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Transfer pricing in Colombia: related parties, documentation thresholds, deadlines, advance pricing agreements and penalties

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Last verified: 2026-10-26 · Status: Stable

Colombian taxpayers dealing with foreign related parties, or with affiliates in free trade zones, must price those transactions at arm's length using one of five methods. Above 100,000 UVT of gross equity or 61,000 UVT of gross income they must file an informative return and a local and master file each September, and large groups a country by country report in December. Penalties run up to 4 percent of undocumented transactions plus loss of the deduction, and returns stay open for five years.

USD figures use the TRM of COP 3,158.43 per US dollar, valid 24 to 26 October 2026, from the official TRM series certified by the Superintendencia Financiera and published on datos.gov.co. UVT amounts use the 2026 UVT of COP 52,374 (DIAN Resolución 000238 de 2025). Conversions are for orientation only.

Key facts

Transfer pricing documentation threshold, gross equity	100000 UVTEstatuto Tributario art. 260-5 num. 1, as of 2026-10-26 · in force
Transfer pricing documentation threshold, gross income	61000 UVTEstatuto Tributario art. 260-5 num. 1, as of 2026-10-26 · in force
Country by country report threshold, consolidated group income	81000000 UVTEstatuto Tributario art. 260-5 num. 2, as of 2026-10-26 · in force
Review period for income tax returns of taxpayers under transfer pricing rules	5 yearsLey 2010 de 2019 art. 117, as of 2026-10-26 · in force
Penalty for not filing transfer pricing documentation, share of related party transactions (cap 25,000 UVT)	4 %Estatuto Tributario art. 260-11 lit. A num. 3, as of 2026-10-26 · in force
Advance pricing agreement coverage: year of signature, prior year and up to three following years	prior year plus up to 3 following Estatuto Tributario art. 260-10, as of 2026-10-26 · in force
UVT for 2026	52374 COPDIAN Resolución 000238 de 2025, as of 2026-10-26 · in force
TRM used for USD conversions (valid 24 to 26 October 2026)	3158.43 COP per USDOfficial TRM series, Superintendencia Financiera de Colombia, as of 2026-10-24 · in force

The rule

1. Parties are related for tax purposes in a broad set of cases, including: subordination (more than 50 percent of capital, majority voting power, dominant influence, or the right to 50 percent of profits, held directly or through subsidiaries, including by individuals or non corporate vehicles); a branch, agency or permanent establishment and its head office; two subsidiaries of the same parent or owner; companies more than 50 percent owned by relatives up to the second degree; transactions through unrelated intermediaries; companies with more than 50 percent of gross income from their shareholders; and consortia, joint ventures and other collaboration arrangements.Estatuto Tributario (Decreto 624 de 1989), added by Ley 1607 de 2012 art. 111, Art. 260-1, num. 1 to 5, 2012-12-26 official text · verified 2026-10-26

2. Income taxpayers that transact with related parties abroad must determine their income, costs, deductions, assets and liabilities from those transactions under the arm's length principle, and DIAN may adjust them. The same applies to transactions of a Colombian permanent establishment, to transactions with related parties located in Colombian free trade zones, and the regime has effect only for income tax.Estatuto Tributario, as amended by Ley 1607 de 2012 art. 112, Art. 260-2 and its paragraph, 2012-12-26 official text · verified 2026-10-26

3. Five methods may be used: comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split. For commodities the comparable uncontrolled price method using quoted prices is the most appropriate and must be used, with the pricing date proven by reliable documents; otherwise DIAN may use the shipment date. Used fixed assets are tested against the original purchase invoice less depreciation.Estatuto Tributario, art. 260-3 as amended by Ley 1607 de 2012 art. 113 and Ley 1819 de 2016 art. 107, Art. 260-3, num. 1 to 5, 2016-12-29 official text · verified 2026-10-26

4. For financing transactions comparability includes principal, term, credit rating, guarantees, solvency of the debtor and interest rate. If the terms of a related party loan do not match market practice, interest is not deductible whatever the rate and the operation is treated as a capital contribution, with the payments treated as dividends.Estatuto Tributario, as amended by Ley 1607 de 2012 art. 114, Art. 260-4, num. 1 lit. a, 2012-12-26 official text · verified 2026-10-26

5. Taxpayers with gross equity of 100,000 UVT or more at year end or gross income of 61,000 UVT or more in the year that transact with foreign related parties must prepare and send supporting documentation: a master file with the group's global information and a local file for each type of transaction, with financial information signed by the legal representative and the accountant or statutory auditor. Colombian parent entities of groups with consolidated income of 81,000,000 UVT or more in the prior year, designated entities, and Colombian group members with 20 percent or more of group income whose foreign parent did not file, must file a country by country report. Documentation must be kept for five years or the review period of the return, whichever is longer.
Cost to do it: The documentation is prepared by the taxpayer, usually with transfer pricing advisers; fees are market priced and not set by law.
Example: 2026 thresholds: gross equity of COP 5,237,400,000 or gross income of COP 3,194,814,000; country by country report from COP 4,242,294,000,000 of consolidated income. / About US$1,658,229 of equity, US$1,011,520 of income, and US$1,343,165,433 of group income.Estatuto Tributario, as amended by Ley 1819 de 2016 art. 108, Art. 260-5 num. 1 and 2, par. 2, 2016-12-29 official text · verified 2026-10-26

