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Tax Bulletin No. 23

May 2020

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 TaxpayersEntities and Individuals
Last digits of the NITDateLast digits of the NITDates
0June 16, 202091-00June 16, 2020
9June 17, 202081-90June 17, 2020
8June 18, 202071-80June 18, 2020
7June 19, 202061-70June 19, 2020
6June 23, 202051-60June 23, 2020
5June 24, 202041-50June 24, 2020
4June 25, 202031-40June 25, 2020
3June 26, 202021-30June 26, 2020
2June 30, 202011-20June 30, 2020
1July 01, 202001-10July 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 2.2.1.13.2.2 and 2.2.1.13.2.3 of decree 1074 of 2015, will have to make the corresponding payment, as follows:

Entities
Last two digits of the NITDeadlines
96-00November 9, 2020
91-95November 10, 2020
86-90November 11, 2020
81-85November 12, 2020
76-80November 13, 2020
71-75November 17, 2020
66-70November 18, 2020
61-65November 19, 2020
56-60November 20, 2020
51-55November 23, 2020
46-50November 24, 2020
41-45November 25, 2020
36-40November 26, 2020
31-35November 27, 2020
26-30November 30, 2020
21-25December 1, 2020
16-20December 2, 2020
11-15December 3, 2020
06-10December 4, 2020
01-05December 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:

OptionProperty taxVehicle tax
10% DiscountAugust 14, 2020July 3, 2020
No discountSeptember 11,2020July 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.

Solidarity Tax

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.

Publication
Boletín Tributario No. 23 - Mayo 2020
Download
PDF 4 MB

Authors

Natalia Guerrero
Natalia Guerrero
Partner
Bogotá
Javier Orozco
Javier Orozco, LL.M.
Associate
Bogotá
Angélica Gómez
Associate
Bogotá
Juan Castro
Juan Castro
Tax Coordinator
Bogotá
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