Key Benefits:
1690 OF 2013
(December 17)
Official Journal No. 49.007 of 17 December 2013
CONGRESS OF THE REPUBLIC
By means of which the "Agreement between the Republic of Colombia and the Czech Republic is approved to avoid double taxation and to prevent tax evasion in relation to income tax", signed in Bogotá, D. C., on 22 March 2012.
THE CONGRESS OF THE REPUBLIC
Having regard to the text of the "Agreement between the Republic of Colombia and the Czech Republic to avoid double taxation and to prevent tax evasion in relation to income tax", signed in Bogotá D. C., on 22 December. March 2012.
(To be transcribed: a full and faithful photocopy is attached to the Agreement certified by the Coordinadora of the Working Party of the Treaties of the International Legal Affairs Directorate of the Ministry of Foreign Affairs, document that is based on the files of that Ministry).
AGREEMENT BETWEEN THE REPUBLIC OF COLOMBIA AND THE CZECH REPUBLIC TO PREVENT DOUBLE TAXATION AND PREVENT TAX EVASION IN RELATION TO INCOME TAX
The Republic of Colombia and the Czech Republic,
Wishing to conclude an Agreement to avoid double taxation and to prevent tax evasion in relation to income tax,
You have agreed to the following:
This Agreement applies to persons residing in one or both Contracting States.
1. This Agreement applies to income taxes payable by each of the Contracting States, and in the case of the Czech Republic, also in the name of its political subdivisions or local authorities, regardless of the form in which they are collected.
2. Income taxes are considered to be taxed in full or any part of the income, including taxes on profits derived from the disposal of movable or immovable property, taxes on the amount of wages or wages paid by companies as well as capital gains taxes.
3. The current taxes to which this Agreement applies are, in particular:
a) in the Czech Republic:
(i) income tax on natural persons;
(ii) income tax on legal persons;
(hereinafter referred to as "Czech tax");
b) in Colombia:
(i) Income Tax and Complementary;
(hereinafter referred to as Colombian Tax).
4. The Agreement shall also apply to taxes of an identical or similar nature which are established after the date of signature of the Agreement, and which are added to or replaced by the present date. The competent authorities of the Contracting States shall communicate to each other significant changes to their respective tax laws.
ARTICLE 3. GENERAL DEFINITIONS.
1. For the purposes of this Agreement, unless a different interpretation is inferred from its context:
(a) the term "Czech Republic" means the territory of the Czech Republic on which, under the Czech Law, and in accordance with international law, the sovereign rights of the Czech Republic are exercised;
(b) the term "Colombia" means the Republic of Colombia and, used in geographical sense, it also includes the continental territory, the Archipelago of San Andrés, Providencia and Santa Catalina, the Island of Malpelo and other islands, islets, keys, (a) the territorial sea, the contiguous zone, the continental shelf, the exclusive economic zone, the airspace, the electromagnetic spectrum, or any other space where Colombia exercises or can exercise sovereignty, in accordance with international law or with the laws of Colombia;
c) the terms "one Contracting State" and "the other Contracting State" mean the Czech Republic or Colombia as the context requires;
(d) the term person " includes natural or natural persons, societies, and any other grouping of persons;
e) the term "company" means any legal person or entity that is considered a legal person for tax purposes;
f) the term "company" applies to the exercise of all activity or business;
g) the term "business" also includes the provision of professional services and other activities of an independent nature;
h) the expressions "undertaking of a Contracting State" and "undertaking of the other Contracting State" mean, respectively, a company operated by a resident of a Contracting State and an undertaking operated by a resident of the other State Contractor;
(i) the expression "international traffic" means any transport carried out by a ship or aircraft operated by a resident of a Contracting State, except where that vessel or aircraft is operated only between points located on the other Contracting State;
j) the expression "competent authority" means:
(i) in the case of the Czech Republic, the Minister of Finance or his authorised representative;
(ii) in the case of Colombia, the Minister of Finance and Public Credit or his authorized representative;
k) the term "national" means:
(i) any natural or natural person who holds the nationality of a Contracting State; or
(ii) any legal person, partnership-or partnership constituted under the law in force of a Contracting State.
2. For the application of the agreement by a Contracting State at any given moment, any term or expression not defined in it will have, unless of its context is inferred a different interpretation, the meaning that at that time attribute the legislation of that State to the taxes that are the subject of the Agreement, the meaning attributed by that tax legislation to that which would result from other branches of the law of that State.
1. For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the law of that State, is subject to taxation in that State on the grounds of his domicile, residence, headquarters of effective address, place of incorporation or any other criterion of a similar nature including that State and its political subdivisions or local entities. This expression does not, however, include persons who are subject to taxation in that State exclusively for the income they obtain from sources located in that State.
2. Where, pursuant to the provisions of paragraph 1, a natural or natural person is resident of both Contracting States, their situation shall be resolved as follows:
(a) that person shall be considered a resident only of the State in which he has a permanent dwelling at his disposal; if he has a permanent housing at his disposal in both States, he shall be considered a resident of the State only with whom maintain closer personal and economic relationships (core of vital interests);
(b) if the State in which that person has the centre of his or her vital interests cannot be determined, or if he does not have permanent housing at his disposal in any of the States, he shall be considered a resident only of the State where he lives typically;
(c) if you habitually lived in both States, or did not in any of them, be considered a resident of only the State of which you are a national;
(d) if it is a national of both States, or is not a national of either State, the competent authorities of the Contracting States shall resolve the case by common agreement.
3. Where, under the provisions of paragraph 1, a person, who is not a natural or natural person, is resident of both Contracting States, then:
(a) that person shall be deemed to be resident only of the State of which he is a national.
(b) if that person is not a national of any of the States, the competent authorities of the Contracting States shall, by mutual agreement, seek to resolve the case and decide how to apply the Agreement to that person. In the absence of mutual agreement, such person shall not be entitled to claim any of the benefits or tax exemptions covered by this Agreement.
ARTICLE 5. PERMANENT ESTABLISHMENT.
1. For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business by which an undertaking carries out all or part of its business.
2. The term "permanent establishment" includes, in particular:
a) the address locations;
b) branches;
c) offices;
d) the factories;
e) the workshops; and
(f) mines, oil or gas wells, quarries or any other place in connection with the exploration or exploitation of natural resources.
3. The term "permanent establishment" also includes:
(a) a work, or a project of construction, assembly or installation and the planning and supervision activities related to them carried out on the site, but only when such work, project or activity is longer than six months, and
(b) the provision of services by a company of a Contracting State or through employees or other natural or natural persons entrusted by the undertaking for that purpose, in the event that such activities continue in the territory of the other Contracting State for a period or periods which in total exceed six months within a period of any 12 months.
