Recently, the Colombian National Tax Authority (DIAN) published Ruling 014495 of 6 June 2019, which sets out tax of profits in shares or stock dividend. The ruling includes the following points:
- Article 30 of the Tax Code (TC) provide the definition of dividends and participations for tax purposes as: “Any distribution of benefits, in money or in kind , charged to equity that is made to the partners, shareholders, community members, associates, subscribers or similar, except the decrease of capital and the premium in placement of shares.”
- Article 36-3 of the Tax Code (TC) clarifies that the companies whose shares are publicly traded, neither does it constitute income or occasional gain are non-taxable income in accordance with articles 48 and 49 of the Tax Code (TC). But, the profits from distribution of shares or social interest that are recognized as income will be determined as taxable income.
- Articles 242, 242-1 and 245 of the Tax Code (TC) established special rates for dividends and participations received by resident natural persons, national societies, societies and foreign entities and non-resident natural persons, recognized as income not constituting income or occasional gain in the terms of articles 48 and 49 of the ET, will be subject to withholding tax.
