We share our Tax Bulletin No. 23 from May 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.
1.Normativity issued by the National Government and the Colombian Tax Authority under the economic emergency due to the effects of COVID-19
The income tax advance payment is reduced to twenty-five percent (25%) and zero percent (0%) for taxpayers who carry out certain economic activities
In accordance with the guidelines provided in Decree 766 of May 29, 2020, the Ministry of Finance and Public Credit sets forth that income tax taxpayers will calculate the advance payment of the taxable year 2020 based on the divisions or groups of the International Standard Industrial Classification of all economic activities (CIIU per its acronym in Spanish) 4.0, adopted by the Tax Administration.
In this sense, for taxpayers who carry out activities that are indicated in the decree, the advance payment will be reduced to twenty-five percent (25%) or, to zero percent (0%) depending on the quality of the taxpayer, its economic activity and CIIU code. On the other hand, the taxpayers who are not mentioned in the decree, must calculate the advance payment in accordance with the provisions set forth in article 807 of the Colombian Tax Code (CTC).
The Colombian Tax Authority provides guidelines, in tax and customs matters, regarding the suspension of terms in the framework of the Economic Emergency
Through Resolution 00055 of May 29, 2020, the Colombian Tax Authority (CTC) determined that from the June 2, 2020, the suspension of terms in administrative or jurisdictional actions before administrative authorities will be lifted.
Ministry of Finance and Public Credit determined the applicable default interest rate in respect to tax and social protection system obligations, as well as the guidelines applicable to payments facilities requests filed before Colombian Tax Authority
Through Decree 688 of May 22, 2020, the Ministry of Finance and Public Credit indicated that for tax obligations and those related to the Social Protection System that are paid until November 30, 2020, and for the payment facilities that are signed between the entry into force of the Legislative Decree and the thirty (30) of November 2020, the default interest rate established in article 635 of the CTC, will be settled daily at a daily interest rate that is equivalent to the current bank interest rate certified by the Financial Superintendence of Colombia.
For the aforementioned obligations of taxpayers with economic activities especially affected by the COVID-19 crisis, the default interest rate will be settled daily at a daily interest rate that is equivalent to fifty percent (50%) of the current interest rate certified by the Financial Superintendence of Colombia.
The National Government establishes the special VAT exemption for taxable year 2020
Pursuant to Decree 682 of May 21, 2020, the Ministry of Finance and Public Credit established the special exemption from VAT for certain goods that are sold within Colombian territory. The days in which the aforementioned exemption will apply are June 19, July 3 and July 19, 2020. The exemption will apply only on certain goods described in the decree and with the fulfilment of all the requirements provided by the law.
The Colombian Tax Authority modifies deadlines for the reporting of exogenous information for the taxable year 2019
Regarding the crisis generated by COVID-19, on May 28, 2020, the Colombian Tax Authority issued the Resolution No. 00053 of 2020, by means of which the terms for the filing of the exogenous information corresponding to the taxable year 2019, are modified.
The new dates are:
|Mayor Taxpayers||Entities and Individuals|
|Last digits of the NIT||Date||Last digits of the NIT||Dates|
|0||June 16, 2020||91-00||June 16, 2020|
|9||June 17, 2020||81-90||June 17, 2020|
|8||June 18, 2020||71-80||June 18, 2020|
|7||June 19, 2020||61-70||June 19, 2020|
|6||June 23, 2020||51-60||June 23, 2020|
|5||June 24, 2020||41-50||June 24, 2020|
|4||June 25, 2020||31-40||June 25, 2020|
|3||June 26, 2020||21-30||June 26, 2020|
|2||June 30, 2020||11-20||June 30, 2020|
|1||July 01, 2020||01-10||July 01, 2020|
Ministry of Finance and Public Credit modified the due dates for the payment of the second installment of the income tax for the taxable year 2019 for micro, small and medium-sized companies
By means of Decree 655 of May 13, 2020, the Ministry of Finance and Public Credit modified the dates for the payment of the second installment of income tax corresponding to the taxable year 2019, for legal entities that are listed by income as micro, small and medium-sized companies, in accordance with the provisions of articles 18.104.22.168.2.2 and 22.214.171.124.2.3 of decree 1074 of 2015, will have to make the corresponding payment, as follows:
|Last two digits of the NIT||Deadlines|
|96-00||November 9, 2020|
|91-95||November 10, 2020|
|86-90||November 11, 2020|
|81-85||November 12, 2020|
|76-80||November 13, 2020|
|71-75||November 17, 2020|
|66-70||November 18, 2020|
|61-65||November 19, 2020|
|56-60||November 20, 2020|
|51-55||November 23, 2020|
|46-50||November 24, 2020|
|41-45||November 25, 2020|
|36-40||November 26, 2020|
|31-35||November 27, 2020|
|26-30||November 30, 2020|
|21-25||December 1, 2020|
|16-20||December 2, 2020|
|11-15||December 3, 2020|
|06-10||December 4, 2020|
|01-05||December 7, 2020|
2.Normativity issued by the National Government regarding tax issues during the month of May 2020
In addition to the regulations issued as a result of the economic emergency situation in our country, the National Government has also issued other tax regulations during this period, which we allow ourselves to highlight below:
VAT Exclusion on goods that are introduced and marketed in the departments of Amazonas, Guainía, Guaviare, Vaupés and Vichada
By means of Decree 644 of 2020, the Ministry of Finance and Public Credit regulated numeral 13 of article 424 of the CTC, related to the VAT exclusion of some products that are introduced and marketed in the departments of Amazonas, Guainía, Guaviare, Vaupés and Vichada in Colombia.
