Country Tax Guide - Baker Tilly
13
Colombia Tax Guide
Transcript of Country Tax Guide - Baker Tilly
Colombia Tax Guide
Baker Tilly
www.bakertilly.co
Bogotá DC
Oscar Zárate
T: +57 (1) 6167788 extension 515
Bucaramanga
Gabriel Vasquez
T: +57 (7) 6474725 extension 15-16
Baker Tilly is the trading name of Baker Tilly Colombia Ltda.
A. Direct taxation: Companies
1. Resident companies
Residence A company is resident in Colombia if it is incorporated or has its place of effective management in Colombia
Tax base Worldwide
Corporate tax rates 33%
4% income tax surcharge when the tax base of the previous tax year exceeds COP 800,000,000
Alternative minimum tax Yes, an alternative minimum tax applies when 3.5% of the net equity of the previous tax year exceeds the net taxable income
Capital gains 10%
0% for gains on certain listed shares
Loss carry-forward Yes, under certain conditions
Loss carry-back No
Unilateral double taxation relief Yes, ordinary tax credit
2. Non-resident companies
Corporate tax rates 33%
4% income tax surcharge when the tax base of the previous tax year exceeds COP 800,000,000
The above-mentioned income tax rates apply to foreign companies that are obliged to file an income tax return in Colombia
Capital gains on sale of shares in resident companies 10% if shares were owned as fixed assets for more than 2 years, otherwise the general corporate income tax rate applies
Capital gains on sale of immovable property 10% if immovable property was owned as a fixed asset for more than 2 years, otherwise the general corporate income tax rate applies
Withholding tax rates
Branch profits 5% provided that profits were subject to corporate income tax; otherwise 5% branch profits tax will be imposed once a 35% corporate income tax has been applied (effective tax rate 38.25%)
Dividends 5% provided that profits were subject to corporate income tax; otherwise 5% dividends tax will be imposed once a 35% corporate income tax has been applied (effective tax rate 38.25%)
Interest 15% (general rate)
5% for interest on loans with at least an 8-year term for financing infrastructure projects under Public Private Association (APP)
1% for payments under certain aircraft leasing agreements
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
Some exemptions apply
Royalties 15% (general rate)
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
Fees (technical) 15% (general rate)
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
Fees (management) 15%
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
3. Specific issues
Participation relief Inbound dividends: no
Outbound dividends: no
Group treatment No
Incentives New environmental investment
Free trade zones
Donations to qualifying research and technology development projects
Donations to qualifying graduate scholarships programmes
Donations to qualifying non-for-profit entities
Production of electricity using wind resources, biomass or agricultural waste
Social and priority interest housing projects
Anti-avoidance
Transfer pricing legislation Yes
Thin capitalization legislation Yes
Controlled foreign company legislation Yes
General anti-avoidance rule (GAAR) Yes
Other anti-avoidance legislation Tax haven legislation
Foreign assets report
B. Direct taxation: Individuals
1. Resident individuals
Residence An individual is resident in Colombia if he is (1) physically present in Colombia for more than 183 days, (2) a foreign service officer and exempt from taxation, or (3) a Colombian national under certain conditions
Taxable income Worldwide
Income tax rates Progressive
Labour and pension income: top rate 33% (above 4,100 UVT) (1 UVT = COP 33,156 for 2018)
Non-labour and investment income: top rate 35% (above 4,000 UVT)
Alternative minimum tax Yes, an alternative minimum tax applies when 3.5% of the net equity of the previous year exceeds the net taxable income
Capital gains 10%
Unilateral double taxation relief Yes, ordinary tax credit method
Social security contributions 4% health insurance
4% pension fund (additional amounts may apply depending on the monthly wage)
2. Non-resident individuals
