Tax Bulletin No. 49

We are pleased to share the Tax Bulletin with the most relevant regulations and decisions issued in tax matters in the month of July 2022. Among other topics, we report on the new laws that include the cities of Buenaventura and Barrancabermeja in the Special Tax Regime of the ZESE Law. We also include the DIAN Resolution that establishes the changes in the declaration of assets abroad for of Income Tax payers, as well as a ruling of the Council of State where the importance of accounting in evidentiary matters for tax proceedings is clarified.

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.

Regulations issued by the National Government regarding tax matters

Buenaventura and Barrancabermeja are included in the Special Tax Regime of the ZESE Law 

The Colombian congress issued Laws No. 2238 and No. 2240 of 2022 regarding the Special Tax Regime the Special Economic and Social Zone ("ZESE"), provided for in Article 268 of Law 1995 of 2019. These Laws seek to include this special regime in the district of Buenaventura and of Barrancabermeja, respectively, granting tax benefits to commercial companies that are incorporated under the ZESE regime within the 3 years following the issuance of these laws. 

The National Valuation Contribution ("CNV" per its acronym in Spanish) for the transportation sector is regulated.

Last July 21, 2022, the Ministry of Finance and Public Credit issued Decree number 1255 of 2022, in order to regulate the National Valuation Contribution for the transportation sector, by adding Books 4 and 5 to Decree 1625 of 2016, Sole Regulatory in Tax Matters. The foregoing, considering that Law 1819 of 2016 constituted a structural tax reform that, among other things, introduced the Valorization Contribution (Articles 239 to 254) as a levy on the benefit acquired by real estate properties for works of public interest or infrastructure projects. 

In this sense, the Decree in question established the necessary aspects for the application of the CNV of the transportation sector, such as the object, the subjects, the taxable base, the liquidation, collection, as well as the rates for the liquidation of the financing interests of the deferred payments of the Contribution and the procedure for the determination of the real estate of interest, among other things.

The Ministry of Finance regulates article 800-1 of the Colombian Tax Code on the mechanism of “Works for Taxes”.

On July, 2022, Decree 1208 was issued to regulate paragraph 4 of Article 238 of Law 1819 of 2016 and Article 800-1 of the Colombian Tax Code. This Article grants taxpayers who have obtained gross income over 33,610 Tax Value Units the possibility of entering into agreements with public entities at the national level to receive negotiable securities in exchange for the payment of income tax. 

The last tax reform, Law 2155 of 2021, modified and added said article establishing that the purpose of the agreements will be the direct investment in the execution of projects of economic and social transcendence in the municipalities most affected by the armed conflict in Colombia. It also established a series of guidelines to carry out these agreements and to formalize the “Works for Taxes” mechanism, so it became necessary to amend the relevant articles of Decree 1625 of 2016 (Articles 1. 6.5.3.3.3., 1.6.6.1.2., 1.6.6.1.3, 1.6.6.6.2.2., 1.6.6.2.3, 1.6.6.3.1., 1.6.6.3.3.3., 1.6.6.3.4., 1.6.6.4.5., 1.6.6.5.4. and 1.6.6.6.6.1 to 1.6.6.6.14.)

Tax Rulings and Resolutions of the Colombian Tax Authority

Changes to the Annual Return of Assets Abroad 

Resolution No. 001096 of 2022, issued by the Colombian Tax Authority modified Form No. 160 “Annual Return of Assets Abroad” and established that the value of assets held abroad must be recorded in local currency, in accordance with the provisions of Book One, Title II, Chapter I of the Colombian Tax Code (Articles 261 to 280). 

The scope of the possible deductions for investments on Non-Conventional Energy Sources is clarified

The Colombian Tax Authority, by means of Concept No. 100208192-849 of 2022, clarified that investors who jointly and directly make investments in projects for the generation of electric power from Non-Conventional Energy Sources or in projects of Efficient Energy Management, who are also taxpayers of the Income Tax, may apply to the tax benefit provided for in Article 11 of Law 1715 of 2014, when they comply with all legal requirements.

Companies listed on stock exchanges are not exempt from providing information in the Single Registry of Beneficial Owners ("RUB", per its acronym in Spanish)

The Colombian Tax Administration issued Concept No. 100208192-854 on June 30^th of the current year and stated that Resolution No. 000164 of 2021 does not establish any exception for shareholders of national companies listed in stock exchanges regarding their obligation to provide information on the ultimate beneficial owner. Therefore, in cases where a shareholder of a Colombian company is domiciled abroad, the general criteria to determine the ultimate beneficial owners of the company must be applied.

