CHANGES IN THE TAX CREDIT FOR TAXES PAID ABROAD
Corporate income tax purposes
New requirements in order to offset the tax credit for taxes paid abroad on worldwide-source income
The Financing Law bill will eliminate the time- restriction to offset tax credits. Tax credits may be carried forward to be offset in the following years, provided that it will not exceed the limits set-forth in section 259 of the Colombian Tax code.
With regard to the indirect tax credit on dividends derived from foreign entities, an additional requirement will be introduced: the taxpayer should request a statutory auditor certificate. The certificate must contain: (i) amount of the financial profit; (ii) amount of the tax profit if different; (iii) applicable tax rate in such jurisdiction; and (iv) the tax paid by the foreign entity.
Indirect tax credits will not be offset against worldwide-source income derived from portfolio investment or transactions in stock change markets with speculative purposes.