We share our Tax Bulletin No. 19 from January 2020, with the latest decisions and opinions released by the Council of State 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 us.
1.1. On December 27th of 2019, the Ministry of Finance and Public Credit issued Decree 2371 of 2019, which regulates the tax burden of dividends, as well as the withholding tax applicable to the distribution of dividends to national and foreign companies.
1.2. On October 27th of 2019, the Ministry of Finance and Public Credit issued Decree 2373 of 2019, by means of which is established the percentage in which it can be adjusted the tax basis of the fixed assets for fiscal year 2019.
1.3. By means of Decree 2410 of December 30th, 2019, the National Planning Department pointed out the rate of increase of the property valuation for fiscal year 2020.
1.4. By Resolution 00173 of January 10th of 2020, the Tax Authority of Bogotá indicated the legal entities obliged to file exogenous information for fiscal year 2019. In addition, the aforementioned Resolution sets forth the dates for the filing of this information before the Tax Authority of Bogotá.
2.1. Tax Ruling No. 30051 issued by Colombian Tax Authority on December 5th, 2019
- The Colombian Tax Authority explained, trough Tax Ruling No. 30051 of December 5th, 2019, the procedure taxpayers of the normalization tax must follow in case they do not fulfil the requirements set forth in Law 1943 of 2018. According to the Tax Authority, the assets subject to the normalization tax must be repatriated to the country with long-term prospect; therefore, if these requirements are not met, taxpayers can not benefit from the reduced tax base (50%) of the normalization tax.
2.2. Tax ruling No. 29687 issued by Colombian Tax Authority on December 2nd, 2019
- In terms of Tax Ruling No. 29687, legal entities that render hotel services are exempted from the payment of parafiscal contributions if the met the requirements set forth in Law 788 of 2002. However, it is important to highlight that, new entities that perform the aforementioned activities are obliged to pay parafiscal contributions in Colombia, given that their income is taxed at 9% rate.
3. Case law of the Council of State
In the case law of October 16, 2019 (File 22566), the Council of State indicated that the benefit granted to taxpayers through tax stability contracts is only limited to agreed invested value, and not over the whole economic activity.
4. Projects of Decrees and Resolutions
Given the declaration of the unconstitutionality of Law 1943 of 2018, on October 7th, 2019, Colombian Government has been working on the projects of Decree that aim to regulate the dispositions that were introduced by Law 2010 of 2019 (Tax Reform). As a result of this work, to this day, the Colombian Government and the Tax Authority (DIAN) have already a draft of Decree of the topics mentioned below, that can be consulted in the web page of the Ministry of Finance and Public Credit and DIAN:
- Simple tax regime;
- Withholding tax rates for labour income;
- Requirements for the issuance of the electronic invoice.