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Colombia

4 August 2015

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Colombia Modifies Financial Transactions Tax Exemption for Investment Transfers

The Colombian government recently published Decree 1489 of 2015 in the Official Gazette. The Decree modifies the financial transactions tax (GMF) exemption provided for transfers of investments or portfolios carried out by stock brokerages, trust companies and investment management companies.

According to the decree, the following transactions qualify for the GMF exemption, if the corresponding transfer is made for the same beneficiary:

  • Transfers made by entities qualified as distributors or administrators of collective investments, including omnibus accounts;
  • Transfers between accounts held by administrative entities of mutual funds and accounts held by providers of securities custodian services; and
  • Transfers between accounts held by entities under surveillance and accounts held by providers of securities custodian services

The types of investments that qualify include:

  • Securities registered with the National Registry of Securities and Issuers;
  • Securities registered with international registries;
  • Units of collective investment funds;
  • Commodities traded in agricultural stock exchanges, or other types of commodities, acquired directly or indirectly through mutual funds, trusts or other legal means;
  • Foreign currencies;
  • Deposit and savings certificates; and
  • Money market operations conducted through mutual funds, trusts or other legal means.

The current GMF rate is 0.4%. That rate will apply through 2018, and GMF will then be phased out by 2022, with a reduction to 0.3% in 2019, 0.2% in 2020 and 0.1% in 2021.

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