We share our Tax Bulletin No. 21 from March 2020, with the latest decisions and opinions released by the Ministry of Finance and Public Credit, the Council of State and the Tax Authority, in connection with national and local taxes, and tax procedure.
Also, we share some of the latest decisions taken from the National Government, considering the health emergency declared through Decree 417 of 2020.
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.
Normativity issued by the National Government and the Colombian Tax Authority under the health emergency due to the effects of COVID-19
Resolution 000030 of March 29th, 2020
According with the provisions set forth in Resolution 30 of 2020, the due dates of administrative acts, including disciplinary processes, will be suspended until the health emergency is finished. The Colombian Tax Authority (“CTA”) has not pointed out a specific date. In this sense, the firmness terms will run again, only when this situation is finished.
The suspension of terms in tax matters does not include the following aspects:
- The fulfillment of the tax obligations regarding the filing and payment of tax returns.
- The returns and/or compensations processes requested through the Electronic Computing System (“SIE” per its acronym in Spanish) or electronic mailboxes authorized by the CTA.
- Payments facilities requested through authorized electronic mailboxes.
- Management of judicial deposit titles.
- Uprising of seizure requests made through authorized electronic mailboxes.
In addition, taxpayers must be aware about the deadlines to file and pay their tax returns, in order to avoid penalties.
Resolution 000027 of March 25, 2020
The Resolution 000027 of 2020, issued by the Colombian Tax Authority, modified the deadlines to present the exogenous information that individuals and companies must submit periodically to the CTA, as follows:
Deadlines in order to submit the annual information
The new deadlines to present the exogenous information have been set between June 1st, 2020 and July 1st, 2020 for individuals and companies. The specific dates will depend on the last digit two digits of the Tax Identification Number (“NIT” for its acronyms in Spanish).
For major taxpayers, the deadlines have been set between May 15, 2020 and May 29, 2020, depending on the last digit of the NIT.
Decree 463 of March 22, 2020
By means of Decree 463 of 2020, the Colombian Government partially modified the customs tariff for the importation of medicines, medical devices, chemical reagents and selfcare articles. In relation with the above, the decree sets forth a 0% rate for some goods such as chlorine, sodium and iron.
Decree 438 of March 19, 2020
Considering the provisions set forth in the Decree 438 of 2020, issued by the Ministry of Finance and Public Credit, some medical goods are temporary exempt from Value Added Tax (“VAT”). Nevertheless, it is important to highlight that, taxpayers won´t be allowed to request the reimbursement or compensation of the VAT paid in the acquisition of such goods.
Decree 436 of March 19, 2020
Through Decree 436 of 2020, the Ministry of Finance and Public Credit adopted some customs measures regarding the deadlines for the fulfillment of obligations and duties.
Decree 435 of March 19, 2020
By means of Decree 435 of 2020, the National Government modified the deadlines to file the income tax return for major taxpayers. Those deadlines were established between April 21, 2020 and May 5, 2020.
On the other hand, the deadlines to file the income tax return of Companies have been set between April 21, 2020 and May 19, 2020.
Furthermore, pursuant to the provisions set forth in Decree 435 of 2020, the following taxpayers will be enabled to pay the VAT return from periods March – April of 2020 and January – April 2020, until June 30, 2020:
|Code CIIU (Economic Activity Code)||Description|
|5611||Distribution of prepared meals|
|5613||Distribution of prepared meals in cafeterias|
|5619||Other types of distributions of prepared meals|
|5630||Distribution of alcoholic beverages|
|7911||Travel agency activities|
|7912||Touristic operator activities|
Decree 401 of March, 13 of 2020
Through Decree 401 of 2020, the National Government modified the deadlines for the fulfillment of the advance payment of Simple Tax, obligation that must be satisfied by the that the taxpayers of the Simple Tax Regime every two months. In this sense, the due dates to file and pay the advance that corresponds to taxable year 2020, are the following:
|Last digit of the NIT||January – February||March – April||May – June||July – August||September – October||November – December|
|0||May 5 of 2020||June 9 of 2020||July 7 of 2020||September 8 of 2020||November 10 of 2020||January 13 of 2021|
|9||May 6 of 2020||June 10 of 2020||July 8 of 2020||September 9 of 2020||November 11 of 2020||January 14 of 2021|
|8||May 7 of 2020||June 11 of 2020||July 9 of 2020||September 10 of 2020||November 12 of 2020||January 15 of 2021|
|7||May 8 of 2020||June 12 of 2020||July 10 of 2020||September 11 of 2020||November 13 of 2020||January 18 of 2021|
|6||May 11 of 2020||June 16 of 2020||July 13 of 2020||September 14 of 2020||November 17 of 2020||January 19 of 2021|
|5||May 12 of 2020||June 17 of 2020||July 14 of 2020||September 15 of 2020||November 18 of 2020||January 20 of 2021|
|4||May 13 of 2020||June 18 of 2020||July 15 of 2020||September 16 of 2020||November 19 of 2020||January 21 of 2021|
|3||May 14 of 2020||June 19 of 2020||July 16 of 2020||September 17 of 2020||November 20 of 2020||January 22 of 2021|
|2||May 15 of 2020||June 23 of 2020||July 17 of 2020||September 18 of 2020||November 23 of 2020||January 25 of 2021|
|1||May 18 of 2020||June 24 of 2020||July 21 of 2020||September 21 of 2020||November 24 of 2020||January 26 of 2021|
In addition, it is important to point out that, regarding the Normalization Tax introduced through Law 2010 of 2019, the due dates for the filling and payment of the Normalization Tax have not been modified by the recent decrees issued by the Colombian Government during the health emergency. In this sense, the deadline to fulfill the formal duties of the Normalization Tax, is September 25, 2020.
