COLOMBIA Law and Practice Contributed by: Rodrigo Castillo Cottin, Ana María López and Alejandra Becerra, Rimon, P.C.
community of life does not automatically give rise to a patrimonial partnership or succession rights. For this reason, planning commonly involves formalising the union, defining the patrimonial regime, preparing wills and reviewing beneficiaries across financial assets, insurance policies and wealth planning structures.
Further to this, there is an annual registration require - ment. The entity must file a yearly online request to continue benefiting from the special tax regimen. Otherwise, it will be subject to the general corporate income tax rate (35% from FY 2023 onwards). Of the gifts made to entities operating under the spe - cial tax regime, 25% can be credited for income tax purposes. However, the above-mentioned requisites must be met. 10.2 Common Charitable Structures Entities approved by the CTO as eligible for the spe - cial tax regime are subject to income tax at a 20% rate. However, any income surplus is considered exempt, if the funds are destined directly or indirectly for programmes that develop the entity’s social pur - pose and meritorious activities. Any excess benefits or surpluses that are not reinvested in programmes that develop the entity’s social purpose are deemed as taxable for the next fiscal year.
10. Charitable Planning 10.1 Charitable Giving
The CTC establishes that non-profit corporations, foundations and associations are subject to a special tax regime with respect to income tax (20% rate) and complementary taxes, provided that they comply with the following conditions: • they are incorporated under Colombian law; • their main purpose and resources are directed towards health; primary education, formal educa - tion, college education or sports education; culture; scientific or technological advances; ecological research, environmental protection or social devel - opment programmes; • their activities are of general interest and may be freely accessed by the community; • their capital contribution or surpluses cannot be distributed; and • their surpluses are reinvested, in their entirety, in the activity of the entity’s corporate purpose and such corporate purpose corresponds to the activi - ties mentioned in the preceding clause.
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