{"id":51854,"date":"2025-09-05T10:30:30","date_gmt":"2025-09-05T10:30:30","guid":{"rendered":"https:\/\/my.legal500.com\/developments\/?post_type=legal_developments&p=51854"},"modified":"2025-09-05T10:31:01","modified_gmt":"2025-09-05T10:31:01","slug":"colombian-wealth-tax-planning-opportunity-under-the-can-framework","status":"publish","type":"legal_developments","link":"https:\/\/my.legal500.com\/developments\/thought-leadership\/colombian-wealth-tax-planning-opportunity-under-the-can-framework\/","title":{"rendered":"Colombian Wealth Tax Planning Opportunity Under the CAN Framework"},"content":{"rendered":"

By Catalina Jaramillo, Daniel Duque, and Andr\u00e9s Hern\u00e1ndez, Partners, and Jos\u00e9 Manuel Garc\u00eda, Associate, Tax Practice, Brigard Urrutia<\/em><\/strong><\/p>\n

In brief:<\/strong><\/p>\n

In the increasingly complex arena of international taxation, one ruling by the Andean Court of Justice (TJCA) could significantly reshape how Colombia\u2019s wealth tax (WT) applies to assets located in Bolivia, Ecuador, and Peru. For high-net-worth individuals and some investors, this interpretation offers both an opportunity and a cautionary roadmap for cross-border structuring within the Andean Community of Nations (CAN).<\/strong><\/p>\n

<\/p>\n

In today\u2019s globalized economy, jurisdictions compete aggressively for the right to tax assets\u2014debating not only how<\/em> to tax, but also who<\/em> has the primary authority to do so. The Colombian wealth tax\u2014reintroduced by Congress in 2023 after several previous iterations\u2014targets the worldwide net worth<\/strong> of tax resident\u2019s individuals, regardless of asset location. This approach aligns with a regional trend driven by the digitalization and high mobility of financial assets, which now comprise a substantial portion of global wealth.<\/p>\n

The taxable event is triggered by the possession of net assets as of January 1 each year, exceeding COP 3,585,528,000 (approximately USD 876,000). Rates range from 0.5% to 1.5%, depending on the net assets.<\/p>\n

Historically, both individuals and corporations have responded to the WT by adopting complex corporate structures to re-domicile assets and optimize tax exposure. Nowadays the Colombian WT only applies to individual.<\/p>\n

Colombia has addressed some of these scenarios through bilateral double taxation treaties (DTTs) with jurisdictions such as Spain, Mexico, and France. However, the position of CAN member states\u2014Bolivia, Ecuador, and Peru\u2014remained unclear.<\/p>\n

This lack of clarity led to numerous disputes, as tax authorities claimed the right to tax and audit assets located in other CAN states that did not impose a wealth tax. A recent TJCA ruling has now brought greater certainty, making Colombia a more attractive environment for regional investment.<\/p>\n

Key Takeaways from the TJCA ruling<\/strong><\/p>\n