with CINA

The process for negotiating and using the CINA incentive is divided into two parts: the sale of the CINA by the foreign producer—usually through a stock brokerage firm (sociedad comisionista de bolsa)—and the use of the CINA by the Colombian taxpayer who acquires it, for income tax payment purposes.

Below is an overview of the process and its phases:

1. ISSUANCE OF THE CINA

The CINA is issued by the Ministry of Cultures (MinCultura) in the name of the foreign producer beneficiary through the DECEVAL system, which manages an annual quota for issuance. The CINA is issued in dematerialized form, meaning there is no physical certificate.

2. RECEIPT OF THE CINA BY THE BROKERAGE OR OTHER DIRECT DEPOSITOR

The foreign producer beneficiary must previously establish a relationship with a stock brokerage firm or another representative entity, which will act as the direct depositor for the receipt, administration, and sale of the CINA on the secondary market.

The foreign producer may open an investor account in the DECEVAL securities depository in one of two ways:

• By establishing a relationship with a stock brokerage firm, which will open the account on their behalf.

• By submitting the proof of affiliation with a stock brokerage firm when filing the expenditure accreditation process through Proimágenes Colombia. In this case, MinCultura may request the opening of the “investor account” at DECEVAL. This way, at the moment of the issuance of the CINA, the foreign producer may transfer it to his “investment account”.

3. SALE OF THE CINA (FOREIGN PRODUCER)

The foreign producer sells the CINA to individuals or legal entities that are income taxpayers in Colombia, via the secondary market, using a stock brokerage firm and through a transaction system such as Master Trader.

4. PURCHASE OF THE CINA (COLOMBIAN BENEFICIARY)

Any individual or legal entity that is an income taxpayer in Colombia can purchase the CINA.

Colombian producers may purchase the CINA from the foreign producer. This can be done through a secondary market transaction or via an over-the-counter (OTC) sale. The Colombian beneficiary may later sell the CINA to other income taxpayers in Colombia or use it to pay income tax.

If the Colombian beneficiary intends to use the CINA to pay taxes, they must request the brokerage firm to transfer it to a bank authorized to perform this operation.

Currently, this payment can only be made through Bancolombia or GNB Sudameris (corporate branches only).