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TAX LIABILITIES OF COLOMBIAN TAXPAYERS IN REGARD TO TRUSTS CREATED ABROAD

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TAX LIABILITIES OF COLOMBIAN TAXPAYERS IN REGARD TO TRUSTS CREATED ABROAD

Income Tax

The Colombian Tax Authority referred to the liabilities taxpayers have to fulfill in regard to Trusts created abroad

 

Recently, the Colombian tax authority has concluded that Trusts have to be deemed as entities in Colombia for tax purposes. On this opportunity, by means of Revenue Ruling No. 0647 of 2018, the Tax Authority referred to the cases in which Colombian taxpayers have to declare the assets transferred to a Trust, as well as when they must declare the resources distributed by a Trust.

The Colombian Tax Authority concluded that a Colombia tax resident has to include the underlying assets of a Trust, when they have a real or potential economic exploitation of the asset, in accordance to section 263 of the Colombian Tax Code.

Additionally, taxpayers that receive benefits or resources from a Trust, have to include them as an item of income in his/her personal income tax return.