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DIAN REVENUE RULING

Withholding tax on royalty payments under the Double Taxation Agreement entered into between Colombia and Spain

DIAN Revenue Ruling No. 286 of April 7th 2016

 

The Colombian Tax Authority – DIAN, in interpretation of what is contained in the Double Taxation Agreement entered into between Colombia and Spain, held that payments made by a resident in Colombia to an effective beneficiary that is a Spanish resident, for the provision of legal services, should be characterized as consultancy services. Therefore, they would be subject to a withholding rate of 10% of the gross value paid. In this sense, DIAN revoked its Revenue Rulings No. 5838 of 2015.