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DIAN REVENUE RULING

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DIAN REVENUE RULING

Tax treatment of dividends distributed by entities incorporated in states members of the Andean Community – CAN

DIAN addressed a case in which a Colombian company receives dividends from an entity domiciled in a CAN member state and distributes those dividends, un-taxed, to an entity located in a non-member state

 

By means of its Revenue Ruling No. 1679 of 2016, DIAN disputed the possibility of adding the value of the dividends received from entities located in countries that are part of CAN, to the dividends to be distributed un-taxed to shareholders domiciled in non-CAN states.

This treatment is only possible when the shareholder is located in a member state. Otherwise, a shareholder located in a state that is not a part of the CAN Treaties will result being benefited with the tax treatment that is expressly agreed upon between member states.