Tax Alert Colombia - Tax May 27th 2016 Legal Alert www.bakermckenzie.com If you require additional information, please do not hesitate to contact us. Ciro Meza +57 1 6341500 ext. 2572 [email protected] Rodrigo Castillo +57 1 6341500 ext. 2796 [email protected] Carlos Gómez +57 1 6341500 ext. 2573 [email protected] Baker & McKenzie S.A.S. Av. 82 No. 10-62, 6th Floor Bogotá, Colombia Tel.: +57 1 6449595 Fax: +57 1 3762211 New tax ruling regarding legal services income characterization under the Double Taxation Convention in force between Spain and Colombia Recently the Colombian Tax Office revoked its interpretation of "legal advice services" and its tax treatment under the Double Taxation Convention ("DTC") in force between Spain and Colombia. On April 7, 2016 the Colombian Tax Office ("DIAN") issued the tax ruling No. 5945, through which it answered a query regarding the classification of "legal advice services" rendered by a Spanish tax resident to a Colombian tax resident under the DTC. By interpreting the DTC, its protocol and applying the interpretation rules set forth in the Vienna Convention on the Law of Treaties, the DIAN determined that legal services are considered as consulting services, and as such, income derived therefrom is deemed as royalty subject to an income tax withholding of 10% upon gross payment.