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One of the most important moments in Colombia’s economic agenda is the start of the tax calendar and, with it, Dian begins to impose requirements on taxpayers who must comply with their tax obligations. These dates include the deadlines for filing and Payment of taxes such as income tax and VAT should not be neglected either.
It is important for investors to make informed decisions about when and how to transfer funds to maximize tax benefits and to eliminate any doubts about the obligations that instruments such as CDT must comply with, especially in all aspects related to withholding taxes, which, despite what many people believe, are not taxes at their source.
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What is a reservation?
To better understand this issue, Portafolio consulted experts from MejorCDT, who explained that withholding at source is not an additional tax, but a mechanism for the government to gradually collect taxes.
Central Daylight Time.
“The system allows taxpayers to prepay taxes Income will be deducted from the final amount paid when the annual income declaration is made. Early withholding can reduce the final tax payable and can even result in a Dian refund. ” said David Susa, Chief Technology Officer of MejorCDT.
On whether withholding tax at source is indeed applicable during the transaction process, they pointed out that the process takes place when goods or services are exchanged between the buyer and the seller as this is the way to ensure tax liability, with the tax being collected at the time of the transaction.
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“In the case of CDT, withholding tax at source is only applicable to the return or interest generated by the CDT and not to the initial invested capital.” It is important to note that the initial capital remains the same and “It will continue to generate profits even after paying withholding taxes,” the expert added.
On the other hand, David Sousa stressed that withholding tax is a prepayment of income tax, so it provides a deductible advantage for those who have to declare their income. That is, investors can subtract this value from their tax returns, which helps to reduce the tax burden on income generated by investments such as CDT.
Central Daylight Time.
“Contrary to what some people believe, withholding tax at source does not apply Time Deposit Certificate (CDT). This mechanism is subject to various taxes in different situations in daily life, such as VAT, ICA and income. Therefore, almost all forms of investment returns are subject to some type of withholding tax. “clarified the CTO of MejorCDT.
No investment involved
Finally, it is important to point out that withholding at source does not eliminate the profitability of the investment, for example, in the case of CDT, withholding is calculated on the value of the profitability obtained when the certificate expires and, currently, this percentage is 4%.
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“Here’s an example of how this works. If you invest $10 million and receive a return of $400,000, the withholding tax will be $16,000, applied only to the return, not the total amount invested, so There is no need to worry about your funds being compromised when using these systems. ” David Susa concludes.
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