Occasional income: Taxes in Colombia

Occasional gain is considered to be the income or profit of a person or company from a sale that is not part of the ordinary course of business or from the occurrence of an exceptional economic event.

These are considered a complementary tax to income tax.

Depending on the source, the occasional gain is classified as follows:

Gain on sale of fixed assets owned for two years or more:

The positive value resulting from the difference between the value for which the asset is sold, whether movable or immovable, and its tax cost, is considered as occasional gain.

Profit in liquidation of companies with permanence of two years or more:

The difference between the value contributed to the company at the time of its formation and the value received at the time of liquidation is considered as occasional gain.

Inheritances, legacies, donations or any other legal act celebrated inter vivos free of charge, and what was received as marital portion:

The value of the assets and rights to be taken into account to determine the taxable base of the tax shall be the value of the assets and rights as of December 31 of the year immediately preceding the date of liquidation of the succession or perfection of the act of donation or of the inter vivos legal act celebrated free of charge.

Life insurance indemnities:

Compensations exceeding 3,250 UVT will be taxed with this tax.

Lottery, raffles, bets, prizes, games and similar:

They may be received in cash or in kind. When they are in cash, the amount is determined by the amount actually received; when they are in kind, by the commercial value of the good at the time of receipt.

The occasional gains exempt from occasional gains tax are established in article 307 of the tax statute and are as follows:

1. The equivalent to the first 13,000 UVT of the value of a dwelling property owned by the deceased.
2. The equivalent to the first 6,500 UVT of real estate assets other than the dwelling owned by the taxpayer.
3. The equivalent to the first 3,250 UVT of the value of the allocations received by the surviving spouse and each of the heirs or legatees, as the case may be, as a marital portion, inheritance or legacy.
4. 20% of the value of the goods and rights received by persons other than the legitimate and/or surviving spouse by way of inheritances and legacies and 20% of the goods and rights received by way of donations and other inter vivos legal acts celebrated free of charge, without exceeding the equivalent of 1,625 UVT.
5. The books, clothes and utensils for personal use and furnishings of the home of the causer.

Finally, the occasional gain tax rate varies depending on whether it is applicable to domestic and foreign companies and entities, resident individuals, foreign individuals without residence and for occasional gains from lotteries, raffles, bets and the like.