COLOMBIA Law and Practice Contributed by: Rodrigo Castillo Cottin, Ana María López and Alejandra Becerra, Rimon, P.C.
established pursuant to Law 526 of 1999 and Law 1121 of 2006. Under this framework, financial enti - ties supervised by the Superintendencia Financiera de Colombia are required to implement a comprehen - sive risk management system aimed at preventing and detecting money laundering and the financing of ter - rorism. As part of their SARLAFT obligations, these entities must apply enhanced due diligence (know- your-customer or KYC) procedures to identify and report to the Financial and Information Analysis Unit ( Unidad de Información y Análisis Financiero , or UIAF) the ultimate beneficial owners of their clients, under - stood as the natural persons who ultimately own or control, directly or indirectly, a given entity or structure. This includes the obligation to detect and report sus - picious transactions to the UIAF, as well as to maintain adequate records and documentation supporting the identification of the beneficial ownership chain. 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. • 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 the submission of incomplete or erroneous reports will trigger penalties for the tax - payers concerned. 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, the Seychelles, Yemen, Lebanon and the 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.
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