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SCHEDULAR ITEMS OF INCOME AND AN INCREASE IN THE INCOME TAX RATE FOR INDIVIDUALS

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SCHEDULAR ITEMS OF INCOME AND AN INCREASE IN THE INCOME TAX RATE FOR INDIVIDUALS

Equity tax and voluntary disclosure program

A general schedule would be established for individuals. It would include any item of labor income, pensions, capital income and non-labor income and would be progressively taxed up to a maximum rate of 37% that would be applicable to individuals whose income exceeds COP$434,343,600 (approx. US$135.000)

 

The bill presented to Congress proposes: (i) to unify again the income items from labor, pensions, capital and non-labor into a general income schedule and (ii) deal in a different schedule with the income derived from dividends and participations.

Once subtracted the income that should be treated as non-taxed or that is subject to a special income tax exemption within the general income schedule, individuals could reduce their taxable base by 35% due to costs and expenses.

Income included in the general income schedule would be taxed under a marginal and progressive tax rate that ranges between 0% and 37% depending on the level of income of the individual:

Table 1

Conversely, the tax rate applicable for income associated to the schedule for dividends and participations would vary as follows: 33% for dividends that would be distributed as taxed in 2019 and to a progressive rate between 0% and 10% for those dividends and participation that can be distributed as non-taxable.

Table 2