4. Notwithstanding the foregoing provisions of this Article, the term "permanent establishment" is deemed not to include:
(a) the use of facilities for the sole purpose of storing or exposing goods or goods belonging to the undertaking;
(b) the maintenance of a deposit of goods or goods belonging to the enterprise for the sole purpose of storing or exposing them;
(c) the maintenance of a deposit of goods or goods belonging to the undertaking with the sole purpose of being transformed by another undertaking;
d) the maintenance of a fixed place of business for the sole purpose of buying goods or goods, or collecting information, for the company;
e) the maintenance of a fixed place of business for the sole purpose of undertaking any other auxiliary or preparatory activity for the undertaking;
(f) the maintenance of a fixed place of business for the sole purpose of carrying out any combination of the activities referred to in sub-paragraphs (a) to (e), provided that the whole of the business of the place of business resulting from the that combination retains its auxiliary or preparatory character.
5. By way of derogation from paragraphs 1 and 2, where a person-other than an independent agent to whom paragraph 7 applies-acts in a Contracting State on behalf of an undertaking of the other Contracting State, that person shall be deemed to be the company has a permanent establishment in the State mentioned in the first place with respect to any of the activities that that person carries out for the company, if that person:
(a) has and normally exercises in that State powers which empower it to conclude contracts on behalf of the undertaking, unless the activities of that person are limited to those referred to in paragraph 4 which, if they are carried out by means of a fixed place of business, that fixed place of business is not regarded as a permanent establishment in accordance with the provisions of that paragraph; or
b) does not have such powers, but it usually maintains in the State mentioned in the first place stocks of goods or goods that it uses to deliver regularly goods or goods on behalf of the company.
6. Notwithstanding the foregoing provisions of this Article, it is considered that an insurance undertaking of a Contracting State has, with the exception of reinsurance, a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or if it ensures risks situated in the territory of that State other than an independent agent to whom paragraph 7 applies.
7. It is not considered that a company has a permanent establishment in a Contracting State for the mere fact that it carries out its activities in that State by means of a broker, a general agent or any other independent agent, always the persons acting within the ordinary framework of their activity. However, where such an agent carries out all or almost all of its activities acting on behalf of that undertaking, and between that undertaking and the agent in its commercial and financial relations, conditions are laid down or imposed which differ from those which are They shall be established between independent undertakings, which shall not be regarded as an independent agent within the meaning of this paragraph.
8. The fact that a resident company of a Contracting State controls or is controlled by a resident company of the other Contracting State, or that it carries out business activities in that other State (either by means of an establishment permanent or otherwise), does not make any of these societies permanent establishment of the other.
1. Income which a resident of a Contracting State obtains from immovable property (including income from agricultural, forestry or forestry holdings) located in the other Contracting State may be subject to taxation in that other State.
2. The term "immovable property" shall have the meaning assigned to it by the right of the Contracting State in which the goods are situated. This expression includes in any case the property, livestock and equipment used in agricultural, forestry or forestry holdings, the rights to which the provisions of private law apply. relating to real estate, the usufruct of immovable property and the right to receive fixed or variable payments in consideration for the exploitation, or the granting of the exploitation of mineral deposits, sources and other natural resources. Ships and aircraft shall not be considered as immovable property.
3. The provisions of paragraph 1 are applicable to income derived from direct use, leasing or sharecropping, as well as from any other form of exploitation of immovable property.
4. The provisions of paragraphs 1 and 3 apply equally to income derived from the real estate of a company.
ARTICLE 7. BUSINESS UTILITIES.
1. The profits of a company of a Contracting State may only be subject to taxation in that State, unless the company carries out its activity in the other Contracting State by means of a permanent establishment located in it. If the company carries out its business in that way, the company's profits may be subject to taxation in the other State, but only to the extent that they are attributable to that permanent establishment.
2. Without prejudice to the provisions of paragraph 3, where a company of a Contracting State carries out its activity in the other Contracting State by means of a permanent establishment situated therein, in each Contracting State it shall be attributed to that State. (a) the profits which it would have been able to obtain if it were a separate and separate undertaking which carried out identical or similar activities on the same or similar terms and treated in full independence with the undertaking of which it is permanent establishment.
3. For the purposes of determining the profits of the permanent establishment, the deduction of the costs incurred in accordance with the requirements, conditions and limitations of the tax legislation of the Contracting State concerned shall be permitted for the the purpose of the permanent establishment, including management and general management costs for the same purposes, whether they are carried out in the State in which the permanent establishment is located or elsewhere.
4. As long as it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of a distribution of the company's total profits between its various parties, the provisions of paragraph 2 shall not preclude that the Contracting State determines in this manner the taxable profits; however, the method of delivery adopted shall be such that the result obtained is in accordance with the principles contained in this article.
5. No profit shall be attributed to a permanent establishment by the simple purchase of goods or goods for the enterprise.
6. For the purposes of the preceding paragraphs, the profits attributable to the permanent establishment shall be calculated each year using the same method, unless there are valid and sufficient grounds to proceed otherwise.
7. Where profits include income from regulated income separately in other Articles of this Agreement, the provisions of those Articles shall not be affected by those of this Article.
ARTICLE 8. MARITIME AND AIR TRANSPORT.
1. Profits obtained by a resident of a Contracting State from the exploitation of ships or aircraft in international traffic may only be subject to taxation in that State.
2. For the purposes of this Article, and notwithstanding the provisions of Article 12, profits from the operation of international traffic vessels or aircraft comprise the profits from the of the lease on a complete ship base (by time or journey) of ships or aircraft. They also include utilities derived from leasing on an empty ship base of ships and aircraft, where leasing activities are incidental to the operation of ships or aircraft in international traffic.
3. For the purposes of this Article, and notwithstanding the provisions of Article 12, the profits of a resident of a Contracting State arising from the use, or lease of containers (including trailers/trailers, barges and related equipment for the transport of containers) used in international traffic, shall only be subject to taxation in that State where such use or leasing is incidental to the operation of vessels and aircraft in international traffic.
4. The provisions of paragraph 1 are also applicable to profits from participation in a consortium -pool-on a common holding or an international operating agency.
ARTICLE 9. ASSOCIATED ENTERPRISES.
1. When
(a) a company of a Contracting State participates directly or indirectly in the direction, control or capital of a company of the other Contracting State, or
(b) the same persons are directly or indirectly involved in the management, control or capital of a company of a Contracting State and of a company of the other Contracting State, and in one and other cases the two undertakings are, in their relations (a) commercial or financial, joined by accepted or imposed conditions which differ from those which would be agreed by independent undertakings, the profits which would have been obtained by one of the undertakings in the absence of such conditions; have not been carried out because of the same, they may be included in the profits of that undertaking and be taxed accordingly.
2. When a Contracting State includes in the profits of a company of that State and, consequently, serious those of a company of the other State that have already been taxed by this second State, and these profits thus included are the ones that would have been carried out by the company of the State mentioned first if the conditions agreed between the two companies had been agreed between independent undertakings, that other State would practice the corresponding adjustment of the amount of the tax which it has perceived on those utilities. The other provisions of this Agreement and the competent authorities of the Contracting States shall be consulted if necessary to determine this adjustment.
