Colombia

Branch income is taxed at the general income tax rate (35%).

The branch taxable base is no longer limited to domestic income. From 2019 onwards, the branch taxable base corresponds to worldwide profits attributable to the branch.

Branches are required to prepare an attribution study (in addition to transfer pricing compliance requirements) with a functional and technical analysis of the assets, liabilities, capital, risks, income, cost, and expenses attributable to its business in Colombia.

In addition, for tax purposes, the branch must prepare separate accounts in order to record income and capital gains attributed to it.

Branch profit distribution is categorised as a dividend; consequently, if profits are taxed at the branch level, dividend tax is applicable. If not, an equalisation tax at the general CIT rate of the year of the distribution (35%) plus the dividend tax (20%) are applicable upon dividend distribution. The above-mentioned treatment could be changed if treaty relief is available (to be reviewed on a case-by-case basis).