German multinational company Siemens submited a request to Colombia’s tax agency to remove its subsidiary from the country’s free trade zone regime.
The energy, industry and healthcare conglomerate said the advantages of operating under the Export Processing Zone, a program giving tax and customs exemptions to companies working within a designated area, did not make up for the administrative burden of complying with the lengthy requirments of the plan, according to financial publication Portafolio.
“We had to make a second company, Siemens Manufacturing, which has increased the administrative burden for the equivalent of 1% of sales,” said Hans-Peter Fend CFO for South America exclusind Brazil.
“We could not automate certain administrative requirements that [Colombia’s tax authority] DIAN has and we need greater flexibility to be able to compete in the market,“ said Fend.
“When we receive the authorization to close the free trade zone, we will merge the two companies to simplify operations and become more flexible in some areas,” Fend added.
