Colombia Transfer Pricing

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Year. Año gravable 2026 (calendar year), with the informative return and documentation due in September 2027 and the country-by-country report in December 2027. Thresholds are in UVT; one UVT in 2026 is COP 52,374 (DIAN Resolución 000238 of 15 December 2025).

Which law. Estatuto Tributario (ET) arts. 260-1 to 260-11, as consolidated on the Senate's official site (last updated there 15 October 2026), and the Decreto Único Reglamentario 1625 de 2016 (DUR), arts. 1.2.2.1.1 to 1.2.2.6.8 (as amended by Decreto 2120 de 2017) and 1.6.1.13.2.27 to 1.6.1.13.2.29 (deadlines, as substituted by Decreto 2229 de 2023), on DIAN's normograma. Filing mechanics: DIAN Resolución 1210 de 2022.

Related Colombia skills, linked rather than repeated:

• co-corporate-income-tax: the 35% rate any adjustment is taxed at, thin capitalisation (art. 118-1) and the income tax return.
• colombia-cross-border: withholding on payments abroad, dividends and treaties.
• colombia-income-tax: individuals (an individual with related-party transactions abroad is also in scope).

Who this applies to

Every income taxpayer with transactions with related parties abroad must price them at arm's length (art. 260-2). The rule also covers:

• a taxpayer in the national customs territory dealing with a related party in a free zone (art. 260-2);
• a Colombian permanent establishment of a foreign entity, for transactions concluded in its favour by a related foreign entity, and Colombian residents dealing with each other through a foreign PE (art. 260-2);
• any transaction with a person in a non-cooperative, low or no tax jurisdiction or a preferential tax regime, whether related or not (art. 260-7 par. 2).

Purely domestic transactions between related Colombian taxpayers outside free zones are not in the regime. Transfer pricing affects income tax only (art. 260-2 par.).

Related (vinculados), art. 260-1. In short:

• Subordinates: more than 50% of the capital held by the parent, directly or through subordinates (non-voting preference shares excluded); the votes for the minimum decision majority or to elect most of the board; dominant influence by contract; control by individuals or non-corporate vehicles; or a right to 50% of the profits.
• Branches, agencies and permanent establishments with their head office or enterprise.
• Other cases: two subordinates of one parent or of one person; companies where one person holds more than 50% of the capital or controls decisions of both; companies more than 50% owned by spouses or relatives to the second degree; transactions through unrelated intermediaries; more than 50% of gross income from the shareholders or partners; and consortia, joint ventures and other collaboration contracts.

Related status covers every entity in the group even when the parent is abroad.

