Capital gains from the sale of shares in a private resident company by non-residents are taxed at the rate of 15% (increased from 10% effective from 1 January 2023).

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

• Gains from the alienation of immovable property situated in the other State;
• Gains from the alienation of shares or comparable interests deriving more than 50% of their value directly or indirectly from immovable property situated in the other State, except for shares substantially and regularly traded on a recognized stock exchange;
• Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State; and
• Gains from the alienation of shares in a company resident in the other State if the alienator, at any time during the 12- month period preceding such alienation, held directly or indirectly at least 10% of the capital of that company, with the tax limited to 10% of the net gain, and an exemption provided where the gains are derived in the framework of a tax-free reorganization of a company, a merger, a division, or a similar operation.

• Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

The standard withholding tax rate on dividends is 20% (increased from 10% effective from 1 January 2023), including on dividends received by permanent establishments in Colombia of foreign companies. The withholding tax applies on dividends paid out of profits generated in 2017 and subsequent years that are declared after 31 December 2018. If dividends are distributed from profits not taxed at the corporate level, the standard corporate tax rate applies, and after deducting such amount, an additional 20% (increased from 10% effective from 1 January 2023) is withheld.

0% if the beneficial owners is a pension fund or scheme, 5% if the beneficial owner is a company directly holding at least 20% of the paying company's capital; otherwise, 15%.

10%, with following exceptions:

• Interest beneficially owned by a Contracting State a territorial authority or a public law entity thereof, including the Central Bank of that State, or interest paid by a State, territorial authority, or public law entity;
• Interest beneficially owned by a pension fund or scheme;
• Interest paid on the sale on credit of industrial, commercial or scientific equipment, or on the sale on credit of goods or merchandise by an enterprise to another enterprise;
• Interest paid in respect of any loan or credit of whatever kind granted by a bank, but only if the loan or credit concerned is granted for a period of not less than three years; and
• Interest paid by a financial institution of a Contracting State to a financial institution of the other State.

10%

10%

10%

The treaty does not specifically deal with technical, management and similar service fees. In line with the OECD Model, this means that said services do not fall under the royalty article and do not attract the royalty withholding tax provided for under the treaty unless the services represent a minor part of a commingled transaction imparting in essence know-how. In that case, the services would follow the qualification of the principal component of the transaction, and may then attract the royalty withholding tax under the treaty. Otherwise, said services may be taxed in the source country only if the recipient has therein a (services) PE and the fees are attributable to that PE. Note, however, that not all countries would adhere to the OECD standpoint. ORBITAX has by default opted for the OECD position and the withholding tax rate is by default set to zero where the treaty does not specifically deal with technical, management and similar service fees. Where the relevant country has a developed policy regarding the treatment of technical, management and similar service fees and the correlation between those and royalties, ORBITAX has sought to cover this in Sec. 5.6. of the country chapters (Qualification of Specific Income Categories for Tax Purposes).

The treaty does not specifically deal with technical, management and similar service fees. In line with the OECD Model, this means that said services do not fall under the royalty article and do not attract the royalty withholding tax provided for under the treaty unless the services represent a minor part of a commingled transaction imparting in essence know-how. In that case, the services would follow the qualification of the principal component of the transaction, and may then attract the royalty withholding tax under the treaty. Otherwise, said services may be taxed in the source country only if the recipient has therein a (services) PE and the fees are attributable to that PE. Note, however, that not all countries would adhere to the OECD standpoint. ORBITAX has by default opted for the OECD position and the withholding tax rate is by default set to zero where the treaty does not specifically deal with technical, management and similar service fees. Where the relevant country has a developed policy regarding the treatment of technical, management and similar service fees and the correlation between those and royalties, ORBITAX has sought to cover this in Sec. 5.6. of the country chapters (Qualification of Specific Income Categories for Tax Purposes).