3. The provisions of paragraph 2 shall not apply in the case of fraud, wilful or intentional non-compliance.
1. Dividends paid by a resident company of a Contracting State to a resident of the other Contracting State may be subject to taxation in that other State.
2. However, such dividends may also be subject to taxation in the Contracting State in which the company pays dividends and under the legislation of that State but if the beneficial owner of the dividends is a resident of the another Contracting State, the tax so required may not exceed:
(a) 5 percent of the gross amount of dividends if the beneficial owner is a company (excluding partnerships-) that directly owns at least 25 percent of the capital of the company that pays the dividends. dividends;
b) 15 percent of the gross amount of dividends in other cases.
This paragraph does not affect the taxation of the company in respect of the profits from which the dividends are paid.
3. By way of derogation from paragraph 2, in the case of dividends paid by a company resident in Colombia from untaxed profits in Colombia in accordance with its domestic law, such dividends may also be subject to taxation in Colombia under the legislation of Colombia, but if the beneficial owner of such dividends is a resident in the Czech Republic, the tax required in Colombia may not exceed 25% of the gross amount of the dividends.
The competent authorities of the Contracting States shall establish by mutual agreement the detailed rules for the application of the limits set out in paragraphs 2 and 3.
4. The term "dividends" within the meaning of this article means the income of the shares or other rights, except those of credit, that allow participation in the profits, as well as other income subject to the same tax regime as the income of actions under the legislation of the State of residence of the company making the payment.
5. The provisions of paragraphs 1, 2 and 3 are not applicable if the beneficial owner of the dividends, resident of a Contracting State, performs in the other Contracting State, of which the dividend-paying company is resident, a business activity through a permanent establishment located there and the participation that the dividends generate is effectively linked to that permanent establishment. In this case, the provisions of Article 7apply.
6. Where a resident company of a Contracting State obtains profits or income from the other Contracting State, that other State may not require any tax on dividends paid by the company, except to the extent that those dividends are paid by the company. dividends are paid to a resident of that other State or the participation which generates the dividends is effectively linked to a permanent establishment situated in that other State, nor does it subject the non-distributed profits of the company to a tax on the same, even if dividends paid or profits not distributed consist, in whole or in part, of profits or income from that other State.
1. Interest from a Contracting State and paid to a resident of the other Contracting State may be subject to taxation in that other State.
2. However, those interests may also be subject to taxation in the Contracting State from which they come and under the law of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax This requirement shall not exceed 10% of the gross amount of interest.
The competent authorities of the Contracting States shall establish by mutual agreement the modalities of application of these limits.
3. Notwithstanding the provisions of paragraph 2, interest from a Contracting State and paid to a beneficial owner resident in the other Contracting State shall be taxed only in that other State if such interest is paid:
(a) in relation to a sale on credit of any commodity or equipment;
b) by a loan or credit of any nature granted by a bank, only if the loan or loan is granted for a period of not less than three years;
(c) to the Government of the other Contracting State, including its political subdivisions or local authorities, the Central Bank or any government-owned or controlled financial institution;
(d) to a resident of the other State in connection with any loan or credit secured by the Government of the other State, including its political subdivisions or local authorities, the Central Bank or any financial institution of ownership or controlled by the Government.
4. The term 'interest', within the meaning of this article, means the income of claims of any kind, with or without a mortgage guarantee or clause of participation in the profits of the debtor, and in particular, the income of public securities and the income of bonds and bonds, including premiums and prizes linked to those bonds and bonds, as well as any other income that the law of the State from which the interest applies treats as such. Penalties for arrears in payment are not considered to be interest for the purposes of this Article. The term interest does not include any income that is considered as a dividend under the provisions of Article 104).
5. The provisions of paragraphs 1, 2 and 3 are not applicable if the beneficial owner of the interest, resident of a Contracting State, carries out in the other Contracting State, from which the interest comes, a business activity by way of a permanent establishment located there and the credit generated by the interest is effectively linked to that permanent establishment. In this case, the provisions of Article 7apply.
6. Interest is considered to be from a Contracting State when the debtor is a resident of that State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment in respect of which the debt for which interest is paid has been incurred, and they are supported by that permanent establishment, those interests shall be considered as coming from the Contracting State in which the permanent establishment is situated.
7. Where, in the light of the special relations between the debtor and the beneficial owner, or of which one and the other holds with third parties, the amount of interest, in the light of the credit for which they are paid, exceeds that which they have the debtor and the creditor in the absence of such relations, the provisions of this Article shall not apply more than to the latter amount. In such a case, the excess amount shall remain subject to taxation in accordance with the law of each Contracting State, taking into account the other provisions of this Agreement.
1. Royalties from a Contracting State and paid to a resident of the other Contracting State may be subject to taxation in that other State.
2. However, such royalties may also be subject to taxation in the Contracting State from which they proceed and in accordance with the law of that State, but if the beneficial owner of the royalties is resident of the other Contracting State, the Tax so required may not exceed 10 percent of the gross amount of royalties.
The competent authorities of the Contracting States shall establish by mutual agreement the detailed rules for the application of this limit.
3. The term "royalties", within the meaning of this Article, means the amounts of any kind received by the use, or by the right of use, of copyright on literary, artistic or scientific works, including films cinematographic, and films or tapes for television or radio, any patent, trademark, design or model, plan, formula or secret procedure, or any other intangible property, of industrial, commercial or scientific equipment, or information on industrial, commercial or scientific experience. The term "royalties" also includes payments received as consideration for the provision of technical assistance services, technical services and consulting services.
4. The provisions of paragraphs 1 and 2 are not applicable if the beneficial owner of the royalties, resident of a Contracting State, performs in the other Contracting State from which the royalties come, a business activity by means of a permanent establishment located there and whether the property or the right to which the royalties are paid is effectively linked to that permanent establishment. In such a case the provisions of the article 7or.
5. Royalties are considered to be from a Contracting State when the debtor is a resident of that State. However, where the debtor of the royalties, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment in respect of which the obligation to pay the royalties has been incurred and this Permanent establishment support payment of the same, royalties shall be considered as coming from the State in which the permanent establishment is situated.
6. Where, by reason of the special relations between the debtor and the beneficial owner or by which one and the other maintain with third parties, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds that which the debtor and the beneficial owner have agreed in the absence of such relations, the provisions of this Article shall only apply to the latter amount. In such a case the excess amount may be subject to taxation in accordance with the law of each Contracting State, taking into account the other provisions of this Agreement.
7. If, after the signature of this Agreement, Colombia signs with a third State an Agreement, Convention or Protocol thereto containing provisions relating to the taxation of income from the provision of technical assistance services, technical services or consultancy services which are more favourable than those provided for in this Agreement, in respect of tax or tax treatment or both, such a scheme shall be automatically applicable for the purposes of this Agreement; Agreement, as from the date on which the Agreement, Convention or Protocol thereto between Colombia and that third State produces effects. The competent authority of Colombia shall inform the competent authority of the Czech Republic, without delay, that the conditions of application of this Agreement have changed.
