On 16 March 2017, the National Tax Authority (Dirección de Impuestos y Aduanas Nacionales , DIAN) issued Ruling 5797 of 2017 pronouncing on the validity of the fairness tax (Impuesto sobre la renta para la equidad, CREE) and the CREE surcharge. Details of Ruling 5797 of 2017 are summarized below.
- Under Law 1819 of 2016 (the tax reform), as from 1 January 2017, the CREE tax and the CREE surcharge are no longer applicable
- To provide a correct interpretation on the changes introduced by Law 1819 of 2016, DIAN issued the following guidelines on the validity of the CREE tax and CREE surcharge:
- As the tax reform unifies the income tax and CREE tax as from tax year 2017, the CREE tax was still applicable for tax year 2016.
- The tax reform introduced a temporary regime providing for the tax treatment of tax amounts from previous CREE tax periods that are pending to be recovered or deducted, such as tax losses and tax credits.
- Therefore, the temporary regime expressly recognized the validity of the CREE tax for tax year 2016 by providing that, in order to assess the income tax as from tax year 2017, the pending tax amounts associated with the CREE tax for tax year 2016 must be taken into account.
- With respect to the CREE surcharge, as it has been eliminated as from tax year 2017, advance payments corresponding to such amount must not be settled or paid by taxpayers when filing the CREE tax return for tax year 2016.
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