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The latest addition to our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of digitalisation of business.

20 May 2024 - Colombia issues guidance on its Significant Economic Presence rule

The Colombian tax authority (DIAN) has issued Ruling 305 (in Spanish), addressing the application of new rules for non-residents with a SEP in the country. DIAN reiterated what triggers a SEP in Colombia, and confirmed that payments made to non-residents with SEP (who have opted to file an annual tax return in Colombia and have requested that no withholding tax is applied), can be fully deducted by the payer. The ruling also clarifies exchange rate considerations, withholding obligations for financial entities, and specifics for digital accommodation services, among other questions.

Under Colombia’s new SEP rule, applicable from 1 January 2024, income from the sale of goods or the provision of qualified digital services to Colombian customers and/or users becomes taxable for CIT purposes when certain conditions are met. Such income is subject to either a 10% withholding tax on the total amount paid (i.e., gross income) or, at the provider’s election, a 3% tax on gross revenues. Further background on Colombia’s SEP rule changes can be read in this December 2023 PwC Tax Insight.

16 May 2024 - Kenya to replace DST with taxes on SEP basis and income via digital platforms