The Colombian Tax Authority issued Official Tax Opinion No. 370 of 2020, which clarifies that profits distributed from a Colombian branch to its home office in Spain should not be considered “dividends” under the tax treaty between Colombia and Spain. Instead, such distribution should be considered a “business profit,” covered by Article 7 of the tax treaty, and generally not subject to taxation in Colombia.
Background
Colombia and Spain signed a treaty to prevent double taxation, which enter…