The income tax declaration is a tax process that generates many doubts among Colombians, despite the years that it has been implemented throughout the country, as a mechanism of the National Tax and Customs Directorate (Dian), to know which people must pay taxes, to contribute with their earnings and income for economic growth and the development of state programs.
Withholding tax, income, deductible amounts or deductibility; these are some of the terms that generate confusion among citizens, who in many cases prefer to turn to accountants to carry out this requirement. It should be noted that the changes of the last tax reform, promoted by Former Minister José Antonio Ocampo, added a bit of complexity to this process.
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Another element that generates doubts has to do with the income that is reported and that which is not, since there are exemptions and each taxpayer is a case that must be studied separately; always keeping in mind that ignorance of the law is no excuse for failing to comply or filing incorrectly in the income tax return and that these errors can become very expensive sanctions if they are not corrected in time.
What is declared?
According to BBVA Research and the consulting firm Russell Bedford Colombia, When filing your income tax return, the DIAN includes the requirements and conditions in a guide that is updated annually with new developments and can be found on the website of this tax authority.
Income tax return.
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In addition, this body establishes the requirements that must be met to enter the group of declarants, and by fulfilling only one of them, one is obliged to present the document. For salaried employees, natural persons and unsettled estates, the amounts are calculated based on the Tax Value Unit (UVT). With this, the following amounts are established:
– People with a gross assets greater than $190,854,000 COP as of December 31, 2023.
– With gross income equal to or greater than to $59,377,000 COP during 2023.
– Higher credit card payments to $59,377,000 COP during 2023.
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– Higher purchases and consumption to $59,377,000 COP during 2023.
– People who made bank deposits, deposits or financial investments with a total accumulated value exceeding $59,377,000 COP during 2023.
– Persons responsible for Sales Tax – VAT at the end of the 2023 tax year.
“Until October 24, Colombians will have to submit their declaration of income. This is a tax that consists of paying a percentage of the income that a legal or natural person has had in a year. In 2024, the income obtained a year earlier, that is, 2023, will be declared,” said these experts.
Undeclared income
Decree 1625 of 2016, which modifies the Single Regulatory Decree of the Tax Sector, establishes which contributions should not be declared in the income tax. Among these, contributions to a savings account for the promotion of construction (AFC) stand out, provided that they do not exceed 3,800 UVT, equivalent to $161,165,600. This tax incentive seeks to encourage investment in housing, allowing taxpayers to save effectively.
Income tax return
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In addition, severance pay and interest on it are also exempt. declaration, as long as the worker’s salary in the last six months does not exceed 350 UVT, or $14,844,200. This protects workers with lower incomes, ensuring that severance pay, which is an important labor right, is not affected by additional taxes, and its savings and security function is maintained.
Compensation for work-related accidents, illness, maternity benefits, and burial expenses of the worker also do not have to be declared. Likewise, pensions for retirement, disability, old age, survivors, and occupational risks are exempt from taxes until 1997. Beginning in 1998, only those pensions exceeding 1,000 UVT ($42,412,000) in monthly payment will be taxed, thus protecting pensioners with lower incomes.
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Other benefits, such as insurance or death compensation and social benefits for members of the Military and Police Forces, both active and retired, are also exempt from taxes. Likewise, representation expenses for magistrates, prosecutors, judicial attorneys, judges, rectors and professors of public universities have specific exemptions, with percentages of 25% to 50% of the salary, depending on the position, to alleviate the tax burden on these public servants.
