Income statement 2023: discounts to which you can apply

In the second half of the year, Natural persons must present their income statement for the taxable year 2022 before the Dian.

(Income declaration: who should do the procedure for the first time?).

Although there are still a few weeks left before the expiration season begins, experts recommend that taxpayers prepare for this obligation now. Even, if possible, it would be key to gather the documentation required to carry out the process and thus avoid possible sanctions.

In addition to getting ahead of the process, taxpayers may also think about applying to the discounts provided by current law for the presentation of this obligation.

Keep in mind that Colombian tax law contemplates a series of income tax discounts that allow the taxpayer’s tax burden to be reduced.

According to the website ‘update’tax discounts are different from tax deductions, since deductions are subtracted from gross income and discounts are subtracted from basic income tax.

(Deadlines for declaring and paying income, VAT and other national taxes).

It is considered that a tax discount is more favorable for the taxpayer than exempt income or income that does not constitute income or occasional gain because it directly affects the tax charged.

The main elements that must be taken into account with respect to this type of tax benefits are their limits, their non-transferable condition and their concurrence.

In the income statement, natural persons can apply some tax discounts enshrined in the law, with which the tax to be charged can be reduced in appropriate cases.

According to the ‘Gerencie’ web portal, the current tax discounts are:

Article 254 of the tax statute contemplates that taxpayers can deduct the taxes they have paid abroad.

This discount is limited to the income tax that would have been paid in Colombia for the same income. This allows that, if the tax rate abroad is higher than that settled in Colombia, the excess or difference is lost.

Article 255 of the tax statute contemplates a tax discount for the investments that the taxpayer makes in order to control, improve or conserve the environment.

According to the rule, only 2 5% of the invested value can be treated as deductible tax.

This tax discount is contemplated in article 256 of the tax statute.

According to what it indicates, only 25% of the amount of the investment can be treated as a tax discount on income tax.

(Income statement: Dian specifies what his taxes are used for).

In addition, it also applies to the following cases:

-Donations made to programs created by higher education institutions, or the Colombian Institute of Educational Credit and Technical Studies Abroad (Icetex).

-Donations received by the National Financing Fund for Science, Technology and Innovation, and the Francisco José de Caldas Fund.

-The remuneration corresponding to the connection of personnel with a doctorate degree in companies that pay income, which is carried out after the issuance of this law.

As indicated in article 257 of the tax statute, donations made to non-profit entities that have qualified in the special regime will be treated as a tax discount of 25% of the investment.

Said tax discount does not apply to all non-profit entities, but rather to those that are qualified in the special regime.

According to what is indicated in the norm of article 257-1 of the tax statute, the scholarships that the taxpayers grant to the athletes for study, can be treated as a tax discount.

But, although the rule does not refer to a tax discount, in practice the effect is the same, since the income tax can be paid with the title that is delivered.

Article 258-1 of the tax statute contemplates the VAT paid on the acquisition of productive fixed assets as a tax discount.

In other words, the sales tax paid on those assets will be deducted in its entirety from the income tax within the general limits.

WITH WEATHER INFORMATION