The corporate tax rate in Columbia is 34% in 2017 (raised from 25% in 2013 to 2016). The standard rate for resident companies and permanent establishments is 34% for 2017 and 33% for 2018 and onwards. In addition, there is a temporary income tax surcharge of 6% for 2017 and 4% for 2018 on net income exceeding COP 800 million. Colombia uses a presumptive income system to determine minimum tax. Under this system, corporations pay the greater of their tax liability calculated under the standard method/rates, or the amount determined by applying the general tax rate to a presumptive income of 3.5 percent of net worth in the year immediately preceding the current tax year. As of January 1, 2017, the Special Tax Regime Small Companies is discontinued for companies that have not already operating under the regime.
Colombian legislation does not refer directly to the use of the OECD Transfer Pricing Guidelines. Nevertheless, it is important to note that the Constitutional Court (Corte Constitucional, in Spanish), in its ruling C-690 from 2003, concluded that it is important to consider the guidance of the OECD Transfer Pricing Guidelines in a field as technical as transfer pricing since. According to the ruling, for the application of the arm’s length principle “the OECD Transfer Pricing Guidelines constitute a valuable tool in a changing and complex issue as transfer pricing is”. Therefore, the use of the OECD Transfer Pricing Guidelines is permitted as an interpretation tool and does not limit the faculty the tax administration has to use them as a technical supporting tool.