Rates, bands and thresholds

Item	Figure	Year	Source URL
UVT	COP 52,374	2026	https://normograma.dian.gov.co/dian/compilacion/docs/resolucion_dian_0238_2025.htm
Form 120 and documentation: size test	gross assets on the last day of the year of 100,000 UVT (COP 5,237,400,000) or more, or gross income of the year of 61,000 UVT (COP 3,194,814,000) or more, with transactions with related parties abroad or in a free zone (arts. 260-5(1), 260-9 ET)	2026	http://www.secretariasenado.gov.co/senado/basedoc/estatuto_tributario_pr010.html
Same, regulation	same thresholds; also PEs, branches and agencies of foreign entities (DUR art. 1.2.2.1.2(1))	2026	https://normograma.dian.gov.co/dian/compilacion/docs/decreto_1625_2016.htm
Non-cooperative, low-tax or preferential regime counterparties	Form 120 and documentation required whatever the taxpayer's size (art. 260-7 par. 2; DUR art. 1.2.2.1.2(2))	2026	http://www.secretariasenado.gov.co/senado/basedoc/estatuto_tributario_pr010.html
Local file (informe local), per type of transaction	not required for a type whose annual total is 45,000 UVT (COP 2,356,830,000) or less; for transactions with non-cooperative, low-tax or preferential regimes, 10,000 UVT (COP 523,740,000) or less (DUR art. 1.2.2.1.2)	2026	https://normograma.dian.gov.co/dian/compilacion/docs/decreto_1625_2016.htm
Loans: what counts toward the thresholds	the principal, not the interest (DUR art. 1.2.2.1.2 par. 1)	2026	same
Master file (informe maestro)	required from taxpayers that meet the local file thresholds and belong to a multinational group (DUR art. 1.2.2.1.2 par. 4)	2026	same
Country-by-country report	ultimate parent resident in Colombia with foreign subsidiaries, branches or PEs and prior-year consolidated income of 81,000,000 UVT or more; or a Colombian entity designated by a foreign parent; or Colombian entities with 20% or more of group income where the parent has not filed (art. 260-5(2))	2026	http://www.secretariasenado.gov.co/senado/basedoc/estatuto_tributario_pr010.html
Arm's length range	interquartile range allowed; a result outside the range is adjusted to the median (art. 260-3; DUR art. 1.2.2.2.4.5)	2026	same; https://normograma.dian.gov.co/dian/compilacion/docs/decreto_1625_2016.htm
Corporate rate applied to any adjustment	35% (art. 240 ET; see co-corporate-income-tax)	2026	http://www.secretariasenado.gov.co/senado/basedoc/estatuto_tributario_pr010.html
Keeping the documentation	5 years from 1 January after the year it was prepared, or the period the income tax return stays open, whichever is longer (art. 260-5 par. 2)	2026	same
APA	effect for the year signed, the year before and up to 3 following years; DIAN has 9 months to accept a unilateral request and 2 years to conclude (art. 260-10)	2026	same

The base

The arm's length principle (art. 260-2). Income, costs, deductions, assets and liabilities from related-party transactions in scope are set as independent parties would have set them in comparable transactions.

Methods (art. 260-3). The taxpayer picks the most appropriate of:

1. Comparable uncontrolled price. Mandatory for commodities (a quoted price is the reference, at the pricing date the contracts prove, otherwise DIAN may use the shipping date). For used tangible assets bought from a related party: the invoice price of the new asset from an independent party less depreciation.
2. Resale price: resale price to independents less the gross margin (gross profit / net sales) of comparable independents.
3. Cost plus: cost plus the gross mark-up (gross profit / cost of sales) of comparable independents.
4. Transactional net margin: operating profit against assets, sales, costs, expenses or cash flow.
5. Profit split: routine returns first, then the residual profit split as independents would.

The choice weighs the functional analysis, reliable data, the degree of comparability and the reliability of adjustments. Internal comparables come first (art. 260-4 par.). Unlisted shares and hard-to-compare assets are valued by generally accepted financial methods, in particular discounted future income; book value (valor patrimonial or intrínseco) is never accepted (art. 260-3 par. 1). Intragroup services and cost-sharing need proof the service was really provided (par. 2). Restructurings that move functions, assets or risks abroad must be paid for at arm's length (par. 3).

Comparability (art. 260-4). The characteristics of the transaction, functions, assets and risks, contract terms against conduct, economic circumstances and business strategies. AUDIT FLASH POINT: related-party loans. If a loan's amount, term, rating, guarantee, solvency and rate do not match market practice, the interest is not deductible at all and the loan is treated as a capital contribution, with the interest treated as a dividend (art. 260-4(1)(a); DUR art. 1.2.2.1.3). Thin capitalisation (art. 118-1) applies on top.

The range and the median (DUR art. 1.2.2.2.4.5). With two or more comparable results, build the range; the interquartile method is optional but, if used, follows this order:

1. Sort the results in ascending order and number them 1 to n.
2. Median position = (n + 1) / 2. If it has decimals, take the value at the whole-number position plus the decimal times the difference to the next value.
3. 25th percentile position = (median position + 1) / 2; same interpolation.
4. 75th percentile position = (median position minus 1) plus the 25th percentile position; same interpolation.

A result inside the range is arm's length. A result outside it is moved to the median (art. 260-3).

