TAX REFORM: HOW WOULD THE BILL AFFECT THE POCKETS OF INDIVIDUALS AND CORPORATIONS?

The new tax reform bill, tax experts, public accountants and economists have taken on the task of analyzing and giving their opinion on the subject.

Which individuals will feel the biggest blow according to the tax reform bill?

The tax reform project seeks to equalize the tax treatment of individuals in Colombia, as well as to eliminate the benefits that favor Colombians with higher incomes.

It is explained that among the main points of the tax reform bill is the increase in income tax for those individuals earning more than 10 million pesos.

And how would legal entities be affected?

With the tax reform it is intended to obtain 5.5 trillion pesos from them, mainly from the elimination of exemptions, preferential treatments and the deduction of oil royalties from income tax.

It should be recalled that the tax reform project will seek to eliminate the tax benefits applied to some organizations, economic sectors or territories of the country.

There are changes in income taxes for legal entities, such as:

– Income rate for legal entities.

– Income tax rate for free trade zones.

– Dividends.

– Limitation, benefits and incentives.

– Deductions, elimination of special treatments and derogations.

Currently, the income rate for these organizations is 9% and with the tax reform it would increase to 35%.

It should be recalled that the income rate for national corporations (35%), industrial and commercial companies (9%) and financial institutions (38%) will remain as it is currently.

Another novelty of the tax reform bill is the adoption of a cap of 3% of the net income for the total amount of the sum of exempt income, deductions and income not constituting income.

Source: Actualícese.

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