Learn about the main points of the new Unified General Concept on foreign exchange matters

The Legal Management Directorate of the Colombian Tax Authority ("DIAN" per its acronym is Spanish) issued a Unified General Concept to compile the doctrine that had been published in recent years on foreign exchange matters. It is important to bear in mind that this Unified Concept will be hierarchically superior to the concepts previously issued on this matter and explicitly revokes them.

In the Concept, the DIAN makes a specially focuses on the administrative exchange process and the penalty regime. In other words, it refers to the regulations and criteria applicable in the event of a conflict between the Tax Administration or other government entities and the citizen, with respect to exchange obligations.

In this regard, it is recalled that the administrative foreign exchange process is a special process and, therefore, it must be applied in all the conflicts that arise in foreign exchange matters and for the determination of the infractions of this regime.

In addition, certain procedural elements are explained, such as the statute of limitations for the exchange action or claim. The governmental authority has 5 years from the occurrence of the facts constituting the infringement to notify the indictment and 2 years from the expiration of the term of response to the indictment for the notification of the sanction decision.

Besides the procedural aspects, the DIAN explains the interpretation it gives to certain situations that must be reported to the Central Bank through the Exchange Returns: such as the reimbursement of foreign currency and errors or inconsistencies in the Returns, among others.

Likewise, within the different operations that must be channeled through the foreign exchange market, this Concept makes special reference to the import and export operations. For example, the DIAN establishes that temporary imports of goods under lease do not need to be approved by the Banco de la República, however, the leasing contract must accompany the Exchange Return information form.

Another topic of interest mentioned in the Concept was regarding the exchange treatment to be given to the fees received by Colombian residents for services rendered abroad if the foreign currency is deposited in an account abroad. In this regard, it was recalled that External Resolution No. 1 of 2018 establishes that Colombian residents may freely constitute deposits in foreign accounts with foreign currency acquired in the foreign exchange market or from other residents without the obligation to channel the deposited resources.

Finally, we highlight what was said in relation to the foreign exchange obligations resulting from the sale and purchase of goods in free warehouses. The warehouses are those authorized by the Colombian Tax Authority for the sale of goods to travelers entering or leaving Colombia (for example, the duty-free zone of international airports). From the customs and tax point of view, foreign merchandise is exempt from customs duties and excise tax. Now, from the exchange point of view, it is considered that the merchandise from abroad is temporarily imported into Colombia to be re-exported. In this sense, the payments derived from these operations must be channeled through the exchange market. Regarding the national product that is introduced in the free warehouse, although it is considered that there was an export operation, in the understanding that the suppliers of the merchandise and the holder of the warehouse are Colombian residents, there will not be an exchange obligation of channeling the payments, but they must be made in local Colombian currency.