Withholding tax rates on dividends

We share the following table to consult the tax impact of the decisions on dividend distributions currently being adopted at company meetings:

Payer

Receptor

Dividend quality

Withholding tax rate

Comments

National Society

Natural Person or Unliquidated Succession resident in Colombia

INCRNGO

  • 0% (de 0-1.090 UVT’s)
  • 15% (>1.090 UVT´s)

 

  • This withholding may only be imputed by the resident individual.

 

 

  • A 19% tax discount will apply when the dividend exceeds 1,090 UVTs.

 

  • The transition rule is maintained with respect to dividends from profits generated in 2016 and prior years.

National Society

Natural person or non-resident unliquidated succession or foreign companies and entities not domiciled in Colombia.

INCRGO

20%

  • The withholding shall be attributable to the resident individual or to the investor residing abroad.

National Society

National Society

INCRNGO

10%

 

  • It is payable only on the first distribution and is transferable to the ultimate beneficial shareholder.

 

  • It is not incurred in corporate groups and companies in a situation of registered control. It is also not applicable in CHC.

National Society

Permanent establishment of a foreign company.

INCRNGO

20%

  • The issue of how a PE can be a shareholder of a company is questionable.

 

  • It does not apply to PEs of individuals or other types of entities.

Foreign Company

National Company or Entity

Taxable Income

N/A

  • The dividend will be taxed at a rate of 35% (Art. 240 ET).

National Society

National entity of a non-corporate nature

Income taxed according to the recipient's qualifications.

 

N/A

  • There is a gap in the current legislation.

 

  • It will be subject to the tax applicable in the corresponding tax regime.

National Society

Company or Entity covered by a first-generation ICD

N/A

  • 5% of the gross amount of dividends 0% if the beneficial owner ("BE") is a company that owns directly or indirectly at least 20% of the capital of the company.
  • Reference is made here to the case of the Colombia/Spain DTA.
  • For this to apply, the BE of the dividends must be a Spanish tax resident.
  • In application of the protocol, the withholding tax on dividends from taxable profits of the partner can be reduced to zero, if they are invested in the same productive activity for a term of 3 years.

National Society

Company or Entity covered by a first-generation ICD

N/A

  • 5% of the gross amount if the BE is a company (other than a partnership) that directly owns at least 20% of the capital of the company paying the dividends.
  • 5% if it is a recognized pension fund.
  • 15% in other cases.
  • Reference is made here to the Colombia/Italy DTA.
  • These rules apply only if the BE is a resident of a contracting state.
  • It does not apply to dividends paid out of profits that have not been subject to tax (these will be subject to 15% withholding tax).

National Society

Company or Entity domiciled in a CAN country

N/A

20%

  • It is only taxed at the source (the withholding will end up being the tax). The income in the country of residence will be understood as "exempt income".

Document

Tarifas-de-retención-en-la-fuente-sobre-dividendos-ING.pdf

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