Contributed By Baker McKenzie S.A.S.
The Colombian Tax Code established that non-profit corporations, foundations and associations are subject to a special tax regimen with respect to income tax (20% rate) and complementary taxes provided that they always comply with the following conditions:
25% of the gifts made to entities of the special tax regime can be credited for income tax purposes. However, the above-mentioned requisites must be met.
Entities approved by the Colombian Tax Office as eligible for the special tax regime are subject to income tax at a 20% rate. However, any income surplus is considered as exempt, provided that the funds are destined directly or indirectly for programmes that develop the entity's social purpose and meritorious activities. Any excess benefits or surplus that are not reinvested in programmes that develop the entity's social purpose are deemed as taxable for the next fiscal year.
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