- The draft decree implements Law 2277 of 2022, which imposes a digital services tax on nonresidents with a significant economic presence (SEP) in Colombia and income from digital services in Colombia.
- Among other things, the draft decree allows nonresidents to elect to file a tax return and pay 3% tax on their digital services income, rather than 10% withholding tax.
- A nonresident’s ability to elect the 3% tax, rather than the 10% withholding tax, should not affect the deductibility of a Colombian taxpayer’s cross-border payment for Colombian tax purposes.
- Interested parties should consider submitting comments on the draft decree by July 15.
Source EY
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