<\/p>\n
<\/p>\n
Contributions of assets and rights held in Colombia to offshore trusts<\/strong><\/p>\n The Colombian Tax Code (the Code) specifically establishes that interests in foreign trusts are treated The contribution of assets or rights to a fiducia,[2]<\/em><\/strong> which has similar characteristics to the common-law Doctrine from the Colombian Tax and Customs National Authority[3]<\/em><\/strong> confirms that transfers of assets In cases where the rights of the beneficiaries are conditional, an irrevocable discretionary trust will be Contributions of property to revocable, non-discretionary trusts abroad will be deemed to be held by Characterisation of trusts held abroad versus regulations on CFCs or ECEs<\/strong><\/p>\n The settlor to the trust is deemed to have control over any companies or entities held through the In those cases, any passive income such as financial yield, rentals and sales of assets generating The new 2024 Decree<\/strong><\/p>\n The Colombian government has issued Decree 1496 of 13 December 2024, which updates the list of IHT rules<\/strong> ation treaties, the Colombian government also excluded a number of In the case of succession, rights and assets received from an inheritance or legacy will be taxed at the NET rules<\/strong><\/p>\n Under NET rules in Colombia, foreign trusts are treated as transparent entities, regardless of whether Any time the beneficiaries of a trust are subject to conditions and do not have title or the ability to Upon the settlor\u00b4s death, the succession that has not yet been liquidated or distributed will be liable [1]<\/em><\/strong> Paragraph 3, art.295-3 of the Code. [3]<\/em><\/strong> Opinion No. 034071 December 20th,2017 by the Doctrine Division of the Colombian Tax and <\/p>\n En cumplimiento de las disposiciones sobre el manejo de datos personales, REYES ABOGADOS ASOCIADOS S.A lo invita a comunicarse con nosotros en caso de no querer recibir nuestras actualizaciones legales. Este bolet\u00edn es un servicio de REYES ABOGADOS ASOCIADOS S.A., ha sido remitido de manera informativa sin el prop\u00f3sito de constituir orientaci\u00f3n o asesor\u00eda legal. Para casos espec\u00edficos, se recomienda contar con asesor\u00eda particular antes de tomar una decisi\u00f3n con base en la informaci\u00f3n aqu\u00ed contenida.<\/em><\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Contributions of assets and rights held in Colombia to offshore trusts The Colombian Tax Code (the Code) specifically<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-1024","post","type-post","status-publish","format-standard","hentry","category-legal-bulletin"],"_links":{"self":[{"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/posts\/1024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/comments?post=1024"}],"version-history":[{"count":7,"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/posts\/1024\/revisions"}],"predecessor-version":[{"id":1082,"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/posts\/1024\/revisions\/1082"}],"wp:attachment":[{"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/media?parent=1024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/categories?post=1024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.reyesaa.com\/en\/wp-json\/wp\/v2\/tags?post=1024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nas if they were rights in fiduciary agreements, for income tax purposes.[1]<\/em><\/strong><\/p>\n
\ntrust, is not subject to Colombian income tax, as long as the assets are transferred at cost value and
\nthe contributor\u2019s interest is valued for the same amount. Under the fiduciae rules, the transfer of
\nassets by a settlor does not generate the consequences of a transfer between two different parties.<\/p>\n
\nto irrevocable and discretionary trusts abroad excludes the contributor of the assets from qualifying as
\nowner of same for Colombian tax purposes, provided that the mentioned contributor is not entitled to
\nthe economic exploitation of the assets.<\/p>\n
\ntreated as an opaque entity and any earnings from local sources are taxable to the trust as an
\nindependent entity.<\/p>\n
\nthe settlor, who will be required to report the trust as his own property at the value equalling the cost
\nof underlying assets plus any profits during the year.[4]<\/em><\/strong><\/p>\n
\ntrust, whenever the trust holds more than 10 per cent interest on the company or entity, or whenever
\nthe latter is incorporated in a low-tax jurisdiction.<\/p>\n
\npassive income, which is earned by the Entidades Controladas del Exterior (ECEs), will be taxable in
\nColombia in the year that it was earned by the ECE. This will be the case irrespective of whether the
\nearnings are distributed back to the trust, from the trust to the settlor or whether these remain in the
\nECE.<\/p>\n
\nnon-cooperating jurisdictions, domains, territories and associated states.[5]<\/em><\/strong> Based upon the
\nnegotiation of exchange of informerating jurisdictions.[6]<\/em><\/strong><\/p>\n
\nThe Code regulates the taxation of inheritances,[7]<\/em> <\/strong>legacies and donations of rights and assets held by
\nColombian residents or those located in Colombia.<\/p>\n
\njurisdictions from its list of non-coop
\nCapital gains tax currently applies at a 15 per cent rate. The value of earnings or periodical rents from
\ntrusts and other similar vehicles, incorporated and\/or established in Colombia or abroad, paid to local
\nindividuals\u2019 resident in Colombia are subject to CGT.<\/p>\n
\nvalue that the assets and rights had on 31 December of the year prior to the liquidation of the
\nsuccession, or to the date the donation or the legacy was formalised.<\/p>\n
\nthey have an irrevocable or revocable, discretionary or non-discretionary nature.<\/p>\n
\nexercise control over the assets, the settlor is required to report the trust for the value of the
\nunderlying assets and pay the NET, which currently applies at a 1.5 per cent rate on the net value of the trust, as of 1 January each year.<\/p>\n
\nfor the relevant taxes and, when it is liquidated, the trust\u00b4s beneficiaries will be required to report
\ntheir share in the trust for NET purposes.<\/p>\n
\n[2]<\/em><\/strong> Fiduciary companies provide a variety of asset management services throughout the Colombian
\neconomy, such as payment administration, real estate, bursarial, and guaranty trustee.<\/p>\n
\nCustoms National Authority.
\n[4]<\/em><\/strong> The Colombian tax year is the same as its calendar year.
\n[5]<\/em> <\/strong>Svalbard Islands; Saint Pierre and Miquelon Islands; State of Kuwait; State of Qatar; Independent
\nState of Western Samoa; Qeshm, Pitcairn, Henderson, Ducie and Oeno Islands; Solomon Islands;
\nLabuan; Macao; Bahamas Commonwealth; Kingdom of Bahrein; Hashemi of Jordan Kingdom; Republic
\nof Guyana; Republic of Angola; Republic of Cape Verde; Marshall Islands Republic; Republic of the
\nMaldives; Republic of Liberia; Republic of Nauru; Republic of Trinidad and Tobago; Republic of
\nVanuatu; Republic of Yemen; Saint Helena, Ascension and Tristan de Cunha (British Overseas
\nTerritories); and the Sultanate of Oman.
\n[6]<\/em><\/strong> Antigua and Barbuda, State of Brunei Darussalam, Granada, Hong Kong, the Cook Islands,
\nCommonwealth of Dominica, Republic of Mauritius and Republic of Seychelles.
\n[7]<\/em><\/strong> Section 303 of the Code.<\/p>\n