According to Andrés Felipe Izquierdo, manager of Integral Pension Solutions (ISP), “the most significant change proposed by the tax reform in pension matters is the lien on pensions in excess of $10 million, which I consider viable and necessary”.
The analyst says that the tax is in line with the policies of the most developed OECD countries that already have un tribute scheme on the pension allowance.
(Read: Exporters ask to review conditions of tax free zones).
He considers that the vast majority of pensions in Colombia have a subsidy by the Nation, so it is the right step towards tax justice.
He says that there are wrong interpretations to pensions will be taxed from $5 million and mentions that the tax would apply from 2023Consequently, the example is made with UVT (Tax Value Unit) reference of ($41,805). The exempt income is limited to 1,790 UVT per year ($74,830,950), additionally, the 1,090 UVT ($45,567,450) must be taken into account with a 0% marginal rate provided for in the tax statute.
(Also: Surcharge: the greatest tax impact on financial issues).
“Thus, by adding the above, the exempt base equivalent to 2,880 UVT (120,398,400) per year, which implies that in 2023 pensions whose monthly value is equal to or greater than $10,033,200 would be taxed.”
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