X

Legal Bulletin

logo

DIAN REVENUE RULING

The distribution of profits in shares or the capitalization of the equity revaluation account is taxed according to the limits set forth in articles 48 and 49 of the Tax Code

DIAN analyzed whether dividends distributed in shares are considered to generate income which is not taxed with income tax or capital gains tax for shareholders without any limit

 

In its Revenue Ruling No. 0848 of 25th April 2017, DIAN stated that according to article 37 of Law 1819 of 2016, which modified article 36-3 of the Tax Code, (i) the distribution of profits in shares, or (ii) the capitalization of the equity revaluation account, generate income which is generally not subject to income or capital gains tax.

In order to determine any portion of the distribution of profits in shares treated as exempt income, the company distributing the profits shall apply the proportions and procedure found in article 48 and 49 of the Tax Code.