1. Gains that a resident of a Contracting State obtains from the disposal of real estate as defined in Article 6, located in the other Contracting State, may be subject to taxation in that other Status.
2. Proceeds arising from the disposal of movable property which forms part of the asset of a permanent establishment which a company of a Contracting State has in the other Contracting State, including the gains arising from the disposal of such a permanent establishment (alone or with the company as a whole) may be subject to taxation in that other State.
3. Profits which a resident of a Contracting State obtains from the disposal of vessels or aircraft operated in international traffic or movable property affected by the operation of such vessels or aircraft may be subject to taxation only in that State.
4. Gains made by a resident of a Contracting State arising from the disposal of shares or other interests in a resident company of the other State may be taxed in the latter.
5. Gains arising from the disposal of any other goods other than those referred to in paragraphs 1 2, 3 and 4 shall only be subject to taxation in the Contracting State in which the enajenant resides.
ARTICLE 14. INCOME FROM A JOB.
1. Without prejudice to the provisions of Articles 15, 17 and 18, the salaries, salaries and other similar remuneration obtained by a resident of a Contracting State on the basis of a dependent job can only be subject to taxation in that State unless the dependent work is carried out in the other Contracting State. If the dependent work is carried out in the latter State, the remuneration derived from it may be subject to taxation in that other State.
2. By way of derogation from paragraph 1, the remuneration obtained by a resident of a Contracting State on the basis of a dependent work carried out in the other Contracting State may only be subject to taxation in the State referred to in paragraph 1. first place if all of the following conditions are met:
(a) the recipient is employed in the other State for a period or periods whose duration does not exceed, in aggregate, 183 days in any twelve-month period beginning or ending in the fiscal year considered, and
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
(c) remunerations are not supported by a permanent establishment that the employer has in the other State.
3. In the calculation of the periods referred to in paragraph 2 (a), the following days
be included:(a) all days of physical presence, including the days of arrival and departure; and
(b) the days spent outside the State of activity, such as Saturdays and Sundays, national holidays, holidays and business trips directly related to the employment of the recipient in that State, after which the activities in question have resumed the territory of that State.
4. The term 'employer' referred to in paragraph 2 (b) means that the person is entitled to the work done and assumes the responsibilities and risks related to the execution of the work.
5. Notwithstanding the foregoing provisions of this Article, the remuneration obtained from a dependent work carried out on board a vessel or aircraft operated in international traffic by a resident of a Contracting State may be subject to taxation in that State.
ARTICLE 15. DIRECTORS ' REMUNERATION.
Fees and other similar remuneration that a resident of a Contracting State obtains as a board member, board of directors or supervisory board or any other similar body of a resident company of the other State Contracting may be subject to taxation in that other State.
ARTICLE 16. ARTISTS AND SPORTSMEN.
1. By way of derogation from Articles 7 and 14, the income of a resident of a Contracting State from the exercise of his or her personal activities in the other State A contractor as an artist of the show, such as a theatre, film, radio or television actor or a musician or as a sportsman, may be subject to taxation in that other State.
2. By way of derogation from Articles 7 and 14, where the income derived from the personal activities of the artists of the show or the sportspersons, in their capacity as such, is attribute not already to the show's own artist or sportsman but to another person, such rents may be subject to taxation in the Contracting State where the activities of the artist of the show or the sportsman are carried out.
Without prejudice to Article 18 (2),and other similar remuneration paid to a resident of a Contracting State for an earlier dependent work may only be subject to taxation in that State.
1. (a) salaries, wages and other similar remuneration paid by a Contracting State or by one of its political subdivisions or local entities to a natural person for the services provided to that State or to that subdivision or entity; can be subject to taxation in that State.
(b) However, such wages, salaries and remuneration may only be subject to taxation in the other Contracting State if the services are provided in that State and the natural person is a resident of that State who:
(i) is a national of that State, or
(ii) has not acquired the status of resident of that State only to provide the services.
2. (a) By way of derogation from paragraph 1, pensions and other similar remuneration paid by, or from funds constituted by, a Contracting State or by one of its political subdivisions or local entities, to a natural person by the services provided to that State or to that subdivision or entity shall only be subject to taxation in that State.
(b) However, such pensions and other similar remuneration shall only be subject to taxation in the other Contracting State if the natural person is resident and national of that State.
3. The provisions in Articles 14, 15, 16 , and 17 apply to wages, salaries, pensions, and other similar remuneration, paid for services provided in the framework of a business activity carried out by a Contracting State or by one of its local political subdivisions or entities.
The amounts you receive to cover your living expenses, studies or training a student or a person in practice who is, or has been, immediately before arriving in a Contracting State, resident of the other Contracting State and who is in the State referred to in the first place for the sole purpose of pursuing its studies or training, shall not be subject to taxation in that State provided that it comes from sources outside that State.
The income of a resident of a Contracting State, which is not expressly mentioned in the foregoing articles of this Agreement, shall only be subject to taxation in that State. However, if such income is derived from sources in the other Contracting State, they may also be subject to taxation in that other State.
ARTICLE 21. REMOVING DOUBLE TAXATION.
1. Without prejudice to the provisions of the Colombian legislation on the elimination of double taxation, in the case of a resident of Colombia, double taxation will be eliminated as follows:
(a) When a resident of Colombia obtains income which, according to the provisions of this Agreement, may be subject to taxation in the Czech Republic, Colombia will allow a discount of the income tax actually paid by that resident for an amount equal to the income tax paid in the Czech Republic. However, such discount may not exceed that part of the income tax in Colombia, calculated before the discount is granted, corresponding to the income that may be subject to taxation in the Czech Republic.
b) In the case of dividends, Colombia will allow a discount of income tax equivalent to multiplying the total amount of the dividends for the income tax rate applied in the Czech Republic to the profits charged to which are paid those dividends. Where such dividends are taxed in the Czech Republic, in accordance with the provisions of this Agreement, such discount shall be increased by the corresponding amount. However, in no case may that discount exceed the total amount of income tax generated in Colombia in relation to those dividends.
2. Without prejudice to the provisions of the legislation of the Czech Republic, with regard to the elimination of double taxation in the case of a resident of the Czech Republic, double taxation shall be eliminated as follows:
The Czech Republic, by subjecting its residents to taxation, may include in the taxable base on which the taxes are calculated, the income which, in accordance with the provisions of the agreement, may be subject to taxation in the Republic of Colombia but must allow the deduction of the amount of the tax calculated on that basis, an amount equal to the tax paid in the Republic of Colombia. However, this deduction shall not exceed that part of the Czech tax calculated before the deduction is granted, which is attributable to revenue which may be subject to taxation in accordance with the provisions of this Agreement. Republic of Colombia.
3. Where, in accordance with any provision of this Convention, the income obtained by a resident of a Contracting State is exempt from tax in that State, that State may, however, take into account the exempt income for the purposes of calculate the amount of tax on the rest of the resident's income.
