Tax Bulletin No. 52

We are pleased to share the Tax Bulletin with the most relevant regulations and decisions issued in tax matters during October 2022. Among other topics, we briefly summarize about the most recent resolutions issued by the DIAN, particularly, in relation to the requirements and procedure for the qualification as Large Taxpayer, also, about who will be the group obliged to provide information to the DIAN for the taxable year 2023, as well as the concept that clarifies the determination criteria for the Single Registry of Beneficial Owners.

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.

Tax Rulings and Resolutions of the Colombian Tax Authority

Resolution establishes the requirements, causes, and procedures to grant or withdraw the classification of Large Taxpayers.

Under Resolution 1253 of 2022, the DIAN updated the criteria for the classification of Large Taxpayers and established the requirements, causes, and procedures to grant or withdraw such qualification. In this way, modifications presented in this Resolution will replace the criteria established in Resolution 000105 of November 23, 2020.

There will be modifications related to the criteria to be qualified as a Large Taxpayer, which will be as follows: i) the taxpayer, responsible or withholding agent must be in the group of subjects that contribute sixty (60%) of the total gross collection of the entity, at current prices for tax concepts without including the value of penalties, during the five (5) years before the date when the classification is made; iv) natural and/or legal persons that are part of the business group to which the taxpayer that complies with the first criteria mentioned above, for control purposes belongs.  It is stated that if the Large Taxpayer is absorbed by a taxpayer, responsible, declarant, or withholding agent not qualified as such, or that it is verified that in the merger process or case of any type of business integration a new legal entity and/or company is created, the absorbing subject and/or the new taxpayer, declarant, responsible and/or withholding agent may be classified as a Large Taxpayer, a situation that will also apply in cases of the spin-off.

Regarding the events when the qualification is not granted, it is established that the Technical Committee of Control Programs and Campaigns of the DIAN may recommend not to grant the qualification when the taxpayer, responsible and/or withholding agent is involved in complaints filed by the DIAN for punishable conducts in tax, customs and/or exchange matters or is included in any of the lists for the control of money laundering and financing of terrorism provided by the Office of Foreign Assets Control.

Finally, it is included as a cause for withdrawal of the qualification that the natural person qualified as a Large Taxpayer is registered in the Single Tax Registry as an illiquid succession.

The group of parties required to provide information to the Special Administrative Unit of the DIAN for the taxable year 2023 is established.

Through Resolution 1255 of October 26, 2022, the Colombian Tax Authority indicates the parties that are obliged to submit exogenous information for the taxable year 2023, as well as the deadlines for its delivery to the Tax Authority. As an example, public or private entities that enter into cooperation and technical assistance agreements for the support and execution of their programs or projects, with international organizations or individuals and their assimilated that during the taxable year 2022 or 2023 have obtained gross revenue more than COP 500,000,000 and that the sum of the income obtained from the capital and/or non-labor income during the taxable year 2023 exceeds COP$100,000,000.

The Colombian Tax Authority issues a concept related to the invoicing obligations and the Electronic Invoicing Regime.

The Tax Administration, through the tax ruling No. 912843 of September 15, 2022, included an addition to Unified Tax Ruling No. 0106 of 2022, related to the obligation to invoice and the Electronic Invoicing regime. 0106 of 2022, referring to the obligation to invoice and the electronic invoicing system, in the addition to the Unified Concept the nature and definition of the registration of the electronic invoice of sale as a value title is established considering that the registration in the RADIAN of the transfer of economic rights contained in an electronic invoice that is a value title must be made, for the purpose that the transfer can be perfected and thus comply with Article 616-1 of the Colombian Tax Code, the electronic invoicing system and the provisions of Decree 1075 of 2015.

On the other hand, the authority analyzes how to comply with the remittance of the electronic message of confirmation of receipt of the electronic invoice of sale and the electronic message of receipt of the goods and/or services acquired when the sale of goods and/or provision of services is made through autonomous patrimonies.

The Tax Administration clarifies the determination criteria for the Single Registry of Beneficial Ownership (“RUB” for its acronym in Spanish).