Income tax rates 35%
7% for professors under certain conditions
Capital gains on sale of shares in resident companies 10% on net gain if shares were owned as fixed assets for more than 2 years, otherwise 35% (ordinary income tax rate)
Capital gains on sale of immovable property 10% if immovable property was owned as a fixed asset for more than 2 years, otherwise 35% (ordinary income tax rate)
Withholding tax rates
Employment income 15%
7% for professors under certain conditions
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
7% for professors under certain conditions
Dividends 5% provided that profits were subject to corporate tax; otherwise the 5% dividends withholding tax will be imposed once a 35% corporate income tax has been applied (effective tax rate 38.25%)
Interest 15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
Royalties 15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
Fees (technical) 15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
Fees (directors) 15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a preferential tax regime
C. Indirect taxation: Value added tax (VAT)/Goods and services tax (GST)
Taxable events Importation of goods
Domestic supply of goods
Provision of services
VAT/GST (standard) 19%
VAT/GST (reduced) 0%, 5%
VAT/GST (increased) No
Registration/deregistration threshold No
VAT group No
D. Other taxes
Inheritance and gift taxes 10% (capital gains tax)
Net wealth tax (individual) Yes, progressive: top rate 1.5% over COP 5 billion
Net wealth tax (corporate) Yes, progressive: top rate 1% over COP 5 billion
Real estate taxes Yes, tax rate depends on use and characteristics of the real estate
Capital duty No (local registry tax may apply in certain cases)
Transfer tax No (local registry tax may apply on certain transfers)
Stamp duty Local stamp taxes may apply on documents issued or signed by public entities
Excise duties Yes
Other main taxes Financial transactions tax
Consumption tax
Motor vehicle tax
Environmental taxes
E. General information
Sources of tax law Tax Code (Estatuto Tributario)
Regulatory decrees (decretos regulatorios)
Local tax codes (estatutos de rentas departamentales, municipales y distritales)
Main types of business entities Stock company (sociedad anonima, SA)
Limited liability company (sociedad de responsabilidad limitada, Ltda.)
Limited partnership (sociedad en comandita simple)
Partnership limited by shares (sociedad en comandita por acciones)
Unipersonal enterprise (empresa unipersonal, EU)
Simplified stock company (sociedad por acciones simplificada, SAS)
Accounting principles IFRS
Currency Colombian peso (COP)
Foreign exchange control Yes, foreign exchange regulations on inbound and outbound transactions as prescribed by the Central Bank (Banco de la Republica)
Official websites Tax administration
Ministry of Finance
Last reviewed: 31 January 2018
Effective date: 1 January 2018
Compliance Information
A. Corporate taxation
1. General information
Tax rate 33%
4% income tax surcharge when the tax base of the previous tax year exceeds COP 800,000,000
Tax rebates/tax-
free amounts
Applicable to specific sectors and activities
Surtaxes Income tax surcharge: 4% (2018) if the taxable base for the previous year exceeds COP 800,000,000
Turnover tax (Impuesto de Industria y Comercio, ICA): the rate varies for each activity and municipality.
Previous tax rates
2017 40% (34% + 6%)
2016 40% (25% + 9% + 6%)
2015 39% (25% + 9% + 5%)
2014 34% (25% + 9%)
2. Registration
Deadline Companies must register in the National Tax Registry (Registro Único Tributario, RUT) before starting business
activities.
Competent
authority
National Tax Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN) and Chamber of Commerce
Registration form Form 001
3. Tax return and tax payment
Tax year 1 January to 31 December
With respect to liquidation of companies, the tax year ends as at the date the liquidation decision is approved by
the shareholders.
With respect to estates, the tax year ends as at the date the estate is liquidated by a court decision or by notarial
deed.
