Are financial returns from foreign investments subject to ICA tax in Bogotá?
The Bogotá District Treasury Department stated in Concept No. 2026EE244858O1 of March 2026 that when financial income is generated from investments held abroad, it cannot automatically be concluded that such income is subject to the Industry and Commerce Tax (ICA).
Accordingly, it is necessary to analyze the specific circumstances of each case to determine whether these revenues form part of the ICA taxable base or whether they should be treated as non-taxable income.
Key Aspects to Be Evaluated
According to the referenced concept, the following factors should be reviewed to determine whether financial income derived from foreign investments is subject to ICA:
- Whether the financial return arises from an activity subject to the Industry and Commerce Tax.
- Whether the investment activity is carried out as a business activity, in accordance with the unifying case law issued by the Council of State.
- Where the activity is deemed to be carried out, applying the territorial rules established in Article 343 of Law 1819 of 2016.
Territorial Rule
In this particular case, it is important to remember that income derived from investments is considered taxable in the municipality or district where the company in which the investment is held has its registered headquarters.
Therefore, when the investments are held in foreign entities and the issuing company is located outside Colombia, the financial returns generated by those investments are not considered subject to the Industry and Commerce Tax in Bogotá.
ICA Tax Return Treatment
Consequently, financial income derived from foreign investments must be included within the taxpayer's total gross income. However, since such income is not subject to ICA, it should be deducted on Line 14 of the tax return, corresponding to "Excluded or Non-Taxable Activities and Other Non-Taxable Income."
This treatment ensures that the income is properly disclosed in the tax return without forming part of the taxable base of the Industry and Commerce Tax.
THIS DOCUMENT REPRESENTS THE PROFESSIONAL OPINION OF OUR FIRM. THE TAX AUTHORITIES MAY NOT NECESSARILY AGREE WITH OUR POSITION. SHOULD YOU REQUIRE FURTHER INFORMATION OR SPECIALIZED PROFESSIONAL ADVICE REGARDING THIS MATTER, PLEASE DO NOT HESITATE TO CONTACT US. WE WILL BE PLEASED TO ASSIST YOU.