Payments to non-cooperative or preferential regimes (art. 260-7 par. 3). Payments to a related party there are not deductible unless the taxpayer documents that party's functions, assets, risks and all its costs.

Corresponding adjustments (art. 260-6). If a treaty partner adjusts the price of its resident and DIAN accepts it, the Colombian party may file a correcting return without penalty.

What is not changed by TP. For taxpayers in the regime who show arm's length pricing, the general valuation rules of arts. 35, 90, 124-1, 124-2, 143 par. 2, 151, 152 and 312(2) and (3) do not apply (art. 260-8).

Deadlines and filing

What	When (for año gravable 2026)	How	Source
Informative return, Form 120	September 2027, by the last digit of the NIT: 1 on the 7th business day, 2 on the 8th, ... 9 on the 15th, 0 on the 16th	Upload Hoja 2 through the prevalidador (Formato 1125 versión 13) by "presentación de información por envío de archivos", then fill, sign and file the main sheet of Form 120 under "Diligenciar y Presentar", both with the electronic signature (IFE)	DUR art. 1.6.1.13.2.28; DIAN Resolución 1210 de 2022, art. 2
Local file and master file	same September dates by NIT	virtual, through DIAN's electronic services; for año gravable 2025 DIAN used Formato 1729 versión 8 (local) and Formato 5231 versión 2 (master)	DUR art. 1.6.1.13.2.29(1); DIAN press note on AG 2025
Country-by-country report	10th business day of December 2027, whatever the NIT	as DIAN specifies	DUR art. 1.6.1.13.2.29(2)
Notification of the CbC filer	the Colombian group entity tells DIAN whether it is the parent or the surrogate	DUR art. 1.2.2.2.3.4	DUR
APA annual report	on the Form 120 dates while the APA has effect	to DIAN's Director General	DUR art. 1.2.2.4.10

The order of work: (1) list related parties and in-scope counterparties; (2) test the 100,000 / 61,000 UVT thresholds on the year's gross assets and income; (3) group transactions into types (DUR art. 1.2.2.3.2) and test each type against 45,000 UVT or 10,000 UVT; (4) do the functional and economic analysis and set prices or adjust; (5) carry any adjustment into the income tax return (Form 110, April or May 2027; see co-corporate-income-tax); (6) file Form 120 and the files in September 2027. The financial information in the documentation is signed by the legal representative and the accountant or statutory auditor (art. 260-5(1)).

Penalties and interest

Art. 260-11 ET. Penalties capped in UVT use the UVT of the year the penalty is set; the 2026 figure is shown for orientation.

Documentation (local and master file), part A:

Breach	Penalty	Cap
Late, within 5 business days	0.05% of the transactions to be documented	417 UVT
Late, after 5 business days	0.2% of the transactions to be documented per month or part month	1,667 UVT a month; 20,000 UVT in total
Inconsistencies	1% of the transaction concerned (0.5% fallbacks)	5,000 UVT
Not filed	4% of the related-party transactions not documented (1% fallbacks), plus loss of the costs and deductions unless filed before the official assessment; 6% (2% fallbacks) for tax-haven transactions	25,000 UVT; 30,000 UVT for tax havens
Information omitted	2% of the amount or transaction concerned (1% fallbacks), plus loss of costs; 4% (2% fallbacks) for tax havens	5,000 UVT (1,400 UVT if documented transactions are under 80,000 UVT); 10,000 UVT for tax havens
Correction changing price, method, comparability or range	1% of the corrected transactions; 4% after a special requirement or statement of charges	5,000 UVT; 20,000 UVT

Penalties for inconsistencies and omissions fall to 50% if fixed before the sanction or official assessment (A.6).