ARTICLE 22. NON-DISCRIMINATION.
1. Nationals of a Contracting State shall not be subject in the other Contracting State to any tax or obligation relating thereto which is not required or which are more burdensome than those to which nationals of that State are or may be subject another State which is under the same conditions, in particular with regard to residence. Notwithstanding the provisions of Article 1, this provision is also applicable to persons who are not residents of one or any of the Contracting States.
2. Permanent establishments which a company of a Contracting State has in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings in that other State which carry out the same activities. This provision may not be interpreted as requiring a Contracting State to grant to the residents of the other Contracting State personal deductions, reliefs and tax reductions which it grants to its own residents in consideration of their marital status or family charges.
3. Unless the provisions of Article 9(7), Article 11, or Article 126) are applied, the interest royalties other expenses paid by a company of a Contracting State to a resident of the other Contracting State shall be deductible in order to determine the profits which are subject to the imposition of that undertaking, under the same conditions as if they had been paid to a resident of the State mentioned in the first place.
4. Undertakings in a Contracting State whose capital is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State shall not be subject to the State referred to above. a tax or an obligation relating to it which is not required to be more burdensome than those to which other similar undertakings of the State referred to in the first place may be or may be subject.
5. Notwithstanding the provisions of Article 2, the provisions of this Article are applicable to all taxes, whatever their nature or denomination.
ARTICLE 23. FRIENDLY PROCEDURE.
1. Where a person considers that the measures taken by one or both Contracting States imply or may involve for it an imposition which is not in conformity with the provisions of this Agreement, it may, irrespective of the resources provided for by the domestic law of those States, subject their case to the competent authority of the Contracting State of which it is resident or, if Article 221) applies, to that of the Contracting State of the national. The case shall be brought within three years of the first notification of the measure involving an imposition not in accordance with the provisions of the Agreement.
2. The competent authority, if the complaint appears to be founded and if it cannot find a satisfactory solution by itself, will do what it can to resolve the matter by means of a friendly agreement with the competent authority of the other State. in order to avoid an imposition that does not comply with this Agreement. The agreement shall apply irrespective of the time limits laid down by the national law of the Contracting States.
3. The competent authorities of the Contracting States shall endeavour to resolve any difficulties or doubts raised by the interpretation or application of the Agreement by means of a friendly agreement. They may also agree to seek to eliminate double taxation in cases not provided for in the Agreement.
4. The competent authorities of the Contracting States may communicate directly in order to reach an agreement within the meaning of the preceding paragraphs.
ARTICLE 24. INTERCHANGE OF INFORMATION.
1. The competent authorities of the Contracting States shall exchange information likely to be relevant for the application of the provisions of this Agreement or for the administration and enforcement of the provisions of the national legislation of the Member States. Contractors relating to taxes of any kind and nature perceived by the Contracting States, their subdivisions or local entities to the extent that the imposition provided for therein is not contrary to the Agreement. Information sharing will not be limited by Articles 1 and 2.
2. Information received by a Contracting State pursuant to paragraph 1 shall be kept secret in the same way as information obtained under the domestic law of that State and shall only be disclosed to persons or authorities (including the courts and administrative bodies responsible for the settlement or recovery of the taxes referred to in paragraph 1, their actual application or the pursuit of the non-compliance relating thereto, the resolution of the resources in relation to the same or the supervision of the above functions. Such persons or authorities shall only use this information for these purposes. They will be able to disclose information in public hearings in the courts or in judicial rulings.
3. In no case shall the provisions of paragraphs 1 and 2 be interpreted as requiring a Contracting State to:
(a) adopt administrative measures contrary to their legislation or administrative practice, or to those of the other Contracting State;
(b) to provide information that cannot be obtained on the basis of its own legislation or in the exercise of its normal administrative practice, or of those of the other Contracting State;
c) to provide information that discloses trade, managerial, industrial or professional secrets, business procedures, or information whose communication is contrary to public order.
4. If a Contracting State requests information in accordance with this Article, the other Contracting State shall use the measures to obtain information at its disposal in order to obtain the information requested, even if that other State may not need such information for their own tax purposes. The obligation laid down in the preceding sentence is limited by the provisions of paragraph 3 provided that this paragraph is not interpreted to prevent a Contracting State from providing information exclusively in the absence of interest. domestic in the same.
5. Under no circumstances shall the provisions of paragraph 3 be interpreted as allowing a Contracting State to refuse to provide information only because it is in the possession of banks, other financial institutions, or any other person. acting in a representative or fiduciary capacity or because such information refers to the participation in the ownership of a person.
ARTICLE 25. BENEFIT LIMITATION.
1. Notwithstanding the provisions of any other Article of this Agreement, the benefits provided by this Agreement shall not be granted to companies of any Contracting State if the purpose of such companies is to obtain benefits under this Agreement that otherwise would not be available.
2. The provisions of this Agreement shall in no case prevent a Contracting State from applying the provisions of its domestic legislation aimed at the prevention of tax evasion.
3. The competent authority of a Contracting State may, after consultation with the competent authority of the other Contracting State, refuse the benefits of the Agreement to any person, or in respect of any transaction, if in its opinion those benefits would constitute an abuse of the Agreement
ARTICLE 26. MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS.
The provisions of this Agreement shall not affect the tax privileges enjoyed by members of diplomatic missions or consular offices in accordance with the general principles of international law or under the laws of the Member States. provisions of special agreements.
Each of the Contracting States, once the procedures required by its legislation for the entry into force of this Agreement have been completed, shall notify the other, through the diplomatic route. This Agreement shall enter into force on the date of the last notification and the provisions of the Agreement shall apply:
(a) with respect to taxes withheld at source, paid or credited income, on or from the first of January of the immediately following calendar year, to the one in which this Agreement enters into force;
(b) with respect to taxes not withheld at source, income from any tax year starting on or from the first of January of the calendar year immediately following the entry into force of this Agreement.
This Agreement shall remain in force as long as it is not reported by one of the Contracting States. Any of the Contracting States may denounce the Agreement by diplomatic means by communicating it with at least six months in advance of the termination of any calendar year after the five-year period, counted from the the date of its entry into force. In that case, the Agreement shall cease to have effect:
(a) with respect to taxes withheld at source, on income paid or credited, on or from the first of January of the calendar year immediately following, to that in which the notification is made;
(b) in respect of taxes other than those retained at the source, the income of any taxable year starting from January 1 of the immediately following calendar year, to that in which the notification is made.
FACT in duplicate in Bogotá D. C., on March 22, 2012 in the Czech, Spanish and English languages, all texts being equally authentic. In the case of any divergence, the English version will prevail.
By the Republic of Colombia,
JUAN CARLOS ECHEVERRY GARZON,
Minister of Finance and Public Credit.
