New position of the SHD on the ICA applicable to the leasing of own properties

The District Finance Secretariat of Bogotá D.C., in response to files 2025ER025507, 2025ER026705, and 2025ER026897 dated January 31, 2025, indicated that the leasing of real estate owned is subject to Industry and Commerce Tax (ICA), as it is considered a service provision activity.

In a recent ruling, the District Finance Secretariat (hereinafter SHD) concluded that the leasing of owned real estate is subject to ICA tax. This constitutes a change in the line of taxation that had been maintained by the Territorial Administration, since prior to this ruling, the District claimed that the leasing of owned real estate was subject to ICA tax as a commercial activity.

In fact, in response to a query regarding the tax treatment of ICA in the leasing of own real estate by a non-profit entity, the SHD stated that this service is subject to ICA. To support its position, the Secretariat cited Concept 1219 of 2013 of the Legal Tax Subdirectorate, which states that “in the activity of leasing own properties, the lessor performs a human service.”

As can be seen, the Secretariat changes the type of taxable activity, leaving behind the argument related to taxing the leasing of own properties as a commercial activity and deciding to tax the leasing service. This new position is supported by the fact that the Council of State has repeatedly upheld the declarations of taxpayers in Bogotá because it understood that the leasing of own real estate is not a commercial act, since paragraph 2 of Article 20 of the Commercial Code only refers to the following as commercial acts: "2) The acquisition for consideration of movable property for the purpose of leasing it; the leasing of such property; the leasing of all types of property for the purpose of subleasing it, and the subleasing of such property;". Likewise, the SHD indicates that to date, only ruling 25000-23-37-000-2014-00332-01 has ruled on the ICA in relation to the leasing of own property, so this ruling is not a line of jurisprudence and only has inter-party effects.

Effects for taxpayers

Under this new interpretation, the leasing of own real estate is considered an activity of providing services subject to ICA, regardless of the type of taxpayer. Therefore, both individuals and legal entities—including non-profit entities (ESAL)—that directly lease real estate they own in the Capital District would be subject to the tax, under the terms of this new doctrinal line adopted by the SHD.

Our Opinion

The leasing of one's own property constitutes a civil act and not a commercial act. Consequently, Article 20 of the Commercial Code, which requires the existence of a business activity involving intermediation for the configuration of a commercial act, is not applicable.

Nor can it be classified as a service activity, since these imply the existence of an obligation to perform. In the lease agreement, the lessor does not assume any obligations to perform, but only to give the lessee the use of the property.

In conclusion, the leasing of one's own property does not constitute an activity subject to Industry and Commerce Tax (ICA), insofar as it does not constitute a commercial act or a service under the established legal and tax terms.

This is an issue that has been subject to multiple interpretations over time, so its analysis requires special care in each particular case. The determination of whether or not an activity is subject to ICA should not be based exclusively on the interpretation of the District Finance Secretariat, but should also take into account the jurisprudential precedents established by the Council of State on this matter. We remain attentive to review the specific case and provide guidance in accordance with the applicable regulatory and jurisprudential framework.