SOUTH AMERICA: Colombia issues reporting rules for UBOs.

As published on step.org/industry-news, Wednesday 19 January, 2022.

The Colombian tax authority has issued Resolution No.164, establishing the criteria for identifying the ultimate beneficial owner (UBO) of legal entities or structures without legal status.

The legislation applies to all Colombian tax-resident companies or entities and permanent establishments of non-resident entities. It also encompasses foreign entities or structures without legal personality that derive more than 50 per cent of the value of their total assets from assets located in Colombia. Also subject to the criteria are structures without legal personality, if they are created or managed in Colombia, governed by Colombian rules or their trustee (or equivalent) is Colombian tax-resident.

For legal entities, the UBO can be an individual who owns or benefits from 5 percent of the capital or voting rights of the entity, exercises legal control over it or is the legal representative of it where no other beneficiaries are identified. The UBO of structures without legal personality could be the settlor, grantor, trustee, trust committee, beneficiary or individual exercising final control over a trust.

UBO information must be filed with the Directorate of National Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales, DIAN), with entities submitting information including ID and tax ID numbers, residence information and criteria met for being a UBO. Entities must keep the supporting documentation for the identification of UBOs submitted to DIAN for five years.

The Resolution came into force on January 15, 2022. Entities created before this date submit their initial report to DIAN by September 30, 2022.