COLOMBIA Law and Practice Contributed by: Rodrigo Castillo Cottin, Ana María López and Alejandra Becerra, Rimon, P.C.
• In the case of non-corporate structures, the ultimate beneficial owner will, under certain cir - cumstances, be the settlor, trustee, beneficiary or anyone who possesses ultimate control. First submissions to the RUB had to be completed before 31 July 2023 for legal entities/structures estab - lished before 31 May 2023. New legal entities or non- corporate structures established after 31 May 2023 must comply with the report within the two months following their inscription or obtaining their tax ID. Information provided to the RUB must be updated (if applicable) on the first day of January, April, July and October every fiscal year. Failure to comply with the reporting obligations, or submitting incompletely or with errors will trigger penalties for the required tax - payers. This information will not be available to the public, but as set forth in Law 2195 of 2022 there will be some government entities that, in compliance with their legal and constitutional functions, will have guaranteed access to the information contained in the RUB (ie, the CTO, the Public Prosecutor’s Office, the General Comptroller’s Office, the Superintendence of Compa - nies and Superintendence of Finance, among others). Rules Against Tax Haven Practices The national government enacted Decree 1966 of 2014 and Decree 2095 of 2014, which established the official list of jurisdictions that are deemed as low-tax jurisdictions for Colombian tax purposes. Angola, Antigua and Barbuda, Qatar, Kuwait, Hong Kong, Trinidad and Tobago, Seychelles, Yemen, Leba - non and Bahamas, among others, were included in the official list. The Colombian government may review and modify the list of low-tax jurisdictions pursuant to the criteria contemplated in Article 260-7 of the CTC to determine if any current jurisdictions may be excluded or if addi - tional jurisdictions need to be included. This list has not recently been updated. Anti-Abuse Rules Article 869 of the CTC established a tax anti-abuse rule. This rule allows the CTO to re-characterise or
reconfigure any operations or series of operations that may constitute abuse for tax purposes and disregard their effect. Conduct is considered abusive if: • the transaction is not reasonable from a commer - cial and economic perspective; • a high tax benefit is achieved but is inconsistent with the risks undertaken by the taxpayer; and • the execution of a structurally correct legal act or business is apparent, but its content hides the true will of the parties. The process of re-characterisation or reconfiguration of a potentially abusive operation would have to be initiated by the CTO within the term of expiration of the statute of limitation of the corresponding tax return. Relevant definitions and procedures applicable to the CTO in order to apply tax anti-abuse rules are estab - lished in Resolution 4 of 2020. 2. Succession 2.1 Cultural Considerations in Succession Planning Most Colombian companies are family-owned. These companies are usually founded and managed by a matriarch or patriarch. Other family members carry out other high management roles in the company. In most cases, the matriarch/patriarch is unwilling to turn over wealth and grant control to younger generations until their passing, or until they are no longer capable of handling the company’s affairs. As Colombia has forced heirship rules forcing the testator to assign certain compulsory portions, appli - cable to half of their estate, even against their will, Colombian families are constantly concerned about implementing estate and succession planning solu - tions to ensure a successful turnover of wealth, allow - ing the family estate to increase in value over time. 2.2 International Planning Colombian families have become increasingly global. This situation has created various challenges when transferring wealth to family members, as Colombian
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