposes of the aforementioned report. Law 2155 of 2021 also created the Beneficial Owners Registry ( Registro Úni- co de Beneficiarios Finales or the “RUB”) in order to regulate the taxpayers who are obliged to report infor - mation about ultimate beneficial owners and manage said information. For the purposes of the RUB, the definition of ultimate beneficial owners will depend on which subject pro - vides the report, as follows. • For legal entities, the ultimate beneficial owner will be the shareholder who directly or indirectly, individually or jointly, controls 5% or more of the voting rights or economic benefits. In the event the ultimate beneficial owner cannot be identified, the legal representative or general manager will be regarded as the ultimate beneficial owner.
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