By the Czech Republic,
VLADIMIR EISENBRUK,
Ambassador of the Czech Republic to Lima
THE UNDERSIGNED COORDINATOR OF THE INTERNAL WORKING GROUP OF TREATIES OF THE DIRECTORATE OF INTERNATIONAL LEGAL AFFAIRS OF THE MINISTRY OF FOREIGN RELATIONS OF THE REPUBLIC OF COLOMBIA
CERTIFIES:
That the reproduction of the text above is a faithful and complete copy of the Agreement between the Republic of Colombia and the Czech Republic to avoid double taxation and to prevent tax evasion in relation to the tax on the income ", signed in Bogotá, D. C., on March 22, 2012, a document that is based on the file of the Internal Working Group of the International Legal Affairs Directorate of this Ministry.
Dada in Bogotá, D. C., at sixteen (16) days of the month of August of two thousand twelve (2012).
The Coordinator of the Internal Treaty Working Group,
ALEJANDRA VALENCIA GARTNER,
Directorate of International Legal Affairs.
BILL MOTIVE EXPOSURE
Honorable Senators and Representatives
On behalf of the National Government and in compliance with the provisions of Articles 150 numeral 16, 189 numeral 2 and 224 of the Political Constitution of Colombia, we present to the honorable Congress of the Republic the Bill "by means of which the" Agreement between The Republic of Colombia and The Czech Republic to Avoid Double taxation and to prevent tax evasion in relation to the Income Tax, " signed in Bogota, D.C., on March 22, 2012.
I. INTERNATIONAL DOUBLE TAXATION
International double taxation (more commonly referred to as 'international double taxation') can be defined in general terms, such as the imposition of similar taxes (concurrency of tax rules), in two or more States, the same taxable person (taxpayer), in respect of the same operative event (taxable matter), for the same period of time. This situation arises largely because, on the basis of the tax power of its sovereignty, the States usually determine their tax legal relationship with taxable persons on the basis of both subjective and objective criteria.
Traditionally, following a subjective criterion, states have sought to subject their residents to taxation on the totality of their income (world income) and their assets, that is to say on their income and assets from both national and national sources. foreign source. In addition, by adopting an objective criterion, the States tend to tax any business or activity carried out in their territory, subjecting the income generated there (national source income) to taxation and the assets located there. This is the way in which a criterion is adopted simultaneously by the generality of the countries which attends to the residence, in order to tax any income that occurs in and out of its territory, and another that appeals to the territory, to subject taxation of income obtained by residents and non-residents in the same, the most representative phenomenon of international double taxation can be configured: the so-called conflict residence-residence.
The so-called source-source conflicts and residence-residence, for their part, refer to the other two possible causes of international double taxation. The first of these conflicts arises, mainly, from the different conceptualization of income in different legal systems, a question that has led to two or more States to characterize as a national source the same income or wealth. such that the holder ends up being subject to taxation in two or more States which treat such income and/or assets as having arisen in each of them. The second of these conflicts is the existence of multiple definitions of the concept of residence in different jurisdictions, a situation which has caused two or more States to consider the same taxable person as resident. of their territory and subject to the imposition of all their income and/or their assets.
II. CONVENTIONS TO AVOID DOUBLE TAXATION AND PREVENT TAX EVASION
Since the beginning of the 20th century, the States with the largest flow of cross-border transactions and their residents began to recognize that the existence of double taxation in international affairs was an obstacle to income flows and to the movements of capital, goods, services and persons from one State to another. Indeed, the double taxation burden, coupled with the uncertainty generated by the frequent modification of the applicable tax rules, not only discourages foreign investment and distorts international trade, but determines the decision of investors, exporters and importers to reinvest and continue to channel their goods and services through a particular market.
In order to mitigate the adverse effects associated with international overtaxation, the States began to generate new rules of law. This regulation was implemented through two mechanisms, one unilateral enshrined in the internal legislation of the States and another bilateral deployed through international agreements for avoid double taxation and prevent tax evasion [hereinafter ADT].
One of the most commonly used unilateral mechanisms to eliminate international double taxation is that of imputation, credit or discount tax. According to him, taxes paid in one State (State of the source) by a resident of another State (State of residence) may be discounted (subtracted) from the tax payable on those same income or property in that other State (State of residence) residence). On many occasions, this mechanism only partially eliminates double taxation, since the discount of tax paid abroad is only allowed up to the limit of the tax generated on that same income or property in the State of residence. The credit or tax discount mechanism is currently contemplated in Colombian legislation in Article 254 of the Statute. Tax.
Now, in order to ensure greater legal certainty in tax matters for international operations, the States-including the members of the Organization for Economic Cooperation and Development, OECD-have been preferred to solve the most frequently encountered problems of international double taxation through the use of the bilateral mechanisms established in the ADTs. These ADTs have been built around institutional models and have proliferated in recent decades, thanks to the fact that they not only make it possible to clarify, normalize and guarantee the fiscal position of taxable persons through instruments with high standards. They also empower states to implement common solutions in identical cases of double taxation, in conditions of fairness, reciprocity and convenience.
This is how ADTs have been shown to be very effective instruments for the elimination of international double taxation, since by means of them events can be established in which a single State taxes a certain income, eliminating double taxation. taxation, or to agree a shared taxation by limiting the rate of tax generated in the State of the source, in which case the taxpayer may ask for the discount in the State of residence of the entire tax paid in the another State, thus eliminating double taxation. Likewise, in cases where shared taxation is agreed, subject to a limit in the State of the source, legal stability is provided to foreign investors and investors from Colombia abroad. Finally, through the ADTs, rules are established to determine the residence of persons, in such a way that the cases in which the international double taxation can be presented as a result of the different definitions of residence that the different States have.
Now, traditionally ADTs have subscribed on the basis of achieving two main purposes: 1) avoid double taxation on passive subjects involved in cross-border transactions and 2) mitigate risks (a) by promoting cooperation and the exchange of information between States.
As for the first objective, it is worth clarifying that, with the purpose of mitigating double taxation, the ADTs clearly delimit the scope of the tax authority of the States on the basis of reciprocity, equity and convenience. Thus, as mentioned above, in some cases the right of exclusive imposition is assigned to one of the Contracting States, while in others, it is agreed that the States party to the ADT will share jurisdiction to tax, limiting the rates of the taxes that are generated in order to minimize or eliminate the international double taxation. In this sense, the ADTs have no impact on the elements of the determination of the tax, such as costs or deductions, nor can they be interpreted or used to create tax exemptions or, by the effect of the treaty, to generate a double not taxation in both Contracting States, since their design is that a certain income or property is not subject to double taxation.
In relation to the second objective, it should be emphasized that the ADTs generally contain provisions against non-discrimination between nationals and foreigners, as well as mechanisms for resolving disputes through a friendly procedure. In addition, they regulate international cooperation through mechanisms such as the exchange of tax information between tax administrations, in order to combat tax evasion and fraud. Thus, with the subscription of the ADTs it is sought to reach a fair means between the tax control and the offer of fiscal mechanisms to reduce the adverse effects to the trade product of the excessive imposition.