Informative return (Form 120), part B:

Breach	Penalty	Cap
Late, within 5 business days	0.02% of the transactions in the regime	313 UVT
Late, after 5 business days	0.1% per month or part month	1,250 UVT a month; 15,000 UVT in total
Inconsistencies	0.6% of the transaction concerned	2,280 UVT
Information omitted	1.3% (2.6% for tax havens) of the amount or transaction concerned, plus loss of costs	3,000 UVT (1,000 UVT under 80,000 UVT of transactions); 6,000 UVT for tax havens
Not filed after a one-month summons	4% of the transactions in the regime	20,000 UVT

Voluntary correction with the penalties at 50% is possible before a statement of charges (B.6). For loans, the penalty base is the principal, not the interest (par. 2). DIAN adds 30% where the taxpayer omits or miscalculates a part B penalty (par. 3). Country-by-country failures fall under art. 651, not part A (art. 260-5 par. 1). Any extra income tax from a TP adjustment bears inaccuracy penalties and late-payment interest under the general rules (see co-corporate-income-tax).

Cross-border points

• Free zones count as "abroad" for TP: a mainland company dealing with a related free-zone user is in scope (art. 260-2).
• Tax havens. The list of non-cooperative and low or no tax jurisdictions is in DUR art. 1.2.2.5.1 (as substituted by Decreto 1496 de 2024); preferential regimes follow the criteria of arts. 1.2.2.6.1 to 1.2.2.6.8. Check the counterparty's country against the current list before testing thresholds.
• Withholding on the payment abroad (interest, royalties, services) is separate from TP: see colombia-cross-border.
• Mutual agreement and corresponding adjustments run through the treaty (art. 260-6).

Two worked examples that recompute

Example 1: does a mid-size SAS file, and which local file sections?

Andina Distribución SAS, a Colombian subsidiary of a Spanish group, had in 2026 gross income of COP 3,600,000,000 and gross assets on 31 December of COP 2,900,000,000. It bought goods from its Spanish parent for COP 2,500,000,000, paid it COP 400,000,000 of management services, and owes it a loan with principal COP 800,000,000. None of the counterparties is in a tax haven.

• Gross income 3,600,000,000 / 52,374 = 68,736 UVT, at least 61,000 UVT, so Form 120 is due and documentation must be prepared, although assets (55,371 UVT, rounded) are under 100,000 UVT.
• Purchases: 47,734 UVT, above 45,000 UVT: local file section required.
• Services: 7,637 UVT: no local file section for this type, but the type still goes on Form 120.
• Loan: principal 15,275 UVT (interest is not counted): no local file section.
• Part of a multinational group and meeting the local file thresholds: a master file is also required.
• Decision: file Form 120 with all three types; prepare the local file for purchases only; file the master file.

name: CO TP 2026, size test and per-type local file thresholds
inputs:
  uvt: 52374
  gross_income: 3600000000
  gross_assets: 2900000000
  purchases: 2500000000
  services: 400000000
  loan_principal: 800000000
steps:
  - income_uvt: gross_income / uvt
  - assets_uvt: gross_assets / uvt
  - income_threshold_cop: 61000 * uvt
  - local_file_threshold_cop: 45000 * uvt
  - purchases_uvt: purchases / uvt
  - services_uvt: services / uvt
  - loan_uvt: loan_principal / uvt
  - purchases_over: purchases - local_file_threshold_cop
  - services_under: local_file_threshold_cop - services
expected:
  income_uvt: 68736.40
  assets_uvt: 55370.99
  income_threshold_cop: 3194814000
  local_file_threshold_cop: 2356830000
  purchases_uvt: 47733.60
  services_uvt: 7637.38
  loan_uvt: 15274.75
  purchases_over: 143170000
  services_under: 1956830000

Example 2: a distributor below the range, adjusted to the median

Andina tests its purchases with the transactional net margin method (operating margin on sales). Its 2026 sales are COP 10,000,000,000 and its operating margin is 1.0%. Seven comparable independent distributors have margins of 1.8%, 2.5%, 3.1%, 4.0%, 4.6%, 6.0% and 7.2% (already sorted).