The decree provides the definitions of the goods excluded from VAT, as well as the applicable tax and customs control. The buyer must deliver to the seller as support of the sale, the following documents:
1. Copy of the National Tax Registry
2. Copy of the commercial registration certificate issued by the Chamber of Commerce
3. Copy of the transport document that it covers, according to the transport method used
The Colombian Tax Authority established a new calendar for the implementation of the electronic invoice
Through resolution 0042 of May 5th, 2020, The Colombian Tax Authority pointed out several dispositions regarding the issuance of electronic invoice. In this sense, article 20 of the aforementioned resolution establishes a new calendar for the implementation of the electronic invoice according with the economic activity of the taxpayer registered in the National tax Registry (RUT per its acronym in Spanish).
New dates for the payment of local taxes
The Secretary of Finance of Bogotá established new dates for the payment of local taxes as follows:
|Option||Property tax||Vehicle tax|
|10% Discount||August 14, 2020||July 3, 2020|
|No discount||September 11,2020||July 4,2020|
3. Tax Rulings
Special VAT exemption
Through Tax Ruling 000516 of May 21, 2020, the Colombian Tax Authority specified certain considerations regarding the special VAT exemption established in Decree 682 of 2020, as follows:
- The special VAT exemption applies to covered goods that are sold in Colombian territory on June 19, July 3, and July 19, 2020.
- The exemption does not apply with respect to the import of the covered goods, including imports from the free trade zone.
- The exemption applies from 00:00 and until 23:59 on the days indicated above, Colombian hour.
- It does not grant the right of return or compensation. Notwithstanding the foregoing, the balances in favor generated because of the sale of the covered goods may be imputed in the VAT return for the following fiscal period.
By means of Tax Ruling 513 of May 5th, 2020, the Colombian Tax Authority established the following guidelines regarding the Solidarity Tax:
- When an individual is linked through 2 or more contracts for the provision of professional services and support for public management, all payments or credits must be taken into account for the purposes of determining the tax liability, the taxable event, the tax base and the applicable rate.
- The first COP$1.800.000 (approx. USD $500) that are not part of the taxable base taken into account for the liquidation of the tax, may be reduced from the base on the total amount of the payments or credits on account, generated on all the agreements. In other words, the indicated amount cannot be deducted on each agreement.
- Withholding tax agents must determine, in accordance with SECOP (per its acronym in Spanish) information, whether withholding tax is applicable as a solidarity tax by COVID 19 and, validate the information with the taxpayer and with other public entities.
- Once it is validated whether the withholding tax is applicable as a solidarity tax by COVID 19, each withholding agent must practice the withholding tax in the corresponding proportion, in accordance with the participation.
VAT exclusion for several health services
By means of tax ruling No. 5421 of May 12, 2020, the Colombian Tax Authority pointed out several rules regarding the application of the VAT exclusion in health services. According to the Tax Authority, health services refers to those services aimed for the protection and attention of human health. Therefore, services such as personnel selection, training, among others, cannot be categorized as health services excluded from VAT.
4. Case Law of the Constitutional Court
The Constitutional Court declared the unconstitutionality of a section of article 364-5 of the CTC regarding the donations to entities of the Special Tax Regime.
In a Case Law of January 29, 2020, the Constitutional Court declared the unconstitutionality of part of article 364-5 of the CTC that was required to report the identification of donors in the form provided in the web registry 2532 that is reported every year in the processes of updating the web registration, by the entities belonging to the Special Tax Regime.
5. Projects of Decrees and Resolutions
Procedure for filing the Transfer Pricing Informative Return - Form 120
On May 20, 2020, the Colombian Tax Authority published the draft resolution providing the procedure for the filing of the Transfer Pricing Informative Return (Form 120) mentioned in article 260 – 9 of the CTC, as well as for the notification of the Country by Country Report and the technical specifications of the information that must be submitted through the Tax Administration computer services.