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Untd A Emirates - Colombia Tax Treaty (2017, not yet in force) — Orbitax Tax Hub

Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 22

Limitation of Benefits

(1) A person that is a resident of the United Arab Emirates and derives income from Colombia shall be entitled in Colombia to all the benefits of Articles 8, 10, 11, 12 and 13 only if such person is:

  • (a) the United Arab Emirates;
  • (b) a person other than an individual of the United Arab Emirates as referred to in sub-paragraph (b)(iii), paragraph (1) of Article 4 of this Agreement;
  • (c) an individual;
  • (d) a company provided that such company can prove that at least 51% of the beneficial interest in it is owned, directly or indirectly, by the United Arab Emirates and/or by a government institution of the United Arab Emirates and/or an individual who is a resident of the United Arab Emirates and that company is controlled by the aforementioned residents.

(2) A further prerequisite for relief from Colombian tax under paragraph (1) is that the company resident in the United Arab Emirates proves that it was not a principal purpose of the company or of the conduct of its business or of the acquisition or maintenance by it of the shareholding or other property from which the income in question is derived to obtain any of such benefits to the advantage of a person who is not a resident of the United Arab Emirates. Furthermore, the company has to prove that more than 50% of its gross income is not used, directly or indirectly, to meet liabilities (including liabilities for interest or royalties) to persons not entitled to benefits of this Agreement under sub-paragraphs (a) to (d).

(3) Notwithstanding the provisions of paragraphs (1) and (2) the provisions of the Colombian internal law concerning tax avoidance are applicable.

(4) The fulfillment of the conditions under paragraphs (1) and (2) has to be attested by a confirmation of the competent authority of the United Arab Emirates or Colombia as the case may be.

(5) Irrespective of paragraph (4) the competent authorities of both Contracting States shall, to the extent provided under the provisions of Article 25, exchange such information as is necessary for carrying out the provisions of this Article and the application of their respective Internal laws concerning tax avoidance. In case of disagreement between the competent authorities of the two Contracting States, the procedure under Article 24 shall be applied.

(6) Notwithstanding the other provisions of the Convention, a benefit under this Convention shall not be granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of this Convention.