Emerging Markets Rates and Currencies Handbook

81 Citi | Emerging Markets Currencies Handbook 2021 Colombia Item Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equity W/H Tax 20% WHT if tenor < 360 days 15% WHT if tenor > 360 days Export financing exempt Import financing: • 0% if <180 days; • 20% if between 180 and 360 days; • 15% if > 360 days 20% WHT if tenor < 360 days 15% WHT if tenor > 360 days Export financing exempt Import financing: • 0% if <180 days; • 20% if between 180 and 360 days; • 15% if > 360 days No WHT Onshore: 2.5% WHT Offshore: No WHT 7.5% WHT on dividends Deductibility of interests Interest is deductible, unless D/E > 2x Transfer Pricing rules apply (i.e. arms length rule) Interest is deductible. Thin cap does not apply, including loans with related party guarantee Banking certification required Fully deductible Banking certification required Onshore: Fully deductible Offshore: Limited to 15% of net income before tax Transaction needs to be directly related to “income producing activity” N/A Deductibility of FX losses Fully deductible if loan is directly related to ”income producing activity See above N/A Other taxes, duties 0.4% debit tax, unless the funds payable to a bank via USD offshore account (cuenta de compensación) 0.4% debit tax 0.4% debit tax 0.4% tax if funds transferred from brokerage account to 3rd party Comments N/A N/A N/A OTC derivatives may only be closed with banks N/A Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources. Subsidiary Funding — Tax Consideration Tax Summary — Colombia