OECD Tax Policy Reviews: Colombia 2022

image of OECD Tax Policy Reviews: Colombia 2022

This report is part of the OECD Tax Policy Reviews publication series. The Reviews are intended to provide independent, comprehensive and comparative assessments of OECD member and non-member countries’ tax systems or zoom in on a specific tax policy topic. This report provides an in-depth assessment of Colombia’s tax expenditure reporting practices and makes specific recommendations as to how the measurement of tax expenditures and their reporting can be improved. In particular, the review introduces a benchmark for the corporate and personal income tax and the value-added tax and calculates revenue forgone from income tax expenditures.


VAT revenue forgone linked to the Free Trade Zone exemption

The illustrations on the following pages visualize how the interaction of VAT exclusions and the FTZ exemption give raise to VAT revenue forgone in scenarios 3 and 4. Arrows represent financial flows. For simplicity, the illustrations only focus on FTZ users purchasing inputs from the national territory but the same reasoning holds for inputs purchased from outside Colombia.


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