Korea - Colombia Tax Treaty Concluded


Tax treaty between Korea and Colombia has been concluded for double tax relief and prevention of tax evasion. The treaty became effective from July 3, 2014 and will apply to payments of income to be made on or after January 1, 2015. Key contents of the agreement are as follows:


Main contents

Taxes covered

Article 2

▪ Korea: Individual income tax, Corporate income tax, Special tax for

rural development

▪ Colombia: Income tax and its complementary taxes

Permanent Establishment

Article 5

▪ Building site, construction project, or installation activity which lasts more than six months.

Business Profit

Article 7

▪ Only taxable in the source country for business profit which is

attributable to Permanent Establishment

Shipping and Air transport

Article 8

▪ Taxable in the resident country of the enterprise which is operating

ships and aircraft in international traffic


Article 10

▪ 5% (when the shareholder holds directly at least 20 percent

of the capital of the company paying the dividends)

▪ 15% (when a company which is a resident of Colombia has not

paid income tax on profits distributed to shareholders because of

exemptions or because the profit exceeds the non-taxed limit, the

dividend distributed to beneficial owner who is a resident of Korea)

▪ 10% (in all other cases)

Interest & Royalties

Article 11 &12

▪ 10%

Capital Gains

Article 13

▪ Taxable in the source country in the case where gains are derived

from transfer of shares of a company deriving more than 50 percent

of their value directly or indirectly from immovable property

▪ Taxable in the source country in the case where the recipient of the

gains has at any time during the twelve month period preceding the

transfer directly or indirectly owned shares or other rights

representing capital of such company by 25 percent or more

▪ Taxable in the resident country (in all other cases)

Income from Employment

Article 14

▪ Taxable only in the country where service is rendered

under employment