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.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.