Global forum on transparency and exchange of information for tax purposes peer reviews. Phase 1, Legal and regulatory framework, April 2014 (reflecting the legal and regulatory framework as at January 2014) : Columbia 2014.

91 Pages·2014·3.888 MB·English

by  OECD

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 1: COLOMBIA
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 100 jurisdictions which participate in the work of the Global Peer Review Report
Forum on an equal footing.
Phase 1
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These
standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange of Legal and Regulatory Framework
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant COLOMBIA
information for the administration or enforcement of the domestic tax laws of a requesting
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must
be provided, including bank information and information held by fi duciaries, regardless of the
existence of a domestic tax interest or the application of a dual criminality standard. P
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All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as r R
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 ev
reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange iew
of information, while Phase 2 reviews look at the practical implementation of that framework. R
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Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. po
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The ultimate goal is to help jurisdictions to effectively implement the international standards t P
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of transparency and exchange of information for tax purposes. a
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All review reports are published once approved by the Global Forum and they thus represent 1
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agreed Global Forum reports. e
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For more information on the work of the Global Forum on Transparency and Exchange of l a
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Information for Tax Purposes, and for copies of the published review reports, please visit d
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www.oecd.org/tax/transparency and www.eoi-tax.org. e
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This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and M
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ISBN 978-92-64-21016-5
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23 2014 07 1 P

Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Colombia
2014
PHASE 1:
LEGAL AND REGULATORY FRAMEWORK
April 2014
(reflecting the legal and regulatory framework
as at January 2014)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect
theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor
thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof
orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand
boundariesandtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2014),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:Colombia2014:Phase1:LegalandRegulatoryFramework,OECDPublishing.
http://dx.doi.org/10.1787/9789264210301-en
ISBN978-92-64-21016-5(print)
ISBN978-92-64-21030-1(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
ISSN2219-4681(print)
ISSN2219-469X(online)
CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/publishing/corrigenda.
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TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum                                             5
Executive Summary                                                 7
Introduction                                                       11
Information and methodology used for the peer review of Colombia         11
Overview of Colombia                                             12
Recent developments                                               17
Compliance with the Standards                                       19
A. Availability of Information                                        19
Overview                                                        19
A1 Ownership and identity information                               20
A2 Accounting records                                            42
A3 Banking information                                           47
B. Access to Information                                            49
Overview                                                        49
B1 Competent Authority’s ability to obtain and provide information        50
B2 Notification requirements and rights and safeguards                  57
C. Exchanging Information                                          59
Overview                                                        59
C1 Exchange-of-information mechanisms                             60
C2 Exchange-of-information mechanisms with all relevant partners        68
C3 Confidentiality                                                69
C4 Rights and safeguards of taxpayers and third parties                  72
C5 Timeliness of responses to requests for information                   74
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – COLOMBIA © OECD 2014
4 – TABLE OF CONTENTS
Summary of Determinations and Factors Underlying Recommendations    77
Annex 1: Jurisdiction’s Response to the Review Report                   79
Annex 2: List of all Exchange-of-Information Mechanisms in Force        80
Annex 3: List of all Laws, Regulations and Other Material Received       85
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – COLOMBIA © OECD 2014
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
120 jurisdictions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transpar-
ency and exchange of information for tax purposes These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commen-
tary as updated in 2004 The standards have also been incorporated into
the UN Model Tax Convention
The standards provide for international exchange on request of fore-
seeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed This process is
undertaken in two phases Phase 1 reviews assess the quality of a jurisdic-
tion’s legal and regulatory framework for the exchange of information, while
Phase 2 reviews look at the practical implementation of that framework Some
Global Forum members are undergoing combined – Phase 1 and Phase 2 –
reviews The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitor-
ing of jurisdictions following the conclusion of a review The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to wwwoecdorg/tax/transparency and
wwweoi-taxorg
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – COLOMBIA © OECD 2014

