Legal Bulletin



DIAN clarifies the withholding tax applicable to exempt labor income

Income mentioned in numeral 5 of article 206 of the Colombian Tax Code, exceeding 1.000 Tax Value Units (TVU), is subject to withholding


In its Revenue Ruling No. 2140 of January 31th of 2017, the Colombian Tax Authority- DIAN- established that exclusively income from retirement, disability, old-age, survivors and professional risks pensions received after taxable year 1997, exceeding 1.000 TVU, is subject to the marginal withholding rates of article 383 of the Colombian Tax Code.

In this sense, when computing the withholding basis according with article 388 of the Colombian Tax Code for the above mentioned incomes, it is only possible to deduct from this base, exempt income equivalent to 1.000 UVT, since the value exceeding this limit, is treated as taxable income.