• Median position (7 + 1) / 2 = 4: median 4.0%.
• 25th percentile position (4 + 1) / 2 = 2.5: 2.5% + 0.5 x (3.1% minus 2.5%) = 2.8%.
• 75th percentile position (4 minus 1) + 2.5 = 5.5: 4.6% + 0.5 x (6.0% minus 4.6%) = 5.3%.
• 1.0% is below the range 2.8% to 5.3%, so it moves to the median of 4.0%.
• Adjustment to taxable income: (4.0% minus 1.0%) x 10,000,000,000 = COP 300,000,000; income tax at 35% = COP 105,000,000, before penalties and interest.
• Decision for the next year: price the purchases so the margin lands inside 2.8% to 5.3% before year end; an adjustment made in the return is taxed, one avoided in the price is not.

name: CO TP 2026, interquartile range and adjustment to the median
inputs:
  sales: 10000000000
  tested_margin: 0.010
  c2: 0.025
  c3: 0.031
  c4: 0.040
  c5: 0.046
  c6: 0.060
steps:
  - median_pos: (7 + 1) / 2
  - median: c4
  - p25_pos: (median_pos + 1) / 2
  - p25: c2 + 0.5 * (c3 - c2)
  - p75_pos: (median_pos - 1) + p25_pos
  - p75: c5 + 0.5 * (c6 - c5)
  - adjustment: (median - tested_margin) * sales
  - tax: adjustment * 0.35
expected:
  median_pos: 4
  median: 0.040
  p25_pos: 2.5
  p25: 0.028
  p75_pos: 5.5
  p75: 0.053
  adjustment: 300000000
  tax: 105000000

Ask the client first

1. The group chart: who holds what, who controls whom, and any free-zone users or tax-haven entities in the group or among counterparties.
2. Gross assets on 31 December 2026 and gross income for 2026, from the income tax return.
3. Every transaction with each related party or tax-haven counterparty in 2026, by type and amount; for loans, the principal, rate, term and guarantees.
4. Whether the group is multinational, where the parent files its country-by-country report, and the group's consolidated income.
5. The last digit of the NIT (deadlines) and any APA in force.
6. Whether a foreign tax authority has adjusted a price on the other side (art. 260-6).

Sources

Source	URL	Read on
DIAN Resolución 000238 de 2025 (UVT 2026 = COP 52,374)	https://normograma.dian.gov.co/dian/compilacion/docs/resolucion_dian_0238_2025.htm	2026-11-11
Estatuto Tributario arts. 240, 260-1 to 260-11 (full text of each, incl. all parágrafos of 260-11), Senate consolidated text updated 15 Oct 2026	http://www.secretariasenado.gov.co/senado/basedoc/estatuto_tributario_pr010.html	2026-11-11
DUR 1625 de 2016, arts. 1.2.2.1.2, 1.2.2.1.3, 1.2.2.2.3.4, 1.2.2.2.4.5, 1.2.2.2.4.6, 1.2.2.4.10, 1.2.2.5.1 (heading), 1.6.1.13.2.28, 1.6.1.13.2.29, DIAN normograma	https://normograma.dian.gov.co/dian/compilacion/docs/decreto_1625_2016.htm	2026-11-11
DIAN Resolución 1210 de 2022, arts. 2, 3 (Form 120 procedure, Formato 1125 versión 13)	https://normograma.dian.gov.co/dian/compilacion/docs/resolucion_dian_1210_2022.htm	2026-11-11
DIAN press note: Form 120 system and prevalidador for AG 2025; local file Formato 1729 v8, master file Formato 5231 v2	https://www.dian.gov.co/Prensa/Paginas/NG-habilitacion-prevalidador-sistema-precios-transferencia-ag-2025.aspx	2026-11-11

Not yet confirmed: the September 2027 calendar dates (only the business-day rule was read); the formats and prevalidador versions DIAN will set for año gravable 2026; the current list of non-cooperative and low-tax jurisdictions in DUR art. 1.2.2.5.1 (the heading was read, not the list); the text of art. 651 ET for country-by-country penalties; the full list of transaction types in DUR art. 1.2.2.3.2.