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Tax Bulletin No. 9

March 2019

We share our Tax Bulletin No. 9 of March 2019 with the latest decisions and opinions released by the Administrative Tribunal of Cundinamarca and the Tax Authority, in connection with national and local taxes, and tax procedure.

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.

1. Legislation

On March 7th of 2019, the Tax Authority issued Resolution number 16, under which it prescribed several forms for the fulfillment of tax obligations for fiscal year 2019. According with the aforementioned Resolution, the tax forms for the fulfillment of tax obligations for fiscal year 2019 are the following:

Tax return

Form No.

Income tax return for national companies and assimilated entities and for non-residents entities

110

Income tax return for individuals

210

Value added tax return

300

National consumption tax return

310

Withholding tax return

350

2. Tax Rulings

2.1 Tax Ruling No. 1430 issued by Colombian Tax Authority on January 21st, 2019

  • In accordance with Tax Ruling No. 1430, direct users or recipients of services rendered from abroad, must practice VAT withholding tax in terms of article 437 – 2 of Colombian Tax Code (“CTC”), when they prove their condition of responsible of the VAT. On the other hand, if service providers from abroad embrace the withholding tax system set forth in paragraph 3 of article 437 -2 of CTC and companies’ issuers of debit or credit card no do not practice the VAT withholding tax, such entities will be responsible for the non-retained amounts. 

2.2 Tax Ruling No. 1169 issued by Colombian Tax Authority on January 16th, 2019

  • By means of Tax Ruling No. 1169, the Colombian Tax Authority pointed out that advances for future capitalizations performed by nonresidents in national companies must be treated for tax purposes as a contribution in national companies. In this sense, cash or in-kind contributions will not be taxed with corporate income tax, as long as the requirements established in article 319 of CTC are fulfilled.

2.3 Tax ruling No. 4922 issued by Colombian Tax Authority on February 27th, 2019

  • The Colombian Tax Authority explained, trough Tax Ruling No. 4922, that tickets issued by cash register machines are valid to request costs and deductions in income tax return, as well as discountable taxes on VAT tax return. The above, considering that up to now, the National Government has not issued a Regulatory Decree in this subject and, therefore, dispositions that were in force before the expedition of Law 1943 of 2019 must apply. 

2.4 Tax ruling No. 32441 issued by Colombian Tax Authority on November 7th, 2018

  • In terms of Tax Ruling No. 32441, the execution of agreements to access to the tax benefit established in article 238 of Law 1819 of 2016, triggers public work contribution, as long as the agreements executed by the parties can be classified as public work agreements. In this sense, according with the Tax Authority the meeting of the following requirements is necessary for the arising of the public work contribution: (i) execution of a public work agreement; (ii) the contractor must be a company or an individual; (iii) that the contracting party is a public entity.

2.5 Tax ruling No. 902789 issued by Colombian Tax Authority on December 6th, 2018

  • By means of Tax Ruling No. 902789, the Colombian Tax Authority clarified the terms of firmness established in Law 1819 of 2016 are applicable to tax returns presented after the law entered in force. In concept of the Tax Authority the terms of firmness of tax returns are rules of procedural character and according with Colombian legislation these type of rules apply once the Law enters in force. Therefore, terms of firmness established in Law 1819 of 2016 are applicable to tax returns presented after its entry in force.

2.6 Tax ruling No. 27647 issued by Colombian Tax Authority on September 26th, 2018

  • Through Tax Ruling No. 27647, the Colombian Tax Authority established that the tax returns presented by the taxpayers have a private nature and, therefore, such information cannot be used for intelligence and counter intelligence activities referred in Law 1621 of 2013, unless they are decreed by a court as a legal evidence.

3. Judgements

3.1 The Council of Estate indicated through judgment 22279 issued on August 23rd, 2018, that the expression “resident” used to evaluate the tax liability in the public lighting system, implies a physical presence of the company in the jurisdiction where the Tax Authority is charging such tax.

3.2    The Council of Estate indicated through judgment 18192 issued on January 21st, 2019, that tax returns in which fiscal losses are offset are subject to the audit benefit, as long as they fulfil with the requirements set forth in article 689 – 1 of CTC. For tax purposes the audit benefit implies that tax returns liquidated by taxpayers in which a higher income tax is generated in relation with the tax return of previous year, cannot be reviewed or discussed by the Tax Authority after a term of 18 months.  

4. Projects of Decrees and Resolutions

4.1    The Colombian Ministry of Finance and Public Credit issued a draft of decree that aims to regulate article 118 – 1 of Colombian Tax Code (CTC). In this point, it is important to mention that article 118 – 1 of CTC refers to thin capitalization rules and was recently modified by Law 1943 of 2018 (Tax Reform).   

4.2    On March 7, 2019, the Colombian Ministry of Finance and Public Credit issued a draft of decree that seeks to regulate the new voluntary disclosure program for 2019. According to this program, Taxpayers who wish to benefit from this asset’s regularization should file the corresponding return at the latest on September 25th, 2019.

Publication
Boletín No. 9 - Mar 2019
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Authors

Natalia Guerrero
Natalia Guerrero
Partner
Bogotá
Javier Orozco
Javier Orozco, LL.M.
Associate
Bogotá
Helena-Salazar-CMS-Colombia
Helena Salazar