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6.6.1. Exempt Income and Receipts not Considered Income for Tax Purposes

Colombian legislation differentiates between receipts that are not considered income for tax purposes ( ingresos no constitutivos de renta) and exempt income ( rentasexentas).

Receipts not considered income for tax purposes include:

  • distribution of profits in the form of stock or company interest, as a result of the capitalization of  (i) reserves of non-taxable or exempt profits, or (ii) the equity revaluation account ( cuenta de revalorización del patrimonio);
  • income from the sale of shares listed on the Colombian stock exchange, inasmuch as the sale does not exceed 10% of the shares of the company whose shares are sold, during the same fiscal year, by the same beneficial owner;
  • profits from corporate democratization processes (  opening-up of capital through offers of subscription to the public, procesos de democratización de sociedadesrealizadosmedianteofertapública);
  • income from the disposal of shares, provided it can qualify as retained earnings that would not be taxable dividends in the hands of the shareholders if distributed;
  • in kind or in cash insurance compensations received as a consequence of an insurance covering the consequential damage
  • profits from the negotiation of derivative instruments representing securities, as long as they are represented exclusively in shares listed on the Colombian stock exchange or in funds that reflect the results of such shares; and
  • donations received for research and technological development projects.

Income exempt from tax includes:

  • income from the sale of energy generated by wind power, biomass or agricultural waste, for a 30-year term;
  • income from hotel services rendered in new or renewed hotels, for a 30-year term;
  • Income from ecotourism services;
  • interest, commissions and other revenues received from loans granted by foreign public institutions; and
  • life insurance compensations.