6. Taxpayers above the same thresholds must also file an annual transfer pricing informative return covering their related party transactions.Estatuto Tributario, as amended by Ley 1607 de 2012 art. 119, Art. 260-9, 2012-12-26 official text · verified 2026-10-26

7. Transactions with persons in jurisdictions classified by the government as non cooperative or of low or no taxation, or with entities under preferential regimes, are subject to transfer pricing documentation and the informative return regardless of the taxpayer's size; where such a recipient is also related, the taxpayer must document the functions, assets, risks and all costs incurred by it. The government lists these jurisdictions by regulation using criteria such as low or no nominal tax, lack of information exchange, lack of transparency and lack of substance.Estatuto Tributario, as amended by Ley 1819 de 2016 art. 109, Art. 260-7, num. 1 and 2, par. 2 and 3, 2016-12-29 official text · verified 2026-10-26

8. The informative return and the local and master files are due in September, between the seventh and the sixteenth business day according to the last digit of the NIT; the country by country report is due by the tenth business day of December of each year.Decreto 1625 de 2016, as replaced by Decreto 2229 de 2023 art. 1, Art. 1.6.1.13.2.28 and art. 1.6.1.13.2.29, 2023-12-22 official text · verified 2026-10-26

9. DIAN may sign advance pricing agreements, unilateral or with other tax authorities, covering the year of signature, the prior year and up to the three following years. For unilateral requests DIAN has up to nine months to accept or reject the request and the process must end within two years of acceptance, otherwise the request may be treated as dismissed.Estatuto Tributario, as amended by Ley 1819 de 2016 art. 112, Art. 260-10, 2016-12-29 official text · verified 2026-10-26

10. Penalties on supporting documentation: late filing within five business days, 0.05 percent of the transactions to document, capped at 417 UVT; later, 0.2 percent per month or part month, capped at 1,667 UVT per month and 20,000 UVT in total; inconsistencies, 1 percent of the transaction, capped at 5,000 UVT; failure to file, 4 percent of the related party transactions, capped at 25,000 UVT (6 percent and 30,000 UVT for transactions with tax havens), plus disallowance of the related costs unless the documentation is filed before the official assessment; omissions, 2 percent, capped at 5,000 UVT (1,400 UVT where documented transactions are below 80,000 UVT).
Example: 2026 caps: 417 UVT = COP 21,839,958; 20,000 UVT = COP 1,047,480,000; 25,000 UVT = COP 1,309,350,000. Not filing documentation on COP 10,000,000,000 of related party purchases: 4 percent is COP 400,000,000, within the COP 1,309,350,000 cap. / Caps of about US$6,915, US$331,646 and US$414,557; the example penalty is about US$126,645.Estatuto Tributario, as amended by Ley 1819 de 2016 art. 111 (text corrected by Decreto 939 de 2017 art. 3), Art. 260-11, lit. A num. 1 to 4, 2016-12-29 official text · verified 2026-10-26

11. Income tax returns of taxpayers subject to the transfer pricing regime become final five years after filing deadline, instead of the general three years.Ley 2010 de 2019, applying to art. 147 and art. 714 of the Estatuto Tributario, Ley 2010 de 2019 art. 117, 2019-12-27 official text · verified 2026-10-26

Obligation	Who	Deadline	Norm
Arm's length pricing	All income taxpayers with foreign related parties or related parties in free trade zones	Each transaction	Art. 260-2
Informative return	Gross equity of 100,000 UVT (COP 5,237,400,000) or gross income of 61,000 UVT (COP 3,194,814,000), or any transaction with a low tax jurisdiction	September, 7th to 16th business day by NIT	Art. 260-9; Decreto 1625 art. 1.6.1.13.2.28
Local file and master file	Same thresholds (master file if part of a multinational group)	September, 7th to 16th business day by NIT	Art. 260-5 num. 1; Decreto 1625 art. 1.6.1.13.2.29
Country by country report	Group consolidated income of 81,000,000 UVT or more	10th business day of December	Art. 260-5 num. 2; Decreto 1625 art. 1.6.1.13.2.29

Transfer pricing obligations in 2026 (UVT of COP 52,374)

Worked example

A Colombian distributor with gross income of COP 4,000,000,000 (about US$1,266,453) that buys products from its foreign parent exceeds the 61,000 UVT income threshold (COP 3,194,814,000), so it must file the informative return and the local file in September of the following year, and its 2026 return stays open for five years instead of three.

Step by step

Map related parties under the broad art. 260-1 tests, including companies more than 50 percent owned by the same family and free trade zone affiliates.
Test gross equity and gross income against 100,000 and 61,000 UVT at year end.
Price intercompany transactions under one of the five methods and document the choice; for commodities use quoted prices and record the pricing date.
File the informative return and the local and master files in September, and the country by country report by the tenth business day of December if applicable.
Consider an advance pricing agreement for recurring large flows; it can cover the prior year and up to three following years.

Common traps

Transactions with low tax jurisdictions must be documented whatever the taxpayer's size (art. 260-7 par. 2).
Related party loans on non market terms are treated as equity and the payments as dividends, with no interest deduction (art. 260-4 num. 1 lit. a).
Not filing documentation costs 4 percent of the transactions and the deduction of the related costs, unless filed before the official assessment (art. 260-11).
Returns of taxpayers under transfer pricing rules stay open five years (Ley 2010 de 2019 art. 117), so keep the documentation at least that long (art. 260-5 par. 2).

Sources

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