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Colombia Issues New Regulations on Tax Incentives for Investment in Non-Conventional Energy Sources — Orbitax Tax News & Alerts

Colombia has published Decree 829 of 10 June 2020, which provides new regulations for the tax incentives for investments in the promotion and development of non-conventional energy sources, especially those of a renewable nature. One of the key changes provide in Decree 829 is that eligible taxpayers making such investments may deduct from their annual income 50% of the total amount of the investment during a period of 15 years from the taxable year following that in which the investment is made. This was previously limited to 5 years.

Further, the Decree provides that the VAT exemption on the import and acquisition of certified machinery and equipment for projects also applies for machinery and equipment used for measuring and evaluating the potential of non-conventional energy sources. It is also provided that the customs exemption for machinery, equipment, materials, and supplies for non-conventional energy projects is limited to those that are not produced nationally and their only means of acquisition is through importation.