Value of assets in the declaration of inactive companies.

the value to be declared is the value for which the asset was acquired and which is recorded in the accounting books.

Published on

14/03/2022
Blog

It has been frequently asked the question about the value to be declared in the property or assets of inactive companies. Last Tuesday, in the program Gente Gerente, which is broadcasted by Radio Columbia 98.7 FM every Tuesday at 11 am and which I respectfully invite you to follow, we had the opportunity to talk with Carlos Vargas Durán, General Director of Taxation about this important topic. This, and the exchange rate differential, are undoubtedly the issues that generate the greatest doubts for the fiscal closing of 2021, which as we know, with respect to the Profit Tax, is due to be settled on March 15.

Well, as we have analyzed in ICS, the value to be declared is the value for which the asset was acquired and which appears in the accounting books. It is usual to believe that the municipal appraisal should be used, or that of a bank for example. But we must remember that since this is an informative declaration (it does not cause any tax debt), the value declared does not affect the taxes that may be levied on the eventual sale of the assets. In this respect, as stated by Mr. Carlos Vargas during the radio program: "The assets, being in a company, have a book value and the value in the company's books should be recorded. Here we must remember that this value has no incidence on the value declared for capital gains purposes, sometimes people tend to confuse the bases and this can lead to errors in the declaration of an eventual capital gain (...) remember the separation between the declared value and the value for capital gains purposes".

Thus, the values declared do not affect the taxable base of other taxes. It is also important to remember that these companies are not required to file a tax return on profits, but to report the value of their assets. Therefore, if the return is not filed, the statute of limitations does not run in favor of the taxpayer for only 4 years but for 10 years, but for the purpose of filing such return, not for the determination of the tax on profits, since the return being filed is not self-assessing but informative.

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