Colombia's newest tax bill, enacted on December 29, 2016 through Law 1819 of 2016, modifies (among others) the following sections of the tax code, related to the transfer pricing regime:
|Section||Summary of changes|
|120||Limits royalty payments for the exploitation of intangibles developed in Colombia.|
|124-2||Establishes that payments to non-cooperating jurisdictions with low or no taxes or to entities that belong to a special regime are non-deductible unless they are in compliance with the transfer pricing regime and the withholding tax is applied when allowed by the tax code.|
|260-3||Requires the use of the Comparable Uncontrolled Price Method (CUP) when analyzing transactions that involve commodities.|
|260-5||Requires that financial information used in the preparation of supporting transfer pricing documentation must be signed by a legal representative, auditor and/or public accountant.|
|Requires that taxpayers meeting specific conditions must prepare a "master file" and "country-by-country report."|
|260-7||Modifies the term "tax haven" for "non-cooperating jurisdictions of low or no taxes" and "special regimes."|
|Establishes that the functions, assets, risks, costs and expenses incurred by entities located in certain jurisdictions through transactions must be documented even if they are considered non-deductible for income tax purposes.|
|260-8||Eliminates Section 260-5 as a reference, replacing it with Sections 260-1, 260-2 and 260-7.|
|260-11||Adds a sanction for not filing "supporting documentation" and modifies sanctions for late filing, inconsistencies, omissions and amendments.|
|Modifies sanctions for late filing, inconsistencies, omissions and amendments of the "informative return."|
|714||Modifies the statute of limitations for taxpayers filing income tax returns that need to comply with the transfer pricing regime to 6 years counted from the filing deadline.|
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