Colombian National Tax Authority (DIAN) has published a ruling regarding the application of amortization of intangible assets. In accordance with ruling, amortization method of an intangible must be decided based on the accounting rules, as long as the yearly aliquot of amortization does not go above 20% of the intangible’s cost basis and that asset must have a certain useful life time, it must be identifiable and measurable consistent with the accounting rules.
Amortization expenditures (more than 20 per cent threshold) which are non-deductible generate a difference that would be carried forward to the subsequent tax years until the end of the useful life of intangible asset, without exceeding 20 per cent of the asset’s cost basis per tax year.