Type of
assessment
Self-assessment
Official assessment in specific circumstances (e.g. if tax administration is of the opinion that return filed is
inaccurate)
Filing deadline Between 10 April and 8 May depending on tax registry number
With respect to sales of assets by non-residents that are subject to foreign exchange regulations: within 1 month
of the date of the transaction
Large taxpayers: between 10 and 23 April
Extension of filing
deadline
Not applicable
Filing mode Electronic
Form Form 110
Documents to be
submitted with tax
return
Form 2516
Payment deadline First instalment: between 10 April and 8 May depending on tax registry number
Second instalment: between 13 and 26 June depending on tax registry number
Large taxpayers: First instalment between 8 and 21 February; second instalment between 10 and 23 April; third
instalment between 13 and 26 June
Extension of
payment deadline
Not applicable
Amended return Penalty for voluntary amendment of the income tax return that results in an increase in income tax due or a
reduction of the refundable balance (the amendment must be made within 2 years following the deadline for
filing the tax return and before the tax administration issues an official assessment), as follows:
– 10% of the higher resulting amount due or lower resulting refundable balance if the tax return is amended
before notification from the tax administration; and
– 20% of the higher resulting amount payable or lower resulting refundable balance if the tax return is amended
following notification from the tax administration.
If the voluntary amendment of the tax return does not result in an increase in the tax due or a reduction of the
refundable balance, no penalty applies.
Voluntary amendment of the income tax return that results in a reduction of the income tax due or an increase in
the refundable balance (the taxpayer being required to submit a request for amending the tax return to the tax
administration during the year following the deadline for filing the tax return)
Refund of
overpaid tax
A credit balance refund claim may be filed within 2 years from the date the return has to be filed according to
the deadlines provided by the national government. The tax administration must pay interest on the amount to
be refunded from the deadline applicable to the tax authority for refunding the credit balance to the date on
which the corresponding amount is effectively paid by the tax administration. Income tax paid in excess or
unduly paid (as there was no obligation to make the tax payment) may be claimed by the taxpayer within 5
years.
Advance payments At the taxpayer’s choice, the prepayment may be 75% of the net income tax assessed in the return, or the
average of the income tax assessed for the previous 2 years.
The prepayment is reduced by the taxes withheld during the tax year.
For taxpayers filing their first two income tax returns, the prepayment is a percentage of the income tax due:
25% for the first year, 50% for the second year and 75% for subsequent years.
Consolidated
returns
Not applicable
Time limit for tax
assessments
3 years from the date the tax return has to be filed according to the deadlines provided by the national
government, or 6 years if the company has set off losses.
Mitigation of
effect of time limit
for tax
assessments
Not applicable
4. Withholding tax obligations
Branch profits 5% provided that profits were subject to corporate income tax; otherwise 5% branch profits tax will be imposed
once a 35% corporate income tax has been applied (effective tax rate 38.25%)
Dividends 5% provided that profits were subject to corporate income tax; otherwise 5% dividends tax will be imposed
once a 35% corporate income tax has been applied (effective tax rate 38.25%)
Interest 15% (general rate)
5% for interest on loans with at least an 8-year term for financing infrastructure projects under Public Private
Association (APP)
1% for payments under certain aircraft leasing agreements
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a
preferential tax regime
Some exemptions apply
Royalties 15% (general rate)
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a
preferential tax regime
Fees (technical
services)
15% (general rate)
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a
preferential tax regime
Fees (management
services)
15%
33% for payments made to non-cooperative jurisdictions, low-tax jurisdictions or jurisdictions with a
preferential tax regime
Deadline for
remittance of
withholding tax
The amounts withheld must be reported and paid during the month following the month in which the payment
subject to income tax withholding is made according to the deadlines provided by the national government.
Form Form 350
5. Employer withholding obligations
Wage/payroll tax The amounts withheld, according to Procedure 1 or 2 applicable to employees, must be reported and paid during
the month following the month in which the payment is made according to the deadlines provided by the
national government.
Other withholding
obligations
4% for health insurance purposes
4% for pension fund purposes (with additional amounts possibly applying depending on the monthly wage)
6. Business records
Type of records Records of taxpayer's assets and liabilities, accounting records, records enabling verification of all receipts and
expenditures, invoices, tax returns filed, official receipts of tax payments made, and supporting documentation
of the tax amounts withheld
Retention period Same time limit for assessments, i.e. 3 years from the date the tax return has to be filed according to the
deadlines provided by the national government, or 6 years if the company has set off losses. Special retention
period applies for commercial and accounting purposes.