Normativity issued by the National Government regarding tax issues in March 2020
In addition to the regulations issued as a result of the health emergency in our country, the National Government has also issued other tax regulations during this period, which we allow ourselves to highlight below:
Decree 478 March 25, 2020
In accordance with the Decree 478 of March 25, 2020, the National Government regulated the exclusion of VAT from personal desktop or portable computers, which value does not exceed the sum of 50 Tax value Units (COP $ 1,780,350) (approx. USD $446), contemplated in section 5 of article 424 of the Statute Tax. In order to apply the aforementioned exclusion, the decree indicates some definitions that must be considered.
On the other hand, the Decree clarifies that items such as: printers, scanners, external modem, video camera, external storage units and in general, other accessories, as well as parts and pieces, are not excluded from sales tax.
Decree 358 of March 5, 2020
By Decree 358 of March 5, 2020, some articles of the Decree 1625 of 2016 were modified. Those modifications include issues related to withholding tax on labor income. Below we pointed out some of the most important modifications introduced by the Decree:
- The obligatory contributions to the General System of Pensions won’t be treated as income for income tax purposes.
- The 25% of the income from fees received by individuals who have hired less than 2 workers related to the activity, for a term of less than 90 days (continuous or discontinuous), will be considered as exempt income.
Foreign exchange penalties for the non-filing of movements of the compensation accounts
By means of Tax Ruling No. 900586 of March 4, 2020, the CTA clarified that account holders of compensation accounts will be subject to a fine equivalent to 200 Tax Value Units (approx. USD $1,780), in the event they do not inform the movement of the compensation account for a continuous period of six (6) months.
In this sense, the holder of the compensation account will be bound to settle and pay the corresponding sanction through Form No. 690 "Official Receipt of Payment for Customs Taxes and Foreign Exchange Penalties". The foregoing does not exempt the obligation to report the movements of the compensation account for the period in which this obligation was not fulfilled.
Responsibility for the payment of customs surcharges
The Colombian Tax Authority indicated through Tax Ruling No. 900577 of March 4, 2020, that the surcharges perceived on imports or, due to the importation of merchandise, are safeguards and anti-dumping rights.
However, the customs legislation does not contemplate any fee or surcharge for the services provided by the Customs Authority that are required for the importation of goods in Colombia. Consequently, the individual who is responsible for the payment of surcharges and fees will be the one established by law.
Application of the exclusion of VAT with respect to treatments carried out on pets
Through Tax Ruling No. 4488 of March 3, 2020, the CTA clarified that the exclusion of VAT indicated in section 1 of article 476 of the Colombian Tax Code, referring to "medical, dental, hospital, clinical and, laboratory” goods, is applicable exclusively for human health. Consequently, it is not possible to apply the such exclusion in the treatments carried out on pets.
Case Law of the Council of State
Application of the principle of favorability in penalties matters
In Case Law of February 19, 2020 (File 23565), the Council of State indicated that, the application of the principle of favorability related to penalties is appropriated in respect to the inaccuracy penalty.
Independent procedure for the imposition of unlawful refund penalty
In Case Law of February 27, 2020, the Council of State indicated that, for the imposition of unlawful refund penalty, the law contemplates an autonomous and independent procedure from the one applicable to the tax assessment process.
Projects of Decrees
Tax Credit for investments in research, technological development and innovation projects or for linking personnel with a doctorate degree
The Ministry of Finance and Public Credit released the draft of Decree through which article 256 - 1 of the CTC, added by Law 1955 of 2019, would be regulated.
The draft of Decree develops the procedure for the application of the tax credit and the processing of applications for titles for the refund of taxes (“TIDIS” per its acronym in Spanish), for investments in research, technological development and innovation projects or the linking of personnel with a doctorate degree in the micro, small and medium-sized companies that comply with the requirements set forth in Law 1955 of 2019.
Tax incentive for the development of Colombian agriculture
On March 16, 2020, the Ministry of Finance and Public Credit published for comments the draft of Decree which aims to regulate section 2 of article 235-2 of the CTC, modified by Law 1955 of 2019, related to the treatment of exempt income that is applicable on the investments made to increase the productivity of the Colombian countryside.
Considering the provisions set forth in the draft of Decree, investments that will have the quality of exempt income, will be those qualified by the Ministry of Agriculture and Rural Development.