III. "AGREEMENT BETWEEN THE REPUBLIC OF COLOMBIA AND THE CZECH REPUBLIC TO PREVENT DOUBLE TAXATION AND TO PREVENT TAX EVASION IN RELATION TO INCOME TAX", SIGNED ON 22 MARCH 2012.
During the previous government, the Ministry of Finance and Public Credit and the National Tax and Customs Directorate, DIAN, initiated the analysis of the issues concerning international double taxation, having managed to negotiate and sign The first ADTs signed by Colombia, mainly based on the model sponsored by the OECD and based on certain aspects of the model accepted by the United Nations, UN. These models have had a great influence on the negotiation, application and interpretation of the ADTs worldwide and their use has been extended to practically all the States, as they are permanently studied, analyzed, considered, discussed and updated in response to the ongoing processes of globalization and the liberalization of economies worldwide.
Recently, the ADTs were recognized as one of the instruments to contribute to promoting both the flow of foreign investment into Colombia, and the investment of Colombians abroad; investment flows that have been identified as one of the strategic guidelines within the country's international insertion and relevance policy, drawn up for the period from 2010 to 2014[1]. Nevertheless, Colombia has concluded relatively few ADT, counting so far only with 5 Conventions in force-the ADT with the CAN, Spain, Chile, Switzerland and Canada. While countries in the region such as Mexico, Brazil, Venezuela, Chile and Argentina each have an important network of ADT, with which it has been sought to eliminate the barrier of overtaxation by 38, 31, 31, 27 and 17 markets respectively, the Colombia's participation in the elimination of double taxation represents only 0.16% of the world stock (it is estimated that in the world there are currently approximately more than 3,000 ADT in force)[2]. This situation, bearing in mind the policy of insertion and international relevance that has been permanent since the promulgation of the Political Constitution of 1991 and which is currently embodied in the current National Development Plan, creates a disadvantage for Colombia not only at the national level but in the world, since most foreign investors are being forced to compete in the Colombian market with the cost of double taxation, while at the same time Colombian foreign investors are competing in most of the world's markets in the world. unfavourable and distortion conditions.
Thus, Colombia has undertaken the search for relevant markets for Colombian investors, markets whose investors are also seeing or are going to be forced to compete under conditions of distortion in Colombia and whose governments are interested and willing to work around like-minded goals in terms of equity and reciprocity, both de jure and de facto. Such that, inspired by the OECD and UN models and their official comments, the government has drawn up an ADT proposal that includes some variations in order to adequately respond to the interests and the tax system. Colombia, a text that on this occasion served as a basis for negotiating the ADT with the Czech Republic.
The Czech Republic has a dynamic economy, whose gross domestic product over the past five years has grown by more than 7%; it also has a per capita GDP that triples the Colombian[3]. The government estimates that the With the Czech Republic, it is an important step towards meeting the objectives set out above, since both the trade and capital flows to and from the Czech Republic suggest that the Czech market and its Investors could be very attractive to Colombia and vice versa. On the one hand, Colombian imports of goods from the Czech Republic have increased by more than 18% over the last five years[4], while the world's imports from the Czech Republic have grown by 7.7% over the same period. Imports from the Czech Republic also account for more than 65% of GDP[5], which makes the Czech market a potential for Colombian exports. Trade in services in the Czech Republic has also grown above 9% and 10% in imports and exports respectively between 2006 and 2010[6]On the other hand, the stock of foreign direct investment in the Czech Republic exceeds In the Czech Republic over the last five years, it has increased by more than 14%[7]. In this way, the potential to invest in the Czech Republic is important. The Czech Republic also has a wide network of ADT (approximately 78[8]), indicating that in this market, in the absence of an ADT with Colombia, Colombian investors are, with respect to their peers from the rest of the world, subject to competing in unfavorable conditions, so that the subscription of an ADT between the two countries is a necessary step.
The Agreement between the Republic of Colombia and the Czech Republic to prevent double taxation and to prevent tax evasion in relation to income tax can be divided into six parts. The first part is made up of Articles 1 and 2 that contemplate the scope of the Agreement, identifying the persons to whom the Agreement covers and relating expressly the taxes on which it will be applied.
In the second part you define in detail some terms and expressions for the purposes of the Agreement. In this regard, definitions are found for the signatory States, as well as terms or expressions used in the text of the Agreement, such as "a Contracting State", "the other Contracting State", "person", "Company", "Company", 'undertaking of a Contracting State', 'undertaking of the other Contracting State', 'international traffic', 'competent authority', 'national' and 'business'. Furthermore, it is clarified that any term or expression not defined in the Agreement will have, unless its context is inferred a different interpretation, the meaning that at that time is attributed to it under the legislation of the corresponding State of taxation of taxes which are the subject of. Likewise, this part of the Agreement contains a special article defining the residence and establishing the rules for resolving conflicts that arise between the Contracting States in relation to this point. In addition, the concept of "permanent establishment" is defined, which is of particular importance in the field of the ADT, since it determines the power of imposition of a State when in the same one is carried out permanent business activities by a resident of the other Contracting State.
The third part of the Agreement comprises Articles 6 to 20, in which the tax authority of the Contracting States is defined and demarcated in relation to the tax on the income. The following provisions are highlighted:
-- Article 6. Income from immovable property, which, due to its close link with the State in which the immovable property is located, is taxed exclusively in the State in which the immovable property is located;
-- Item 7. Business profits, which are taxed by the country of residence of the person exercising the business, except where such activity is carried out by means of a permanent establishment located in the other Contracting State, case in which that other State may tax them;
-- Item 8. Maritime and air transport; this article gives it the power to tax the income of international transport only to the country of residence of the undertaking carrying out the international transport activity;
-- Item 9. Associated companies; this article contains international tax control provisions, which seek to prevent price manipulation between related companies in order to undermine the taxation of any of the Contracting States;
-- Item 10. Dividends; this article provides for the possibility that dividends obtained by a resident of a Contracting State, and which are distributed by a resident company of the other Contracting State, are taxed by the State of residence of such a company at a reduced or limited rate of 5%, if the beneficiary of such dividends holds at least 25% of the capital of the company which distributes the dividends, or of 15% in other cases. Similarly, the State of residence of the beneficiary of the dividends retains the power to tax them but with the obligation to grant a tax rebate for the tax paid in the State of the source, so in this case the State of the residence and the State of the source share jurisdiction to tax. Finally, in relation to the dividends it is relevant to note that in cases where, for the purposes of Colombian domestic legislation, the utility obtained by a company is not taxed in its head, in the protocol of the article 10 the possibility was envisaged that, in the interest of reciprocity, Colombia would be serious dividends distributed from those utilities at a rate of 25%;
Item 11. Interest; according to this article, in general, the jurisdiction to tax the interest is shared by the State of the residence of the person who perceives the interest and the State of the source, being the taxation in the State of the source (State of residence of the debtor) subject to a ceiling. Notwithstanding the foregoing, certain exceptions are established in which the interests may be taxed only by one of the Contracting States, taking into account the economic relevance for each of them of the operations which give rise to such interests;
Article 12. Royalties; according to this article, the jurisdiction to tax royalties (corresponding to the income from the exploitation of trademarks, patents and all kinds of industrial and commercial property) is shared by the State of the residence of who perceives the regalia and the State of the source (State of residence of the payer or user of the copyright or industrial property etc.), with the taxation in the State of the source subject to a ceiling of 10%. This rate, as well as the other rates enshrined in the agreement, are generally agreed by the developing countries with the developed countries. Finally, for the purposes of the Agreement, other income arising from the provision of technical services, technical assistance and consultancy was included in the definition of royalties;
Item 13. Capital gains; the article enshrines different rules relating to the taxation of capital gains, depending on the type of good object of disposal. For example, in the case of real estate, the jurisdiction to tax is exclusively of the State in which the property is located; in the case of the disposal of shares and other rights representing the capital of a company, the jurisdiction to tax is shared by the State of the residence of the enajenante and the State of the source (State of residence of the issuing company or rights) without, in the case of the latter, no limit as to the tariff; lastly, in the case of the disposal of vessels and aircraft operated in international traffic, the jurisdiction to tax is exclusively of the State in which the enajenante resides;
Article 14. Income from dependent work; they are taxed in the State of residence of the beneficiary, provided that the beneficiary does not remain in the other Contracting State for a period or periods of duration exceeding 183 days in any period of 12 months, which starts or ends in the tax year in question, and its remuneration is not paid to you by or on behalf of a resident of that other Contracting State or a permanent establishment located in it.
