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DIAN REVENUE RULING

Expenses originating from the variability of the foreign exchange rate are not deductible if they arise from technology importation contracts that do not meet the registration requirement

When costs or expenses resulting from the contract are not deductible for failing to comply with the registration requirement, neither will be deductible the expenses generated from the negative adjustment of exchange rates

 

In its Revenue Ruling No. 12578 of May 20th 2016, the Colombian Tax Authority –DIAN— noted that when a liability that should be adjusted for exchange rate differences originates from a non-deductible expense, because of the absence of registration of the technology import contracts, technical assistance and other registrable contracts defined by the law, the adjustment for the exchange rate difference would not be a deductible expense.

Please note that payments arising from licensing, technical assistance, technical services and other technology-related contracts entered with foreign entities, will only be considered as tax deductible expenses in Colombia if such contracts have been dully registered before DIAN.