Electronic storage Allowed in the case of accounting books and records held in magnetic media format
B. Individual taxation
1. General information
Tax rate Progressive
Labour and pension income: top rate 33% (above 4,100 UVT) (1 UVT = COP 33,156 for 2018)
Non-labour and investment income: top rate 35% (above 4,000 UVT)
Tax rebates/tax-
free amounts
25% of the gross employment income is exempt up to a monthly amount of 240 TVUs.
Specific items of income are considered exempt income or non-taxable income.
Surtaxes Turnover tax (Impuesto de Industria y Comercio, ICA) is levied on entrepreneurs: the rate varies for each
activity and municipality.
An optional single tax, which replaces income tax, applies for small entrepreneurs (monotributo) generating
gross income between 1,400 TVUs and 3,500 TVUs during the tax year, and complying with specific
requirements.
Previous tax rates
2017 Progressive
Top rate labour and pension schedule: 33%
Top rate non-labour and investment schedule: 35%
2016 Progressive
Top rate 33%
2015 Progressive
Top rate 33%
2014 Progressive
Top rate 33%
2. Registration
Deadline Individuals required to file an income tax return must register in the National Tax Registry (Registro Único
Tributario, RUT) before the deadline for filing the income tax return for the corresponding tax year as provided
by the national government.
Entrepreneurs must register in the National Tax Registry (Registro Único Tributario, RUT) before starting
business activities.
Competent
authority
National Tax Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN)
Registration form Form 001
3. Tax return and tax payment
Tax year 1 January to 31 December
Type of
assessment
Self-assessment
Official assessment in specific circumstances (e.g. if tax administration is of the opinion that return filed is
inaccurate)
Filing deadline Between 9 August and 19 October 2018 depending on the taxpayer's tax identification number
Extension of filing
deadline
Not applicable
Filing mode Paper or electronic
Form – Form 210: for resident individuals
– Form 110: for non-resident individuals
Documents to be
submitted with tax
return
Payment deadline Between 9 August and 19 October 2018 depending on the taxpayer's tax identification number
Extension of
payment deadline
Not applicable
Amended return Penalty for voluntary amendment of the income tax return that results in an increase in income tax due or a
reduction of the refundable balance (the amendment must be made within 2 years following the deadline for
filing the tax return and before the tax administration issues an official assessment), as follows:
– 10% of the higher resulting amount due or lower resulting refundable balance if the tax return is amended
before notification from the tax administration; and
– 20% of the higher resulting amount payable or lower resulting refundable balance if the tax return is amended
following notification from the tax administration.
If the voluntary amendment of the tax return does not result in an increase in the tax due or a reduction of the
refundable balance, no penalty applies.
Voluntary amendment of the income tax return that results in a reduction of the income tax due or an increase in
the refundable balance (the taxpayer being required to submit a request for amending the tax return to the tax
administration during the year following the deadline for filing the tax return)
Refund of
overpaid tax
A credit balance refund claim may be filed within 2 years from the date the return has to be filed according to
the deadlines provided by the national government. The tax authority must pay interest on the amount to be
refunded from the deadline applicable to the tax authority for refunding the credit balance paid to the date on
which the corresponding amount is effectively paid by the tax administration. Income tax paid in excess or
unduly paid (as there was no obligation to make the tax payment) may be claimed by the taxpayer within 5
years.
Advance payments At the taxpayer’s choice, the prepayment may be 75% of the net income tax assessed in the return, or the
average of the income tax assessed for the previous 2 years.
The prepayment is reduced by the taxes withheld during the tax year.
For taxpayers filing their first two income tax returns, the prepayment is a percentage of the income tax due:
25% for the first year, 50% for the second year and 75% for subsequent years.
