An Update on Dividend Withholding Tax Rate for Colombia

The Colombia Dividend Withholding Tax Rate for US residents seems to have changed to 7.01% in 2020. This is different than the 10% rate listed in the Dow Jones tax table updated for this year. But according to Deloitte, Tax Foundation and other sites the rate is defined as 8=7.5%.

Colombian oil giant EcoPetrol(EC) paid a dividend of $0.53 per share last month with an ex-dividend date of 12/26 of 2019. For this dividend, my broker charged a dividend withholding tax at the rate of 7.01%.

This rate was charged both in qualified retirement accounts and taxable accounts.

Last year the rate was 7.50% in all accounts. It should be noted ADR fees is in addition to the dividend withholding tax.

It is possible that Ecopetrol’s dividend rate was slightly smaller since it was a special dividend. If I get an update from Investor Relations on this, I will post an update.

In 2018, the rate was 5%. Colombia increased it to 7.50% in 2019.

Disclosure: Long EC

 

 

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