Colombia has no tax treaty with Denmark, Sweden, Norway or Finland

Colombia has built a reasonable treaty network over the last fifteen years. DIAN lists fourteen conventions in force: Spain, Chile, Switzerland, Canada, Mexico, India, South Korea, Portugal, the Czech Republic, the United Kingdom, Italy, France and Japan, plus the Andean Community regime with Bolivia, Ecuador and Peru.

Denmark, Sweden, Norway and Finland are not on that list. Neither are Germany, Belgium, Austria or Poland.

Watch the distinction between signed and in force, because several published summaries blur it. Colombia has signed conventions with the Netherlands, Luxembourg, Brazil, Uruguay and the United Arab Emirates that DIAN records as not yet in force. A signed treaty confers nothing. If a source lists the Netherlands as a Colombian treaty partner, it is describing a future state.

That absence is invisible in the promotional material and decisive in a project quote. Confirm the current position with DIAN or the Ministerio de Hacienda before you price anything, because treaty networks move, but as things stand a Nordic supplier invoicing services into Colombia has no treaty to fall back on.

What it costs, in arithmetic

Under article 408 of the Estatuto Tributario, payments abroad for technical services, technical assistance and consultancy, and payments of royalties, are subject to withholding at 20 per cent. The withholding is on the gross payment.

Take a commissioning and engineering contract at 200,000 euros with a 30 per cent gross margin, so 60,000 euros of profit and 140,000 of cost.

• Invoice: 200,000
• Withheld at 20 per cent: 40,000
• Received: 160,000
• Your costs: 140,000
• Profit before home tax: 20,000

The withholding took 40,000 of a 60,000 profit. That is an effective rate of 67 per cent on the margin, not 20 per cent on anything. This is the entire reason the absence of a treaty matters: withholding is levied on revenue, and margin is what you actually earn.

With a treaty, that payment would in many cases be either exempt as business profits absent a permanent establishment, or subject to a materially reduced rate. Without one, the domestic rate applies in full.

Can you get it back?

Partly, and it depends on your own country rather than on Colombia.

Most European states give a unilateral credit for foreign tax paid on foreign-source income, so Danish, Swedish, Norwegian and Finnish companies can normally credit Colombian withholding against domestic corporate tax on the same income. Two limits bite in practice. The credit is usually capped at the domestic tax that would have been payable on that income, and Nordic corporate rates are well below 20 per cent of gross. And the credit is against tax on profit, while the withholding was on revenue, so on a 30 per cent margin the Colombian tax exceeds anything your home system will let you credit. The excess is a real cost.

Get your own tax adviser to run the credit position before you decide the answer is fine.

What to do about it

Gross up, and say so early. If the economics only work at 200,000 net, quote 250,000 gross and explain why. Colombian buyers are entirely familiar with this and will not be surprised. What loses deals is discovering it at invoicing.

Split the contract properly. Withholding applies to the categories article 408 names. A contract that is genuinely part supply of goods and part services should be priced and documented as two things, because the goods leg is not a service payment. Do this because it reflects reality, not as a device; DIAN looks at substance, and an artificial split is worse than no split.

Check whether you have created a permanent establishment. Counter-intuitively, having one can improve the position, because a permanent establishment is taxed on net profit under the ordinary regime rather than suffering gross withholding. That is a real planning question and a real compliance burden. See four ways to sell in Colombia.

Look at where in your group the contract sits, and check the list rather than assuming. A Spanish or Portuguese entity within the same group has treaty access that the Danish parent does not. A Dutch one does not, because that convention is signed and not in force. Routing is legitimate where the entity has substance and genuinely performs the work, and it is not legitimate as a paper arrangement; Colombia has anti-abuse rules.

Note that Andean Community Decision 578 does not help you. It relieves double taxation between Colombia, Bolivia, Ecuador and Peru only.

Guatemala is the harder version of the same problem, because it has no treaty with anyone at all: see Guatemala has no double taxation treaty with any country.

Common questions

Does Colombia have a tax treaty with Denmark?

Not as at September 2026. DIAN records fourteen conventions in force, including Spain, Switzerland, the United Kingdom, France, Italy, Portugal, the Czech Republic and Japan, but Denmark, Sweden, Norway, Finland, Germany, Belgium, Austria and Poland are absent. Conventions with the Netherlands, Luxembourg, Brazil, Uruguay and the United Arab Emirates are signed but not in force and confer nothing today.

What is the withholding tax on services paid from Colombia?

Article 408 of the Estatuto Tributario applies a 20 per cent withholding to payments abroad for technical services, technical assistance, consultancy and royalties, calculated on the gross payment. Treaty relief may reduce or eliminate it where a treaty exists.

Can I credit Colombian withholding tax at home?

Usually in part. Most European states give a unilateral credit for foreign tax, capped at the domestic tax on that income. Because the Colombian tax is on gross revenue and the domestic tax is on net profit, a low-margin contract can generate more Colombian tax than you can credit.

Should I gross up my Colombian contract?

If your economics depend on receiving the full fee, yes, and price it into the quote from the start. Colombian counterparties expect this. The failure mode is agreeing a net-looking number and discovering the withholding when the first payment arrives short.