Time limit for tax
assessments
3 years from the date the tax return has to be filed according to the deadlines provided by the national
government
Mitigation of
effect of time limit
for tax
assessments
Not applicable
4. Withholding tax obligations
Employment
income
15%
7% for professors under certain conditions
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or
jurisdictions with a preferential tax regime
7% for professors under certain conditions
Dividends 5% provided that profits were subject to corporate tax; otherwise the 5% dividends withholding tax will be
imposed once a 35% corporate income tax has been applied (effective tax rate 38.25%)
Interest 15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or
jurisdictions with a preferential tax regime
Royalties 15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or
jurisdictions with a preferential tax regime
Fees (technical
services)
15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or
jurisdictions with a preferential tax regime
Fees (management
services)
15%
33% for payments made to individuals resident in non-cooperative jurisdictions, low-tax jurisdictions or
jurisdictions with a preferential tax regime
Deadline for
remittance of
withholding tax
The amounts withheld must be reported and paid during the month following the month in which the payment
subject to income tax withholding is made according to the deadlines provided by the national government.
Form Form 350
5. Employer withholding obligations
Wage/payroll tax See section A.5.
Other withholding
obligations
See section A.5.
6. Business records
Type of records See section A.6.
Retention period See section A.6.
Electronic storage See section A.6.
C. Indirect taxation
1. General information
Standard rate 19%
Reduced rate 0%, 5%
Increased rate No
2. Registration and deregistration
Registration
threshold
No
Registration
deadline
Taxpayers must register in the National Tax Registry (Registro Único Tributario, RUT) before starting any
economic activity in Colombia.
Competent
authority
National Tax Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN)
Registration form Form 001
Group registration No
Voluntary
registration
Possible
Deregistration
threshold
Not applicable
Deregistration
deadline
Not applicable
Deregistration
form
VAT taxpayers terminating activities subject to VAT must update their National Tax Registry (Registro Único
Tributario, RUT) personally or through the National Tax Authority (Dirección de Impuestos Nacionales,
DIAN)’s website.
3. Tax return and payment
Filing frequency Bi-monthly: large taxpayers and taxpayers with income exceeding 92,000 TVUs during the preceding calendar
year or taxpayers dealing with exempt goods
Quarterly: taxpayers with income up to 92,000 TVUs during the preceding calendar year
Filing deadline Bi-monthly VAT returns: in March, May, July, September, November and January, on the deadlines provided
by the national government according to the last digit of the Tax Identification Number
Quarterly VAT returns: in May, September and January, on the deadlines provided by the national government
according to the last digit of the Tax Identification Number.
Extension of filing
deadline
Not applicable
Filing mode Paper or electronic
Form Form 300
Payment deadline Same as the filing deadline
Extension of
payment deadline
Not applicable
Amended return Penalty for voluntary amendment of the income tax return that results in an increase in income tax due or
reduction of the refundable balance (the amendment of the tax return must be made within 2 years following the
deadline for filing the tax return and before the tax administration issues an official assessment), as follows:
– 10% of the higher resulting amount due or lower resulting refundable balance if the tax return is amended
before notification from the tax administration; and
– 20% of the higher resulting amount due or lower resulting refundable balance if the tax return is amended
following notification from the tax administration.
If the voluntary amendment of the tax return does not result in an increase in the tax due or a reduction of the
refundable balance, no penalty applies.
Voluntary amendment of the income tax return that results in a reduction of the income tax due or an increase in
the refundable balance (the taxpayer being required to submit a request for amending the tax return to the tax
administration during the year following the deadline for filing the tax return)
Refund of excess
input tax
Excess input tax may be carried forward to the following tax period, or may be refunded or compensated.
Refunds and compensations are only granted for input VAT balances which are generated in zero-rated
transactions, and for excess VAT withholding.
