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Colombian Tax Authority Rules on the Application of Thin Capitalization Rules for Public Infrastructure Financing

|Approved Changes|Colombia
Colombia

Colombia's National Tax Authority (DIAN) has recently published a ruling that the thin capitalization rules exemption for financial institutions and entities dedicated exclusively to finance public services infrastructure also extend to loans used to finance public infrastructure projects by legal entities or special purpose vehicles.

Colombia's thin capitalization rules generally limit the deductibility of interest for average loans exceeding a 3:1 debt-to-equity ratio in a tax year.

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