Colombia’s 2010 Tax Reform Act

On December 30^th, 2009^, the Colombian Congress enacted the first tax reform act since 2006 (Tax Reform Act No. 1370-2009), adopting: (a) a new 2011 net-worth tax payable in installments from 2011 through 2014; (b) changes in the fixed assets investments deduction affecting all income taxpayers, including Free Trade Zones' income taxpayers eligible for the reduced 15% income tax rate; and (c) a clarification to the current rule deeming related party debt as equity.

(a) New 2011 Net-worth Tax. The 2010 tax reform act introduces a new "temporary" net-worth tax payable in installments from 2011 through 2014. This tax is almost identical to its predecessor 1.2% net-worth tax currently in force through fiscal year 2010.