News item | 17-02-2022 | 08:08
On February 16, Prime Minister Rutte and President Duque of Colombia signed the tax treaty between the Netherlands and Colombia in The Hague. This tax treaty prevents double taxation and contributes to the economic interests of both countries.
Colombia is an important partner for the Netherlands in Latin America. This tax treaty removes potential barriers that could otherwise stand in the way of economic activities in Colombia and the Netherlands. A treaty also provides legal certainty for taxpayers in both treaty countries. The treaty between the Netherlands and Colombia essentially follows the OECD and UN model treaty.
Agreements have been made in the treaty to prevent tax avoidance. With these and other agreements in the treaty, this tax treaty meets the minimum standards of the OECD/G20 Base erosion and profit shifting project against tax avoidance.
A reduced source-state tax of five percent on interest on loans for infrastructure projects has also been agreed with Colombia. This at the request of the Colombian government, in order to attract foreign financing for these projects.
In addition, the Netherlands is the first country with which Colombia has made agreements about arbitration. This ensures that if taxpayers from Colombia or the Netherlands have a dispute about double taxation, and the competent authorities of the two countries do not resolve it, they can submit it to a permanent group of industry experts who will make a binding decision on the matter.
Before the treaty enters into force, both countries still have to go through the mandatory approval procedure. In the Netherlands, the treaty is therefore first submitted to the Council of State for advice and then submitted to parliament for approval.