Colombia analyzes potential “international tax reform”

RIO DE JANEIRO, BRAZIL – General director of the National Tax and Customs Directorate (DIAN) Lisandro Junco said the government plans to improve collection mechanisms at a time when bolstering the Treasury’s coffers is a priority.

Junco stated that what is being considered is a potential international tax reform, particularly one that will have an impact on a number of multinationals operating in Colombia.

He said that one of the main areas of work is focused on strengthening the Colombian system in order to eliminate tax evasion, which is why electronic invoicing is crucial for the country.

Yet Junco also assured that the country still needs to define “the international tax reform.” In this respect, the official confirmed that there are ongoing discussions to determine where tax collection in the country can be improved and strengthened.

An example of this discussion includes proposals for Colombia to increase its revenues, at a time when resources will be needed to support recovery in 2022.

“We believe that a 20% tax for multinationals, which provide digital services, is very low. Colombia has just decided that, as a minimum, a 30% tax on residual income should be paid by multinationals that provide digital services in market economies, such as Colombia’s,” Junco explained.

Next week, the DIAN will appear before the Organization for Economic Cooperation and Development (OECD) to argue its position, Junco confirmed.

The official stressed that, within this government’s administration, initiatives have been taken to ensure that digital multinationals pay more taxes; in fact, more than 500 billion pesos (US$130 million) have been collected in this respect.

Several platforms have declared their position on such initiatives, saying that any proposal to increase taxes should be studied in terms of the impact on investment plans and job creation in Colombia.

For the full picture, see our Brazil Tax Reform: Complete Guide.