The intrinsic value for tax purposes in the sale of shares

Law 1819 of 2016 (last Tax Reform), in its Article 56, added a paragraph to Article 90 of the Tax Statute, which indicated the minimum tax value for which assets in general should be disposed of. Such addition established that, when the asset disposed of were shares or quotas of social interest of national companies or entities that are not listed on the stock exchange, unless there is evidence to the contrary, it is presumed that the sale price cannot be less than the intrinsic value increased by 15%.

By means of Official Letter 002043 of December 29, 2017, the Dian answered several questions raised with respect to such addition. The first of them was what should be understood by the expression "unless proven otherwise", to which the Dian indicated that such presumption was of a iuris tantum nature and not iuris et de iure, reason for which, with respect to it, proof to the contrary was admitted, for which any suitable means of evidence may be used. The second question -and the most relevant for the purpose of this column- was whether or not the valuations are taken into account to determine the intrinsic value of the shares in tax matters. Regarding this point, the Dian indicated -referring to its previous Oficio 005826 of 2015- that the valuations to the equity "do not produce tax effects, they only have an accounting and financial effect, (sic) consequently these values are excluded from the tax equity". Likewise, referring specifically to the issue of shares as such, it indicated - quoting its Official Letter 053621 of 2012 - that "the valuation of shares (...) although they generate an increase in equity, they do not originate (sic) income flow and therefore they are not constitutive income of income if the same is not realized.

That is to say, in companies in operation, in which the higher value of the share compared to the nominal value, as a result of the valuation of the company in operation, translates into an intrinsic value higher than the nominal value, the same constitutes in the head of the shareholder a mere expectation (...)".

This opinion of the Dian, according to which the valuations are not taken into account at the time of calculating the intrinsic value of the shares and therefore the taxpayer can take as commercial value of disposal the fiscal intrinsic value (fiscal equity divided by the number of shares in circulation) plus 15%, although it is in line with the position of its previously mentioned Official Notices, is contrary to the jurisprudential line drawn by the Council of State in judgments of March 7, 1997 (Exp. 8102 M.P. Consuelo Sarria O.), April 10, 1997 (Exp. 8207 M.P. Delio Gómez L.), December 9, 2010 (Exp. 17078. M.P. Martha T. Briceño) and March 10, 2016 (Exp. 20922 M.P. Martha T. Briceño) where such body has accepted the intrinsic accounting value (not fiscal) as commercial value in the disposal of shares in unlisted companies. In this sense, the corporation said that "the intrinsic value of any unlisted stock package constitutes a valid option for the determination of its commercial value, even in the terms of article 90 of the Tax Statute".

Although this position may be debatable from the financial point of view (since it would be allowed to take as commercial value an increased tax value), it is not so from the tax perspective, since this reiterates the autonomy and independence of tax rules from accounting rules (Law 1314/2009 and D. 1998/2017).