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Colombia: Tax measures proposed in growth promotion bill

Colombia: Tax measures proposed, growth promotion bill

A bill submitted by the government to the legislature is intended to promote economic growth, and will also mitigate the effects of a decision by the Constitutional Court concerning the constitutionality of Law 1943 of 2018.

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The Constitutional Court (Corte Constitucional) in October 2019 issued a decision declaring as unconstitutional certain provisions of Law 1943 (the law introduced a set of tax provisions intended to improve the competitiveness of companies with certain tax incentives). Read an October 2019 report (Spanish and English) prepared by the KPMG member firm in Colombia.

The bill—Proyecto de Ley No. 278 de 2019—includes the similar items as found in Law 1943 but with certain adjustments.

With respect to taxation, the bill proposes changes that would retain the:

  • Progressive reduction of the corporate income tax rate
  • Ability to claim the amount of value added tax (VAT) paid with respect to the acquisition of capital goods as a tax credit
  • Ability to claim the amount of the industry and commerce tax paid during the year as a tax credit
  • Phase-out of the presumptive tax
  • Changes to the holding company regime rules
  • Modifications to the civil works for tax regime
  • Exemption from income tax for agricultural activities
  • Changes to the controlled foreign company (CFC) regime, the permanent establishment (PE) rules, and rules for indirect transfers of Colombian assets
  • Rules concerning the income taxation of individuals and the tax on dividends and the wealth tax


Read an October 2019 report (Spanish and English) prepared by the KPMG member firm in Colombia

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