On December 30th, 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.

During the past years, cross border operations regarding mergers and spin offs between companies from around the world have increased considerably.

Through law 1258 of December 2008 Congress made one of the most substantial reforms in colombian commercial law. It created a new and innovative legal figure known as the Simplified Corporation.

After some years of only having the Andean Community (Peru, Bolivia, and Ecuador) treaty, Colombia keeps expanding the network of bilateral agreements intended to avoid double taxation.

In an effort to promote an increase in both domestic and foreign investment in 2005, Colombian Congress enacted the Investment Stability Act.

Colombia had two double taxation treaties, the first one with Spain, already approved by Congress through Act 1082 dated July 31, 2006, but pending favorable decision by the Constitutional Court about its constitutionality, and a second one with Chile, signed on April 19, 2007 and already presented to the Congress for its approval.

Congress Act 1328-2009, has authorized settlements of local taxes controversies, e.g., industry and commerce tax, property tax, registration tax, including any disputed penalties and interests.

Ratification notes of DTT with Spain were exchanged by both governments last 23 of July; thus it will enter into force on October 23, 2008 and will be applicable in 2009; DTTs with Chile and Switzerland are being discussed at Congress.

Since the execution of the income tax treaty with Spain that entered into force on October 2008, the first of its kind in the Country, Colombia has executed similar treaties, not yet in force, with Chile on April 2007, Switzerland on October 2007, Canada on November 2008, and with Mexico on August 2009.

Government regulated customs procedures of exports - new requirements were established for the Programs of Plan Vallejo of Raw materials; July 30 is the last day to present information on raw materials matters.

According to the most recent WTO figures, there are 174 Free Trade Agreements (FTAs) currently in force, part of a total of 297 regional trade agreements worldwide under the GATT MFN clause exception (Art. XIV GATT 1994).

With this new edition, we continue with our compromise to contribute and support the economic recuperation and business development, growing in the legal services we render focused on Customs and International Trade.

On December 29th, 2010 the 2011 Tax Reform Act No. 1430 was enacted, adopting material changes to the current Colombian tax framework.

For Colombian Tax purposes, the place of incorporation of a company and not the place of its effective management, will determine whether it is resident in Colombia or elsewhere.

As of January 1st, 2008, the general statutory corporate income tax rate is 33%. Unless otherwise provided, all Colombian and foreign entities subject to income tax in Colombia, including Colombian branches of foreign companies are subject to this 33% rate.

As of January 1st, 2008, the general statutory corporate income tax rate is 33%. Unless otherwise provided, all Colombian and foreign entities subject to income tax in Colombia, including Colombian branches of foreign companies are subject to this 33% rate.

Through the last major tax reform, contained in Law 1111 dated December 27, 2006 Congress decreased income tax rate to 33% as from 2008.

As of January 1st, 2008, the general statutory corporate income tax rate is 33 %. Unless otherwise provided, all Colombian and foreign entities subject to income tax in Colombia, including Colombian branches of foreign companies are subject to this 33% rate.

Unless otherwise provided, all Colombian and foreign entities subject to income tax in Colombia, including Colombian branches of foreign companies are subject to this 33 % rate.