The fourth part of the Agreement enshrines methods for eliminating double taxation in each Contracting State and the fifth, corresponding to items 22 to 26 contains special provisions. From this last part it is important to emphasize the article 25 that enshrines a clause of limitation of benefits, instrument for the fight against the fraud or the tax evasion that prevents the abuse of the Agreement and is proposed by the collaboration between the administrative authorities through the use of the consultation mechanism, the aim of which is to deny the benefits of the Agreement to any person or with respect to any transaction deemed to be abusive. This apart also contains a provision of non-discrimination which guarantees equal treatment for nationals of a Contracting State with respect to nationals of the other Contracting State. It is also relevant to stress the inclusion of the provision which enshrines the exchange of tax information in accordance with internationally accepted standards, which is of vital importance for tax administrations in the its work on prevention and the fight against international tax evasion.
Finally, the final part of the Agreement contains two provisions on its entry into force and termination.
For the reasons outlined above, the National Government, through the Minister of Foreign Affairs and the Minister of Finance and Public Credit, requests the Honorable Congress of the Republic to approve the bill "by means of which approves the" Agreement between the Republic of Colombia and the Czech Republic to avoid double taxation and to prevent tax evasion in relation to income tax ", in Bogotá D. C., on March 22, 2012. "
Of the honorable Congressmen,
The Minister of International Relations,
MARIA ANGELA HOLGUIN HANG.
The Minister of Finance and Public Credit,
MAURICIO CÁRDENAS SANTAMARIA.
EXECUTIVE BRANCH OF PUBLIC POWER
PRESIDENCY OF THE REPUBLIC
Bogotá, D. C., October 3, 2012
Authorized. Submit to the consideration of the honorable Congress of the Republic for the constitutional effects
(Fdo.) JUAN MANUEL SANTOS CALDERÓN
Minister of Foreign Affairs
(Fdo.) Maria Angela Holguin Cuellar.
DECRETA:
ARTICLE 1o. Approve the " Agreement between the Republic of Colombia and the Czech Republic to avoid double taxation and to prevent tax evasion in relation to the tax on the ", signed in Bogotá D. C., on March 22, 2012.
ARTICLE 2o. In accordance with the provisions of Article 1 of Law 7ª of 1944, the " Agreement between the Republic of Colombia and the Czech Republic to prevent double taxation and to prevent tax evasion in relation to income tax, " signed in Bogotá, D.C., on March 22, 2012, which is approved by the first article of this law, will force the Colombian State from the date the link is perfected. international regarding the same.
ARTICLE 3o. This law governs from the date of its publication.
Dada en Bogotá, D. C.,
Presented to the honorable Congress of the Republic by the Minister of Foreign Affairs and the Minister of Finance and Public Credit.
The Minister of International Relations,
MARIA ANGELA HOLGUIN HANG.
The Minister of Finance and Public Credit,
MAURICIO CÁRDENAS SANTAMARIA.
EXECUTIVE BRANCH OF PUBLIC POWER
PRESIDENCY OF THE REPUBLIC
Bogotá, D. C., October 3, 2012
Authorized. Submit to the consideration of the honorable Congress of the Republic for the constitutional effects
(Fdo.) JUAN MANUEL SANTOS CALDERÓN
Minister of Foreign Affairs
(Fdo.) Maria Angela Holguin Cuellar.
DECRETA:
ARTICLE 1o. Approve the "Agreement between the Republic of Colombia and the Czech Republic to avoid double taxation and to prevent tax evasion in relation to income tax", signed in Bogotá D. C., on March 22, 2012.
ARTICLE 2o. In accordance with the provisions of Article 1 of Law 7ª of 1944, the " Agreement between the Republic of Colombia and the Czech Republic to prevent double taxation and to prevent tax evasion In connection with the income tax ", signed in Bogotá, D.C., on March 22, 2012, which is approved by article 1 of this law, it will force the Colombian State from the date on which the international link with respect to the same.
ARTICLE 3o. This law governs from the date of its publication.
The President of the honorable Senate of the Republic,
JOHN FERNANDO CHRIST BUSTS.
The Secretary General of the honorable Senator of the Republic,
GREGORIO ELJACH PACHECO.
The President of the honorable House of Representatives,
HERNAN PENAGOS GIRALDO.
The Secretary General of the honorable House of Representatives,
JORGE HUMBERTO MANTILLA SERRANO.
COLOMBIA-NATIONAL GOVERNMENT
Communicate and comply.
Execute, upon revision of the Constitutional Court, pursuant to article 241-10 of the Political Constitution.
Dada en Bogotá, D. C., at December 17, 2013.
JUAN MANUEL SANTOS CALDERÓN
The Foreign Minister,
MARIA ANGELA HOLGUIN HANG.
The Minister of Finance and Public Credit,
MAURICIO CÁRDENAS SANTAMARIA.
* * *
1. NATIONAL PLANNING DIRECTORATE. Bases of the National Development Plan 2010-2014 "Prosperity for All", Bogotá, 2011. pp. 513-514.
2. KOBETSKY, MICHAEL. International Taxation of Permanent Eteblishments: Principies and Policy. Cambridge University Press, Cambridge, 2011. p. 1.
3. World Bank (2010).
4. DANE (2011).
5. Centro de Comercio Internacional (2010).
6. Ibid.
7. International Monetary Fund (2011).
8. International Office of Fiscal Documentation (2012).
