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Colombia: dividend tax introduced

 

The Law 1819 of 2016 , adopting a structural tax reform, introduced a dividend tax on profits derived as from 1 January 2017, as follows:

 

(1) Nonresident companies

 
  • Five percent final withholding on nontaxable dividends
  • Thirty-five percent final withholding on taxable dividends

(2) Resident individuals

 

Dividends received by resident individuals are subject to the following rates:

 

Type of dividend

Dividend amount

Rate (%)

Nontaxable dividends

Up to 600 tax value units (TVUs)

0

 

600 TVUs–1,000 TVUs

5

 

Over 1,000 TVUs

10

Taxable dividends distributed by a resident company

Any amount

35

Dividends distributed by a nonresident company

Any amount

35

(3) Nonresident individuals

  • Five percent final withholding on nontaxable dividends
  • Thirty-five percent final withholding on taxable dividends

Note: Nontaxable dividends are dividends derived from profits that have been subject to income tax at the level of the resident company distributing the dividends.

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