Difference between digitized and digital supporting documents in customs matters

The Colombian Tax Authority, by means of Concept No. 000S2022905373 of July 12, 2022, clarified that the process of digitizing a document consists of converting a physical document into electronic representations, through a scanner o similar means, while the digitized document is one that remains physical, but the image has been subjected to a digitalization process.

Therefore, it was established that the technical parameters and procedures for the issuance, transfer, digitalization, use and control of documents supporting import and export declarations through electronic computer services of the Tax Administration have not yet been regulates. Until such regulations are obtained, it will not be possible to send digitalized transport documents to be used in customs procedures and operations.

It was concluded that the digital signature on the transport documents must be created or generated from an electronic form that can be read, reproduced, and transferred to the electronic computer services. Otherwise, the signature of the customs endorsement on the transport document cannot be digital.

Case Law of the Constitutional Court and Council of State

The modification of the tax-liquidation made by the taxpayer does not require their prior consent.

The Fourth Section of the Council of State issued Ruling No. 25529 of 2022 and established how the figure of revocation operates in self-assessments made by taxpayers. The Corporation recalled that Article 73 of the Code of Administrative Procedure and Administrative Disputes provides for the direct revocation as a mechanism that the authority must leave without legal effect its own specific administrative acts, prior express consent of the holder of the right or the legal situation altered. 

Although the official liquidations of revision are administrative acts of a particular and concrete nature issued by the DIAN in exercise of its powers of inspection and investigation, appeals may be filed against these acts to modify or revoke them. In this sense, the official liquidation is only final if the appeal is not filed in administrative proceedings or if the appeal is totally denied. Additionally, the purpose of the liquidations is not an administrative decision but to modify the private liquidation of the taxpayer, which does not have the character of an administrative act and, therefore, is not subject to the figure of direct revocation.

The Council of State reiterates that the accounting is valid evidence unless it can be disproved by the authorities. 

In Decision No. 25997 of June 30, 2022, the Fourth Section of the Council of State recalled that Article 772 of the Tax Statute establishes that the accounting kept in due form, i.e. when it complies with the requirements set forth in Articles 773 and 774 of the Tax Statute, constitutes evidence in favor of the taxpayer. 

Additionally, this Corporation established that the accounting evidence is the main evidence in tax matters, since it reveals the economic reality of the commercial activities carried out by the taxpayer. Although it is the evidence "par excellence", it is not the only evidence, since it can be disproved through other means of proof indicated in the tax or procedural laws.

Projects of Decrees and Resolutions 

Bill seeks to adjust the requirements for not charging the National Carbon Tax

Through the draft decree published on July 18, 2022, the government seeks to modify the procedure and the bases to be able to apply the non-causation of the National Carbon Tax, in order to strengthen the verification mechanism during the stage of evaluation of applications according to the mitigation results presented by the taxpayers in order to certify being carbon neutral. Thus, the draft decree establishes amendments to various articles of Title 5 of Part 5 of Book 1, Book 1 of Decree 1625 of 2016, Sole Regulatory Decree on Tax Matters, specifically related to the procedure to make effective the non-causation of the National Carbon Tax, its requirements, the explanation of the verification report, benefits, information control, verification of compliance with international schemes, and the responsibilities of the GHG validation and verification bodies, who perform an objective assessment on the methodology of mitigation quantification, among others. In this way, the aspects raised allow certifying that the passive subjects of this tax are considered as "carbon neutral" generators according to the guidelines of the Ministry of Environment and Sustainable Businesses and therefore, they are not obliged to pay the tax for not affecting the quality of the air.

Draft Decree expects to set the guidelines for electronic invoicing. 

The project published by the Ministry of Finance and Public Credit of July 1, 2022, aims to amend and replace certain articles of Chapter 4 of Title 1 of Part 6 of Part 6 of Book 1 of Decree 1625 of 2016 Sole Regulatory Decree on Tax Matters, in order to harmonize its content with the amendments introduced to Article 616-1 of the Tax Statute. The aforementioned changes, considering that some tax issues such as implementation schedules, issuance and delivery of the sales invoice and/or equivalent document, the generation of the documents that are part of the invoicing system and the subjects obliged to invoice must be updated considering article 616-1, as well as the definitions of the invoicing system and its components, among others, since said article establishes all the current foundations and requirements of said system in tax matters.