Time limit for tax
assessments
3 years from the date the tax return has to be filed according to the deadlines provided by the national
government
Mitigation of
effect of time limit
for tax
assessments
Not applicable
4. Invoicing
Obligation to issue
invoices
Yes, except for individuals who are subject to the simplified VAT regime and individuals who only sell exempt
goods or provide exempt services to the extent that they do not exceed the thresholds on income and wealth
provided by the law for individuals subject to the simplified VAT regime
Time limit At the time of selling the goods or providing the services
Types of invoices Ordinary invoices and equivalent receipts (in the case of taxpayers not obliged to issue invoices)
Self-billing Not applicable
Format of invoices Paper or electronic
Obligatory content
of invoices
Yes
5. Business records
Type of records Records of taxpayer's assets and liabilities, accounting records, records enabling verification of all receipts and
expenditures, invoices, tax returns filed, official receipts of tax payments made, and supporting documentation
of the tax amounts withheld
Retention period Same time limit for assessments, i.e. 3 years from the date the tax return has to be filed according to the
deadlines provided by the national government, or 6 years if the company has set off losses. Special retention
period applies for commercial and accounting purposes.
Electronic storage Allowed in the case of accounting books and records held in magnetic media format
6. Input tax refund to non-residents
Refund to non-
residents
Only possible if tax returns have been filed and if, for the tax period concerned, the credit balance results from
zero-rated operations or from excess withholding taxes. Specific provisions apply to foreign non-resident
tourists for claiming VAT refunds on purchases made in Colombia.
Competent
authority
National Tax Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN)
Refund procedure Electronic application. Foreign non-resident tourists must file an application form on paper.
Refund application
deadline
2 years from the deadline for filing the VAT return; in the case of foreign non-resident tourists, 6 months from
the date on which the invoice is issued or 3 months if the purchase is made in a special border zone
Refund thresholds 100 TVUs
Reciprocity
principle
Applicable to VAT refunds to diplomats
7. Other matters
Other indirect tax
filing obligations
Taxpayers for consumption tax purposes are obliged to comply with specific obligations.
Indirect tax
representative
Foreign companies are obliged to fulfil their administrative VAT obligations if they carry on taxable activities
frequently. If so, they must set up a branch in Colombia which must comply with all administrative obligations.
D. Dispute resolution
1. Objections
Competent
authority
Tax authority issuing official assessment
Time limit for
objections
3 months after receiving notification of official assessment (requerimiento especial)
Suspension of tax
payment
Yes
2. Appeals
Competent
authority (first
instance)
Tax Court or Administrative Tribunal, depending on the amount disputed
Time limit for
appeal
Within 10 days following the date on which the first instance ruling is communicated to the taxpayer
Competent
authority (second
and higher
instances)
Council of State
E. Advance rulings
Availability Yes, but only on transfer pricing matters
Binding force Binding on tax authority and taxpayer
Competent
authority
National Tax Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN)
Appeal No
Fee Not applicable
Validity period Up to 3 tax years
Public disclosure No
F. Interest and penalties
Failure to register Penalty for failure to register in the National Tax Registry (Registro Único Tributario, RUT) before initiating
business activities: closing of the commercial establishment or office during 1 day per month of delay or 1 TVU
per day of delay in the case of taxpayers without a fixed place of business
Omission or late
payment of taxes
Late payment: maximum effective rate certified by the Financial Supervisor of Colombia less 2 points (as from
tax year 2017):
– 29.44% (4th quarter 2017);
– 30.97% (3rd quarter 2017);
– 31.50% (2nd quarter 2017); and
– 31.51%(1st quarter 2017)
Omission or late
filing of returns
Late payment: maximum effective rate certified by the Financial Supervisor of Colombia less 2 points (as from
tax year 2017):
– 29.44% (4th quarter 2017);
– 30.97% (3rd quarter 2017);
– 31.50% (2nd quarter 2017); and
– 31.51% (1st quarter 2017)
Penalties:
(a) for omission: highest of 20% of:
– amount of deposits in bank accounts;
– gross income determined; and
– gross income per previous tax return;
(b) for late filing:
– 5% (maximum 100% of tax due); and
– 10% (maximum 200% of tax due) after notification from tax administration.
