We share our Tax Bulletin No. 2 from the 15th to the 31st of July 2018 with the latest decisions and opinions released by the Council of State 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 us.
1. Administration Acts
1.1 In Executive Decree 946 of 2018, the Government established the conditions by which the Taxpayers, who perform Oil & Gas activities offshore, can discount or request the balance in favor presented in the VAT returns, arising from the acquisition of goods and services in respect the exploration and production stage.
1.2 Regarding the oil exports payments, the Government increased the withholding tax rate, from 1,5% to 3%.
1.3 In Executive Decree 1096/2018, the Government regulated the conditions by which the seller of new real state, with value higher of 26.800 UVT, can discount the VAT paid over the direct and indirect costs of the property construction.
1.4 In Administrative Act 32/2018, Tax Authority (DIAN) determined Form No. 210 whereby individuals shall file the income tax return.
2. Judicial Decisions
2.1 The Council of State in Decision of May 10th 2018 (File 20.677), annulled Section 3 of Article 7th of Decree 325/1995, to the extent it limited the possibility to include the fiscal cost of the real state determined in the property tax return, for income tax purposes in respect the sale of real state.
2.2 In Decision of May 10th2018 (File No. 20.949), the Council of State said that employers cannot deduct of their gross income the payments regarding the legal contributions to social security system of individuals without a labor relationship.
2.3 The Council of State, in Decision of May 3rd 2018 (File. 22.243), stated that the administrative act, arising from not solving a Reconsideration Appeal by Tax Authority within the term of 1 year, does not require a public deed but it must be declared by Administration itself.
2.4 In Decision of April 5th 2018 (File 21.873), The Council of State asserted that the Tax Authority would be subject to pay Litigation Expenses in the events the final decision was favourable to the taxpayer. Nonetheless, the claimer must demonstrate the amount of these expenses.
3. Tax Rulings
3.1 In Tax Ruling No. 285, of May 6th, 2018, DIAN explained the tax effects derived from rendering services through online platforms.
3.2 In Tax Ruling No. 279, of March 6th, 2018, DIAN pointed out that fix assets that were being depreciated before December 31st, 2018, can be depreciated by the same method applicable before the entry into force of Law 1819/2016.