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MODIFICATIONS TO EXEMPT INCOME

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MODIFICATIONS TO EXEMPT INCOME

Corporate income tax 

New exempted profits are created for companies that develop technology and rural areas in Colombia. Some exempted profits are upheld and others are eliminated  

 

The Financing Law bill establishes that companies that develop technology and rural areas in Colombia, under the terms of the Law, will be exempted from the income tax for a period of 5 and 10 years respectively. Some requirements that highlight are: (i) the domicile and principal address must be within Colombian territory; (ii) it shall have an exclusive corporate purpose; (iii) be incorporated and start activities before 31 of December of 2021; (iv) have an annual  gross income lower than 80.000 UVT (2.652.480 COP); (v) hire at least 10 employees (other than administrative personnel); (vi) introduce the project to the respective Ministry in order to request for its approval; (vii) comply with minimum investing amounts, among others.

The exempted profit for the sale of energy generated by means of wind energy, biomass, agriculture wastes and solar energy, among others, gained by energy generators  would be for a period of 15 years counted from 2017 is upheld. Also, the exempted profits established in international treaties and profits derived from the first sale of low cost housing are upheld.

The following exempted profits will be eliminated: (i) gains on the transfer of real estate property to develop low cost housing; (ii) interests caused by low cost housing mortgages; (iv) profits derived from forestry projects, among others.