ExECUTIVE SUMMARY – 7
Executive Summary
1 This report summarises the legal and regulatory framework for trans-
parency and exchange of information in Colombia The international standard
which is set out in the Global Forum’s Terms of Reference to Monitor and
Review Progress Towards Transparency and Exchange of Information, is con-
cerned with the availability of relevant information within a jurisdiction, the
competent authority’s ability to gain timely access to that information, and in
turn, whether that information can be effectively exchanged with its exchange
of information (EOI) partners The recommendations that have been made
concern the scope of attorney-client privilege and the expeditious ratification
of EOI agreements with all relevant partners
2 Colombia is a country of 471 million inhabitants covering 1 138 910
square kilometres in north-western South America Colombia’s GDP, which
amounted to approximately USD 511 billion in 2012, has grown more than
4% per year for the past three years, continuing almost a decade of strong
economic performance Colombia is rich in natural resources, its main exports
including petroleum, coal, coffee and other agricultural products Colombia
has signed one Tax Information Exchange Agreement (TIEA) and nine Double
Tax Conventions (DTCs) In addition, it is also a signatory to the Andean
Community Directive which contains certain DTC like provisions including
one which provides for the exchange of information in tax matters, and the
multilateral Convention on Mutual Administrative Assistance in Tax Matters
3 Relevant legal entities in Colombia include: joint stock companies,
simplified stock companies, partnerships limited by shares, collective
partnerships, SRLs and limited liability partnerships Whilst trusts are not
recognised in Colombia, there is the possibility of establishing a Fiducia
Mercantil or to transfer property by means of a Fideicomiso, both of which
have certain trust like characteristics Obligations to ensure availability of
ownership and identity information exist for all of the above named entities
There is no prohibition for a Colombian resident to act as a trustee for a for-
eign trust or for a foreign trust to invest in Colombia Colombian authorities
have reported that to date they have not encountered any incidence of foreign
trusts However, in the case that a Colombian resident were to act as a trustee
for a foreign trust or if a foreign trust were to invest in Colombia, there is a
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – COLOMBIA © OECD 2014
8 – ExECUTIVE SUMMARY
combination of requirements under the Commercial Code, the Tax Statute
and the regulatory laws in place ensuring the availability of trustee, settlor
and beneficiary ownership information in all cases Foundations are possible
in Colombia but may only be formed as not for profit entities
4 All relevant entities are subject to the provisions of the Commercial
Code, which requires all “merchants” (Commercial Entities) to maintain a
full range of accounting records, including underlying documentation for a
period of ten years
5 Full bank information, including all records pertaining to account
holders as well as related financial and transaction information, is required
to be kept by Colombian banks under AML legislation
6 Colombia’s competent authority is the Minister for Finance who
delegates this power to the Commissioner of the National Tax and Customs
Directorate (DIAN, Dirección de Impuestos y Aduanas Nacionales) The
DIAN has significant information resources at its disposal, including owner-
ship, identity, banking and accounting information
7 In respect of access to information, the DIAN is invested with broad
powers to compel the provision of any information not already contained in
its possession These measures can be used for EOI purposes in the same
way as for domestic purposes Enforcement of these provisions is secured by
the existence of significant penalties for non-compliance Whilst there are
statutory provisions in place protecting the disclosure of banking information
in Colombia, these can be overridden for the purposes of accessing informa-
tion for EOI purposes and do not restrict the tax authorities’ access powers
or prevent effective exchange of information The scope of attorney-client
privilege is not clear in Colombia and may extend beyond that provided for in
the international standard
8 Colombia has a wide EOI network covering 80 treaty partners
and 12 EOI mechanisms comprised of one TIEA, 9 bilateral DTCs and
one directive containing EOI provisions which facilitates the exchange of
information in tax matters between members of the Andean Community
In addition, Colombia became a signatory to the multilateral Convention on
Mutual Administrative Assistance in Tax Matters in May 2012 (Multilateral
Convention) Six of these agreements are in force and of these six, five meet
the internationally agreed standard containing sufficient provisions to enable
Colombia to exchange all relevant information However, it is noted that the
timeframe to bring the treaties signed into force can in some cases take sev-
eral years and Colombia should ensure the ratification of its signed treaties
expeditiously Element C1 was found to be in place
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – COLOMBIA © OECD 2014