DIAN REVENUE RULING
DIAN refers to the new withholding system applicable to labor income and other changes introduced by Law 1819 of 2016
DIAN makes reference to the term for the application of article 388 of the Tax Code, the application of limitations among others.
Through Revenue Ruling No. 004773 of February 24th 2017, the Colombian Tax Authority – DIAN – refers to the type of payments to which Article 383 of the Tax Code is applicable, considering the modifications introduced by Law 1819 and the elimination of article 384.
For this purpose, the Tax Authority sets that prior to the amendment of article 383, this provision was applicable to payments made to individuals classified under the employees category, under Law 1819, such provision is applicable to payments originated under the employment relationship since March 1, 2017. This implies that during the months of January and February 2017, such provision is applicable for individuals classified on the employees’ category.
In addition, DIAN clarifies that the limitation to deductions and exempt income included on article 388 is not applicable for January and February 2017.
Furthermore, it is clarified that Article 336 of the Tax Code contains to two limits. The first one that sets that exempted income and deductions of the labor cell cannot exceed 40% of the result of subtracting the income from this cell and those considered as not constitutive of income. Regarding the second limit, it establishes that said result cannot exceed 5040 Tax Value Units.