Cuadernos de Economía
versión impresa ISSN 0121-4772
This document suggests the possible existence of an implicit tax on investment generated when the present value of depreciation deductions doesnt compensate the cost of capital. The last tax reform tried to implement a full expensing in order to eliminate this implicit tax. The proposal wasnt accepted and instead it introduced changes in the special partial expensing deduction. We conclude that the current 40% deduction is not a tax benefit for the Colombian economy overall, but that it is essentially a compensation for the existence of the implicit tax on investment.tr
Palabras llave : investment; taxation; user cost of capital.