CHANGES IN TAX LAWS
One of the important factors to established commercial relationships is the level of attractiveness that one country has in the consideration of other nations. So one important aspect is the law of tax, that according to the money that can represent the exportation and the importation of different companies and industries.
“Since January 2015 companies operating in Colombia have been challenged to a new tax reform. It seems to be a negative issue for foreign companies but it is necessary to take a look deeply to realize the real impact on multinational companies.
Lately, Latin American countries are in a constant battle to attract Foreign Direct Investment and Colombia has not been an exception being considered as an investment hub nowadays. Incentives such as 1429 law, which gives tax benefits in the first 5 years of operation, the attractiveness of the SAS type business entity, among others, have strengthened foreign investments”. (TFM GROUP, p.p 2)
According to the data that has been given taxes are given by the next norms: “This applies to all domestic companies and non-residents that hold wealth in Colombia equal to or exceeding 1 billion Colombian pesos (US$ 416,000) as of 1 January 2015. It will rise progressively at a rate of: n 1.15% for 2015 n 1% for 2016, and n 0.4% for 2017 for individual tax payers, the rate rises will range from 0.20% to 1.5% until 2018. Some double taxation agreements can affect wealth tax, as detailed in table 1 below”. (TFM GROUP, p.p 3)
There is also the norms that apply to different countries, so the implementation of the tax is different in each case.
Comparing Colombia with some other countries in Latin America, the commercial offer is attractive, according to the studies of the Oxford Business group when it affirms the next: “Colombia is one of the Latin American countries that offer the most opportunities for economic development and investment. In fact, the IMF classifies the country as the fourth-most-important economy in Latin America, and in 2015 Fortune magazine listed it as one of seven new destinations for investment, along with India, Indonesia, Malaysia, Mexico, Poland and Kenya”. (OXFORD BUSINESS GROUP)
So we can conclude that in Colombia´s case the actual changes that it has implemented in the commercial area has benefitted it’s relations creating a good image for the country, creating a good flow of the money in every sector.
BIBLIOGRAPHY
TMF GROUP. An overview of current tax reforms in Colombia. Febrero de 2015. [Consultado el 20 de agosto de 2016]. Disponible en:
OXFORD BUSINESS GROUP. Colombia's tax legislation and recent changes. [Consultado el 20 de agosto de 2016]. Disponible en: http://www.oxfordbusinessgroup.com/overview/levying-changes-look-colombian-tax-legislation-and-recent-adaptations