On September 19^th of 2022, the DIAN issued the Official Letter No. 906998 which clarifies the understanding of the control for the Single Registry of Beneficial Owner (RUB) of an individual against a company or other type of vehicles, establishing through a systematic interpretation of Article 6 of DIAN Resolution No. 000164 of 2021, that, first, numeral 1 of Article 6 of the mentioned resolution will be applied, which refers to ownership. Once the ownership criteria have been applied to determine the possible beneficial owners, the control criteria established in paragraph 2 of the Resolution must be applied, which refers to the control exercised by a means other than the ownership of 5% or more of the capital or voting rights and/or the benefit of 5% or more of the assets, yields or profits of the legal entity.

Requirements for the liquidation and payment of the customs penalty for untimeliness.

DIAN tax ruling No. 1238 of 2022 clarifies the factual assumptions and moments when penalties for presenting a late import return must be paid, considering whether it is the initial, anticipated, or correction of the import return. This, considering that article 175 of Decree 1165 of 2019, establishes the possibility of settling and paying the penalty for not complying with the deadline established for filing the mandatory anticipated import return through this same document.

Thus, it is established that the liquidation and payment of the penalty may be presented in the anticipated import return when it is presented before the arrival of the merchandise to the National Customs Territory, which may also be done through the correction of the anticipated import return or with the Official Receipt of Payment of Customs Duties and Exchange Penalties. On the other hand, these ruling states that when the means of transportation of the goods have already arrived in the country, the initial import return may replace the mandatory anticipated import return. It should also be noted that the penalty in question will be equivalent to 1% of the goods’ FOB (Free on Board) value, without such value exceeding 300 UVTs (COP 11,401,200).

Case Law of the Council of State  

The precedent related to the term to correct tax returns in the events of the imputation of credit balances is unified.

The Council of State issued a decision of precedent unification regarding the scope of the expression "in any term" indicated in article 43 of Law 962 of 2005. To such effects, they pointed out that for the informal correction or at the request of the interested party of tax returns to charge to the payment of the liquidated debt amounts coming from the return of the immediately preceding period, either by way of credit balance or advance payment, is governed by article 43 of Law 962 of 2005, without reference to articles 588 and 589 of the Tax Statute. Thus, this type of correction to the tax return is not subject to the time limit established by these two tax law articles, since the regulation contained in article 43 of Law 962 is autonomous and special.

The Council added that the requests for this type of correction are also not limited by the time limits for the finality of the returns because such correction does not affect or modify the economic facts carried out in the declared period that have incidence in the liquidation of the main tax obligation that is caused by that period.

Finally, the Council established the rule of unification that indicates that the special correction procedure provided in article 43 of Law 962 of 2005 enables modifications to the tax return to increase or decrease the amounts imputed from one declared period to the next.

These precedent rules apply to proceedings pending administrative and judicial resolution and may not be applied to previously decided conflicts.

Constitutional Court declares that the "Convention to homologate the tax treatment provided in the agreements to avoid double taxation subscribed between the States parties to the Framework Agreement of the Pacific Alliance" is accordingly in force with the Colombian constitution.

The Constitutional Court, through Ruling C - 316 of 2022 declared that Law 2105 of 2021 is accordingly in force in connection with the Colombian Constitution and its principles, which seeks to implement the agreements to avoid double taxation among the states party to the Pacific Alliance, executory. Thus, the Court assumes that the Pacific Alliance is an economic initiative that promotes development among Chile, Colombia, Mexico, and Peru, which expects to integrate the countries of the region to promote growth and competitiveness in the market. Consequently, the High Court found that the waiver of the taxing power of the State to be able to tax certain economic facts set by this agreement is related to the purposes of the Constitution, after reviewing the material and formal requirements of the procedure. The aforementioned, insofar as the economic and social welfare of the population is promoted, considering the fundamentals of international policy and the specialty of national law according to the source of the income generated.

Projects of Decrees and Resolutions 

The value of the UVT applicable for 2023 is fixed.

Under the Draft Resolution, the DIAN intends to set at forty-two thousand four hundred and twelve pesos ($42,412) the value of the Tax Value Unit - UVT that will apply during the year 2023.

Additionally, the Draft Resolution establishes that to exchange the figures expressed in UVT into absolute values, the number of UVT must be multiplied by the value of the UVT and the result is approximated by the procedure established in article 868 of the Colombian Tax Code in its paragraph 6.