Colombia has published Decree 1157 of 21 August 2020, which regulates the mega-investment project incentive regime that was first introduced by Law 1943 of 2018 and reintroduced by Law 2010 of 2019. The regime is available for qualifying investments in industrial, commercial, and/or service activities and provides for a reduced 27% corporate tax rate and tax stability contracts for up to 20 years, as well as exemptions from dividends tax and wealth (equity) tax, and accelerated two-year depreciation. For qualifying legal persons with hotel service income, however, such income is subject to tax at a 9% rate.
The main conditions for the regime include:
If an approved project subsequently fails to meet the conditions, the benefits are subject to recapture.
Further to the conditions above, it is also provided that projects related to the evaluation, exploration, and exploitation of non-renewable natural resources, such as the exploration, development, and construction of mines and oil fields, may not qualify for the mega-investment regime.