Inaccurate or
frivolous filing of
returns
Late payment: maximum effective rate certified by the Financial Supervisor of Colombia less 2 points (as from
tax year 2017):
– 29.44% (4th quarter 2017);
– 30.97% (3rd quarter 2017);
– 31.50% (2nd quarter 2017); and
– 31.51%(1st quarter 2017)
Penalties:
(a) for self-correction:
– 10% of the higher resulting amount due or lower resulting refundable balance if the tax return is amended
before notification from the tax administration; and
– 20% of the higher resulting amount payable or lower resulting refundable balance if the tax return is amended
following notification from the tax administration;
(b) for inaccuracies (administrative corrections):
– 100% of the inaccuracy;
– 200% of the inaccuracy in cases of undisclosed assets or inexistent liabilities;
– 160% of the inaccuracy in cases of purchases or expenses derived from transactions with inexistent or
insolvent providers or in cases of tax abuse;
– reduced by specific amounts depending on the stage of the tax proceedings (the taxpayer renounces the right
to object and pays tax assessed).
Refusal to provide
information and
similar
obstructionists
behaviour
Penalty of a maximum of 15,000 TVUs, subject to the following conditions:
– up to 5% of amounts related to non-disclosed information;
– up to 4% of amounts related to erroneous information;
– up to 3% of amounts related to extemporaneous information;
– up to 0.5% of net income if it is impossible to determine the base or specify the amount in the information to
be provided; and
– up to 0.5% of the gross net worth of the previous tax year or reported in the previous tax return if there was no
income.
The penalty is reduced to:
– 50% (for an omission rectified before the penalty is imposed);
– 70% (for an omission rectified within 2 months of the penalty being imposed); and
– 20% (for an omission rectified before the tax authority issues an official list of charges.
Tax fraud Failure to report assets, or providing inaccurate information on assets in the income tax return, or reporting non-
existent liabilities exceeding an amount of 7.250 monthly minimum legal wages, will be subject to
imprisonment between 48 and 108 months and a fine of 20% of the value of the non-reported assets, assets
incorrectly reported or non-existent liabilities.
Failure to keep
records
Penalty for failure to properly keep accounting books and records: 0.5% of the higher of the net wealth and net
income reported in the previous tax year up to 20,000 TVUs
Erroneous refund
or credit claims
Penalty for obtaining an erroneous refund or compensation:
– 10% of the amount reimbursed if the taxpayer voluntarily amends the credit balance;
– 20% of the amount reimbursed if the tax authority rejects or modifies the credit balance; and
– 100% of the amount reimbursed if the supporting documentation for requesting the tax refund was false.
Statute of
limitations
5 years
Executive liability No
G. Disclosure
Voluntary
disclosure
Taxpayers may include unreported assets or non-existent liabilities in their net taxable base and assess the
corresponding income tax due.
Colombian tax residents are required to file the foreign assets return in respect of foreign assets owned at 1
January of each year.
Tax amnesty During tax years 2015, 2016 and 2017, taxpayers who were willing to report unreported assets and non-existent
liabilities could apply for a regularization tax ancillary to the net wealth tax.
H. Other matters
Taxpayer
identification
number
Legal entities usually have a 9 digit identification number plus a verification digit (e.g. 800.324.111-1). The Tax
Identification Number for individuals is the national ID number plus a verification digit.
Last Reviewed: 30 April 2018
Effective Date: 1 January 2018
Editor: IBFD
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About Baker Tilly International
Baker Tilly International is one of the world’s leading networks of independently owned and managed accountant and business
advisory firms united by a commitment to provide exceptional client service.
Every day, 33,600 people in 147 locations share experiences and expertise to help privately held businesses and public interest
entities meet challenges and proactively respond to opportunities. International capability and global consistency of service are
central to the way we work.
Global Office
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United Kingdom
T: +44 (0)20 3882 2000
www.bakertilly.global
