Decree 2120 of 2017 and Decree 2150 of 2017 are important regulatory instruments issued by the Colombian Ministry of Finance that address different aspects of the country’s tax system.

Decree 2120 of 2017

• Issued on December 15, 2017, this decree modifies and substitutes several provisions of the existing tax regulatory framework, specifically related to transfer pricing rules in Colombia.
• It regulates the detailed requirements for the transfer pricing regime, which is based on Articles 260-1 to 260-11 of the Colombian Tax Statute. The decree aligns Colombia’s transfer pricing rules with the guidelines of the Organization for Economic Cooperation and Development (OECD).
• The decree establishes the obligation for Colombian taxpayers to notify the tax authorities whether they must file the country-by-country (CbC) report. This report contains information about the global allocation of income, taxes paid, and economic activities of multinational groups with consolidated revenues equal to or greater than 81 million Tax Value Units (around USD 800 million) for fiscal year 2015.
• Taxpayers must inform the tax authorities if they belong to a multinational group and whether the group must file the CbC report, including details about the reporting entity and its country of fiscal residence.

Decree 2150 of 2017

• Issued on December 20, 2017, this decree regulates the tax treatment of entities without profit motives that belong to the Special Tax Regime (Régimen Tributario Especial) in Colombia, as well as the rules for tax discounts related to donations.
• It specifies the requirements for recognizing a tax discount equivalent to 25% of the donated value on income tax and complementary taxes. Among these requirements are that the beneficiary entity must meet the conditions established in Article 125-1 of the Tax Statute and be qualified under the Special Tax Regime.
• The decree also mandates that the donee entity issue a certification to the donor specifying the donation date, value, manner of donation, and its destination, in accordance with the decree’s provisions.
• Additionally, Decree 2150 sets out the procedures for registration, permanence, and updating of entities in the Special Tax Regime, including obligations to submit an economic report if income exceeds 160,000 UVT in the previous year, and rules to ensure timely and secure submission of required information to the tax authorities.
• The decree also regulates the process for entities to renounce the Special Tax Regime at any time.

Country by Country Reporting

Decree 2120 of 2017 in Colombia directly relates to the country-by-country (CbC) reporting requirements as it establishes the obligation for Colombian taxpayers to notify the tax authorities about whether they must file the CbC report. This decree applies to multinational groups with consolidated revenues equal to or greater than 81 million Tax Value Units (approximately USD 800 million) for fiscal year 2015 and onwards. The CbC report contains detailed information on the global allocation of income, taxes paid, and economic activities of the multinational group. Under Decree 2120, taxpayers must inform the tax authorities if they belong to such multinational groups and specify the reporting entity and its country of fiscal residence. The decree clarifies responsibilities and deadlines for submitting this notification, applicable as of fiscal year 2016.

On the other hand, Decree 2150 of 2017 does not have a direct connection to country-by-country reporting, but it regulates the tax treatment and procedural rules for non-profit entities under Colombia’s Special Tax Regime and the tax benefits related to donations.