Wealth tax

The 'wealth tax', enshrined in the tax reform bill being debated in Congress, is none other than the same 'wealth tax' that was incorporated into national legislation (at the time, as a 'transitory tax') by the following regulations: Decree 1838/2002, Law 863/003, Law 1111/2006, Law 1370/2009 (as amended by Law 1430/2010) and Decree 4825/2010. The change of name is simply a diversionary sophism, by means of which the Government intends to extend its application (as a 'new' tax) to those taxpayers who 'stabilized' the wealth tax by signing legal stability agreements within the framework of Law 963/2005 or, prior to that, were benefited by the special tax stability regime created by Law 223 of 1995 based on the rulings issued by the contentious-administrative jurisdiction.

This strategy of the Government is not new; by means of Concept 098797 of December 28, 2010, the Dian established that the taxpayers that stabilized the wealth tax under any of the two previously established modalities had to pay the new wealth tax, created by Law 1370/2009, since, according to the administration, it was a new tax and there was "the legal impossibility of stabilizing rules that are nonexistent at the time of the subscription of the contract". Many businessmen sued the nullity of the mentioned Concept, and the Andi, on behalf of the industrialists of the country, supported such lawsuit. The same is pending for decision in the Administrative Court of Cundinamarca.

With this position, the Dian began to audit companies that, having stabilized the equity tax (and paid considerable premiums to do so) had refused -legitimately- to pay this nascent 'new equity tax'. This was the case of Sofasa, to whom, after a long litigation, the Administrative Court of Cundinamarca, in a judgment of July 17, 2013, ruled that: "(...) when comparing the articles that determine the establishment of the tax and the generating fact in the original law, it is found that they do not change or differ from the elements developed in the subsequent laws, but that these have made an extension of its determination in time, without introducing a substantial modification to the tax. This means that it is not a new tax, but it is substantially the same wealth tax with all its elements, but it has been extended over time". The Court also indicated, with respect to the binding nature of Concept 98797/2010, that this is a position of the Dian that binds only its officials, but that through these pronouncements "it cannot legislate, nor make them binding as a material force of law to taxpayers".

According to the conclusion of the Court, the companies that stabilized the wealth tax would not be obliged to declare and pay the new wealth tax, the cornerstone of the current tax reform, because clearly, and although it has been renamed, this is a tax that levies the liquid wealth and whose essential elements are practically the same as those of the previous wealth taxes.