The biggest concern for entrepreneurs regarding the tax reform discussion taking place in Colombia’s Congress has been settled.
Initially, the tax reform calculated the wealth tax based on the intrinsic value of a company’s shares. Entrepreneurs were concerned about this formula, as startup valuations are most often calculated on future projections. Recently, Colombia’s Minister of Finance, José Antonio Ocampo, expressed his support for amending the 22nd article of the tax reform to address the concerns of entrepreneurs.
Now, a substitute position was presented in a document to modify the wealth tax calculation. The taxable base for private companies that are not listed on a stock exchange will be changed from the intrinsic value of the shares to “the acquisition cost of the shares, quotas or parts of interest owned by the taxpayer of the wealth tax.”
Luis Carlos Reyes, Director of the DIAN (The National Directorate of Taxes and Customs), explained that now, “the taxable base of the wealth tax will be the fiscal cost, not the intrinsic value.”
The tax reform was approved in the first debate and passed to the second debate in the Congress of the Republic.
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