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What are the current rate(s) of VAT?
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Are there any confirmed or anticipated changes to these rates?
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No.
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What is the principal indirect tax?
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Value Added Tax (VAT) is the principal indirect tax in Colombia. It is a tax on consumer expenditure, and is collected on business transactions and imports.
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Is there a registration limit for the tax?
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Yes. It relates to the annual turnover of taxable transactions in Colombia, and once the limit has (or will be) reached it is necessary to register.
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Does the same registration limit apply to non-established businesses?
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There is no obligation of registration in Colombia.
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Does a non-established person need to appoint a fiscal representative in order to register?
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Does not apply.
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How often do returns have to be submitted?
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Most businesses are required to submit VAT returns covering two months accounting periods. Returns can also be submitted on a quarterly basis.
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Are penalties imposed for the late submission of returns/payment of tax?
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Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed, and moratory interests.
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Are any other declarations required?
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There are not additional declarations required.
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Are penalties imposed in other circumstances?
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Yes, Penalties can be imposed for a range of errors or omissions, like change the tax paid, reduce the balance in favour, among others.
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Can the tax incurred by overseas businesses be claimed if they are not registered in your country?
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It is not possible for businesses that are not registered in Colombia.
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Deduction of Tax
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All the VAT paid in the bought and the rendering of services can be deducted.
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In Colombia, the Value Added Tax is the main indirect tax, which is monitored and controlled by our tax authority, called DIAN.
Although VAT is ultimately borne by the consumer by being included in the price paid, the responsibility for charging, collecting and paying it to the tax authority at each stage of the process rests with the business making the supply, i.e. the sale.
It also applies for the imported goods, and services rendered by non-residents.
The general rate is 19% and is applied in the moment of the billing.
The Colombian regulation in force dispose some benefits for exporting businesses, which have the right to ask for the reimbursement of the credit balance of the VAT in the corresponding declarations.
Depending on the income of the previous year, VAT declarations has to be submitted every two or four months.
Yes, there is, and it depends on the income received in the year.
Applies only for people and local businesses, it does not apply for non-residents businesses.
Some computer devices are VAT excluded, also computation services in the cloud.
It does not apply in Colombia.
Depending on the income of the previous year, VAT declarations has to be submitted every two or four months.
Yes, there are penalties for late submission of the declarations and is calculated based on the tax to pay, if there is not a tax to pay then is over the income and if there is no income, then is calculated over the equity.
In relation to VAT, there are no additional declarations required.
Yes, there are penalties due if the person who submitted the declaration is not indicated, the information filed on the declaration is inaccurate, wrong filling, reduce the balance in favors, or for not updating the information toward the tax authority (DIAN).
It does not apply in Colombia.
A VAT invoice must:
It does not apply in Colombia.
For further information on indirect tax in Colombia please contact:
Ana Cepeda, TP and Tax Partner
T +57 (1) 7059000
José Hernán Flórez Pachón, Tax Partner
T +57 (1) 7059000
