We share our Tax Bulletin No. 11 of May 2019 with the latest decisions and opinions released by the Administrative Tribunal of Cundinamarca and the Tax Authority, in connection with national and local taxes, and tax procedure.
The complete Bulletin is found only in Spanish in the below PDF, because of many domestic tax terms we are unable to translate for you. However, please find below the main subjects we will be speaking of in the Bulletin. If you are interested to find out more information, do not hesitate to contact.
1. Legislation
1.1. The Colombian Congress issued Law 1955 containing the Development National Plan 2018 - 2022 (“Plan Nacional de Desarrollo - Pacto por Colombia, Pacto por la Equidad”)
The Development National Plan included several modifications to the Colombian Tax regime. The new law includes modifications to the tax over dividends, turn over tax, VAT and benefits to energy generation with unconventional sources.
1.2. The Ministry of the Finance and Public Credit issued Decree 705 of 2019 regulating paragraph 1 of section 158-1 and section 256 of the Colombian Tax Code
On April 24th of 2019, Ministry of the Finance and Public Credit issued decree 705 of 2019, under which it regulates paragraph 1 of section 158-1 and section 256 of the Colombian Tax Code regarding the small and medium sized enterprises. The aforementioned sections contains the tax deduction and tax discount that is allowed in Colombia due to donation or investments in investigation, technological development and innovation.
1.3. The Ministry of the Finance and Public Credit issued Decree 874 of 2019 related with the normalization tax
The decree 874 of 2019, issued on May 20th, 2019, contains the regulation regarding the “normalization tax”. Please bear in mind that the so called “normalization tax” has been created to allow taxpayers who hold assets that they have not reported to the Tax Authority or who have reported nonexistent liabilities to correct this situation.
1.4. The Ministry of the Finance and Public Credit issued Decree 872 of 2019 which regulates section 100, 101 and 102 of law 1943 of 2018
On May 20th of 2019, Ministry of the Finance and Public Credit issued decree 872 of 2019, under which it regulates section 100, 101 and 102 of law 1943 of 2018.
Under law 1943 of 2018, Colombian taxpayers are entitled to terminate their litigations carried out before the Colombian Tax Authority as long as the taxpayers fulfill some requirements. With decree 872 of 2019, the Colombian Government has provided the requirements that have to be met in order to access to these benefits.
1.5. The Colombian Tax Authority issued Resolution 30 of 2019 containing the requirements and regulations that has to be applied by taxpayer who want to issue electronic invoice with validation in advance
On April 29th of 2019, the Tax Authority issued Resolution 30, under which it prescribed the requirements that have to be complied by the Colombian taxpayer that are going to issue electronic invoice with validation in advance. The mentioned Resolution contains several definitions, technic and technical requirements that the Colombian government demand to taxpayers that are obliged to issue this kind of invoices.
2. Rulings
2.1. The payments due to satellite access services outside the Colombian geostationary orbit provided by foreign companies or individual without residence or domicile in Colombia are subject to VAT
On February the 4th of 2019, the Colombian Tax Authority issued ruling 2562 indicating that the payments due to satellite access services outside the Colombian geostationary orbit provided by foreign companies or individual without residence or domicile in Colombia are subject to VAT.
2.2. The Colombian Tax Authority issues ruling 4608 of 2019 indicating the tax treatment of dividends distributed by a Colombian Company that is taxed under the Simple taxation system
On February the 25th of 2019, the Colombian Tax Authority issued ruling 4608 indicating that the companies that are taxed under the Simple taxation system must comply with section 48 and 49 of the Colombian Tax Code at the moment of the distribution of dividends. The ruling also indicates that the tax rates provided in section 242 and 245 of the Colombian Tax Code are applicable when the companies subject to the Simple taxation system distributes dividends.
3. Judgements
Colombian Constitutional Court indicates that section 364 of law 1819 is unenforceable
The Colombian Constitutional Court issued judgment C-084 of 2019 indicating that section 364 of law 1819, providing the tax over arbitration awards of economical content, is unenforceable.
According to the judgment, Colombian Congress included this article after the first debate of the tax bill took place. Consequently there was a breach on the legislative procedure. Due to the aforementioned, section 364 of law 1819 is unenforceable.
4. Projects of Decrees and Resolutions
4.1. The Ministry of Finance and Public Credit published a draft of the decree that shall regulate section 235-2 of the Colombian Tax Code
Law 1943 of 2018 contains benefits that are meant to improve competitiveness in the productive sector and new investments (“the orange economy”). Such benefits are included in section 235-2 of the Colombian Tax Code and, the Ministry of the Finance and Public Credit has published o draft of Decree that regulates the conditions that have to be met in order to access to such benefits.
4.2. The Ministry of Finance and Public Credit published a draft of decree by means of which it regulates section 90-3 of the Colombian Tax Code related to indirect sales of assets owned in Colombia
In law 1943 of 2018, the Colombian Congress created section 90-3 of the Colombian Tax Code containing provisions regarding indirect sales of assets owned in Colombia. Transactions that are deemed to be an indirect sale of assets owned in Colombia are subject to taxation in Colombia. In this vein, the Ministry of the Finance and Public Credit published a draft of decree that contains the regulation of section 90-3 of the Colombian Tax Code.
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