The DTT contains a number of provisions that were not previously included in treaties signed by Colombia and are aligned with the OECD's BEPS project.

The Government of Colombia and the United Arab Emirates (UAE) signed a Treaty to Avoid Double Taxation (DTT) on November 12, 2017. The DTT includes new regulations that are intended to reduce the tax burden on transactions that take place between these jurisdictions. Specifically, the DTT's preamble expressly provides that the purpose of the DTT is to avoid double taxation without creating opportunities for no taxation or reduced taxation through treaty shopping.

The DTT follows many of the recommendations included in the BEPS Action Plan, and contains some new provisions not previously included in treaties signed by Colombia.

The DTT denies benefits to legal entities that are resident in both States. Additionally, the DTT does not include activities related to the exploration and exploitation of natural resources in the permanent establishment (PE) definition. The list of activities that do not trigger the existence of a PE is subject to the condition that those activities have "an auxiliary or preparatory nature." Moreover, the PE definition includes the anti-fragmentation rule recommended by BEPS Action Plan 7.

The DTT also includes a limitation of benefits clause under which the residents of the UAE qualified to ask for the benefits established by Articles 8, 10, 11 12 and 13 of the DTT are determined. In addition, the DTT includes a principal purpose test clause.

Under the DTT, the following withholding tax rates will apply to passive income:

Before the Treaty can enter into force, Colombia's Congress must first approve a law to adopt the Treaty. After Congress approves the law, Congress will send the Treaty to the Constitutional Court for a constitutional review. Once the Treaty is approved, the countries will exchange diplomatic notes, reporting that they have completed their internal approval process.

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