The Tax Authority consolidates and updates its doctrine with regards to the request for authorization to increase the useful life of fixed assets

The approval of the Authority is not necessary on the cases set on the second and third paragraph of Article 138 of the Tax Code


In its Revenue Ruling No. 016205 of June 22th 2016, DIAN consolidates and updates the applicable doctrine about the procedure that needs to be carried out in order to change the useful life of depreciable assets that in accordance with their regulation, does not reflects their reality.

The Authority, in accordance with the rulings made by the Supreme Court on Administrative Matters, mentions that in cases where the variation on the life of the assets cannot be determined by the taxpayer, it is authorized to depreciate the value that remains before its useful life is over. Therefore no authorization of the Tax Authority is needed and the only condition that needs to be met is that there are the supporting explanations for this change. In this vein, this situation can take place on events such as those in which the life of the asset is reduced or exhausted for reasons of sudden uselessness.

Additionally, the Colombian Tax Authority mentions that it is also not necessary to request such authorization for the case provided on the third paragraph of Article 138. In other words, it is applicable in cases where the actual useful life of the asset is greater than that one authorized by its regulation. In this case the taxpayer can distribute through the spare period of time the depreciable amount or reduce the deduction according to the effective life of the asset.