Colombia Forum

fecherklyn
Joined 2015
Posts: 1383

3 years ago

Double taxation with effect Jan 1, 2020

3 years ago

I am a tax resident in Colombia, retired and receiving several pensions from several nations outside Colombia, so why am I posting today? Because once again the latest tax year is nearly over and I am already starting to prepare the documentation needed to support my 2020 tax declarations. For this reason, I have had to delve into the relevant Avoidance of Double Taxation Agreements to see if anything new has arisen that could concern me…….and Yes, there has; the UK/Colombia and France/Colombia agreements have finally received the ultimate ratifications and they both take effect from 1 January, 2020.

Sorry for USA forum members, but what I have to say does not directly concern you as, to the best of my knowledge, no USA/Colombia Double Taxation agreement exists at the moment, but what the other agreements have to say may interest you as they are all virtually identical (down even to the same article numbers and based on the standard OECD model) and one might wonder if any eventual convention between the USA and Colombia may lead to some conformity?

Here are a couple of extracts from the British and French agreements:

Article 11 - INTEREST INCOME: Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. Despite this rule, the Contracting State making the interest payment may ALSO levy tax on the interest payment (a withholding tax, or retention) but this will be limited to a maximum of 10 cent.

Article 17 – PENSION INCOME: Pensions and other similar remuneration paid to a resident of a Contracting State shall be taxable only in that State.

Thus, with effect 01/01/2020, incomes, including pensions, paid outside Colombia to expats residing for tax purposes in Colombia will become liable for taxation in Colombia and any taxes deducted at source by the paying nation can be used as a tax credit in their Colombian tax declaration.

That is what these agreements say; don’t blame me.

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