background image
5.5. Source Rules with Respect to Income Derived by Non-Residents

As a general rule, income derived from the exploitation of tangible and intangible assets within the country and from the rendering of services within Colombian territory, temporarily or permanently is deemed to be derived from Colombian sources.

Also, income derived from the disposal of tangible and intangible assets that are within the country at the time of disposal and from real estate property located in the country, such as rental income, are domestic income.

Specific rules determine the source of income to be in Colombia in the following cases:

  • Income derived from interest on loans held in the country or economically linked to it (interest derived from temporary loans in the importation of goods and bank overdrafts are excluded.
  • Income arising from wages, commissions, fees, compensation for cultural, artistic, sporting and similar activities or the rendering of services by legal entities when the work or activities are developed within the country.
  • Income derived from the rendering of personal services paid by the Colombian State,irrespective of the place where the services have been provided.
  • Benefits or royalties of any kind from the exploitation of all kinds of industrial property, or "know how", or the provision of technical assistance, whether they are supplied from abroad or in the country. Also, profits or royalties derived from the exploitation of literary, artistic and scientific property in the country.
  • The provision of technical services, technical assistance services and consulting services whether they are supplied from abroad or at home.
  • Dividends distributed by Colombian companies domiciled in the country.
  • Dividends or participation interest of Colombian residents, derived from foreign companies or entities that directly or indirectly conduct business or investments in the country.
  • Income derived from annuity contracts, if the beneficiaries are resident in the country or if the price of rent is economically tied to the country.
  • Profits from exploitation of farms, mines, forests and natural deposits located within the national territory.
  • Profits from manufacturing or industrial processing of goods or commodities within the country, irrespective of the place of sale or disposal.
  • Income derived from commercial activities within the country.
  • For the contractor, the total value of a "Turnkey contract" (" llave en mano") and other construction works contracts.