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MODIFICATION TO THE DETERMINATION OF ASSETS PRICE OF SALE

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MODIFICATION TO THE DETERMINATION OF ASSETS PRICE OF SALE

Corporate income

Tax Adoption of anti-abuse rules and rules to determine the price for transferring assets

 

The Tax Administration will be allowed to reject a price of transfer if it differs in more than 15% of its fair market value. In the case of services, the price would also attend fair market value criteria.

The price of sale of real estate, starting from January 1st of 2019, shall be paid and wire-transferred thought financial entities in order to be recognized as tax basis for income tax purposes. Additionally, the public deed shall contain a declaration under oath of the parties involved stating that the price set-out is real and true, and in case not, for tax purposes, the taxable base of the transaction would be equal to four times the value incorporated in the public deed. This will also apply to real estate acquired by trusts, private funds and similar vehicles.

The price for transferring shares of Colombian entities not listed in the Colombian stock bureau would be its intrinsic value increased in 30%, unless a lower price can be supported with technical evidence. Notwithstanding the foregoing, the Tax Administration could use methods such as the present value of discounted cash flows or the market multiples of EBITDA to determine the price or value of the transfer.