VAT Measures

COLOMBIA TAX MEASURES TAKEN ON COVID-19 UPDATED BY MARCH 25TH, 2020.

Date: 25/03/2020

Version: 1.0 THE POWER OF BEING UNDERSTOOD

AUDIT | TAX | CONSULTING

Colombian Tax Measures on COVID-19 The public statement made by the World Health Organization about COVID-19 and the Emergency state declared by the Colombian Government and its president Ivan Duque Corredor, have aroused in the issuance of several regulatory Decrees and Administrative Acts of National and Territorial matter with the end of attending the crisis. In relation to tax matters, most of the recent developments have been in relation to the change of filling dates and mostly the provided exemptions are in VAT matters. We resume the most important changes as follows:

TAX RETURNS AND OTHERS

The income tax, VAT, consumption tax and withholding tax returns are enabled to be filed through banks and other authorized entities in physic1.

The national gas tax, the financial transaction tax and the annual return of foreign assets, transfer pricing, foreign exchange substitution, carbon, wealth and normalization tax returns will remain to be filed electronically2.

The taxpayers of the special tax regime (NGO’s, foundations) will be able to update the information of register by June 30th, 20203.

TAXES

1.

Income Tax - Filing and Payment Due Dates a) Decree No. 401 of March 13, 2020:

cultural, theatrical and live activities will be able to pay their taxes in the following dates: Income Tax Return Date Extensions Second payment: Until 07-312020.

Third payment: Until 08-21-2020.

Corporations First payment: Until 07-31-2020. /Entities Second payment: Until 08-212020.

Taxpayers Large Taxpayers

Financial entities defined as large taxpayers will pay 50% of income tax’s surcharge between April 14th, and April 27th, according to taxpayer’s ID. The remaining 50% will due between June 9th and June 24th, 2020. b) Decree No. 435 of March 20, 2020: Through Decree No. 435, the Colombian Government established the new due dates for the filing and payment of the income tax return for large taxpayers and corporations: Income Tax Return Taxpayers Date Extensions Large Taxpayers Second Payment: Between April 21st and May 5th Corporations/Entities First Payment: Between April 21st and May 19th

2.

Through this Decree it is established the new dates for the filing of Income Tax and VAT of the directly affected corporations.

The corporations dedicated to air transportation, hotels and hospitality industry and the taxpayer whose principal activity are 1 2

Decree No. 401, 2020. Article 1.

Decree No. 401, 2020. Article 1.

Public Works per Taxes - Special Tax Regime

Taxpayers linked to this special regime will be able to file the income tax return and first payment until May 29th, 2020.

3

Decree No. 438 of March 19, 2020.

3.

Simplified Tax Regime - Special Tax Regime

The dates for filling the corresponding by monthly returns will be set according to the last number of the Tax Register ID, as follows: Return January- February March- April May-June July-August SeptemberOctober NovemberDecember

4.

Payment Dates From May 5th to May 18th From June 9th to June 24th From July 7th to July 21st From September 8th to September 21st From November 10th to November 24th From January 13th, 2021 to January 26th, 2021.

Wealth Tax

6.

Foreign Assets Return The obligation to file the foreign assets return will be enforceable when assets exceed the value of $71.214.000 by January 1st, 20205.

Foreign Assets Return Taxpayers Date Extensions Large Taxpayers April 21st to May 4th, 2020 Corporations

7.

Payment Dates Between May 12th, 2020 to May 26th, 2020 Second payment Between September 28th, 2020 to October 9th, 2020

5.

Wealth Tax Surcharge (Normalization Tax)

The obligation to file the wealth tax surcharge will still due by September 25th.

However, individuals may choose the alternative calendar provided the taxpayers is on time for filling the return4.

4

Decree No. 401, 2020. Article 5.

Magnetic Media

Through Resolution No. 000027 of March 25th, 2020, The Colombian Tax Authority changed the terms for filling of magnetic media returns, as follows:

The term to file the wealth tax was set between September 28th, and October 9th, according to the last digit of the Taxpayer’s ID. The payment of the tax is due in two equal (50%) payments:

First payment

April 21st to May 19th, 2020

Foreign Assets Return Taxpayers Date Extensions Large Taxpayers May 15th to May 29th, 2020 Corporations

8.

June 1st to July 1st, 2020

VAT - Filing and Payment Due Dates and Exemptions a) Decree No. 401 of March 13, 2020:

Through this Decree it was declared a new date for the filling and payment of VAT returns for specific taxpayers: Foreign Assets Return Taxpayers Date Extensions

5

Decree No. 401, 2020. Article 5.

VAT responsibles dedicated to air transportation, hotels and hospitality industry and the taxpayer whose principal activity are cultural, theatrical and live activities VAT responsibles dedicated to the sale of prepared foods, sale of foods, travel agents and touristic operators

Bimonthly return (March- April): June 30th, 2020

Through this Decree, the Colombian Government provided a VAT exemption on the importation and sale of healthcare and health system products, among others: • • • • • • • •

Bimonthly and quarterly return: June 30th, 2020

b) Decree No. 497 of March 13, 2020: Through this Decree, The Ministry of Commerce, Industry and Tourism extended the time for the payment for the fiscal contribution for tourism to September 29th, 2020. c) Decree No. 410 of March 16, 2020: Through this Decree, The Ministry of Commerce, Industry and Tourism established a customs duty of cero (0%) on the importation of healthcare goods and healthcare supply. d) Decree No. 419 of March 18, 2020:

Nebulizer Baby Scales Vital Signs Monitor Electrocardiograph Glucometer Blood Pressure Monitor Defibrillators Incubators

The exempted goods/equipment will give the right for VAT responsible to ask the refund and offsetting of the balances in favor and discountable. Billing requirements include to establish the Decree under which the VAT is considered as exempted.

9.

Consumption Tax

The national consumption taxpayers that dedicate to the sale of prepared foods, sale of foods and others will be allowed to pay the bimonthly return corresponding March-April until June 30th, 2020.

10. Industry and Commerce Tax

Through this Decree the purpose of the government was to accelerate the process of implementation for the VAT refund to vulnerable population. For this purpose, beneficiaries of the exemption are the ones called by special beneficiary social programs.

Through Decree No. 461 of 2020, territorial entities could re-destine the specific destination contributions to COVID-19 mitigation and prevention efforts as well as to reduce tax rates and change dates for filing territorial returns.

e) Decree No. 438 of March 19, 2020:

SUSPENSION OF ADMINISTRATIVE AND JUDICIAL TERMS

Suspension of the term of process and administrative actions in tax, customs and foreign exchange matters between March 24th and April 3rd.

Suspension of the term of administrative disciplinary actions filed between March 18th until March 31st, 2020.

All Judicial terms where suspend between March 24th and April 3rd, 2020.

In case you have any further questions in relation to tax compliance, please free to contact our partners of the tax team: Sergio Viveros Partner | Tax & Legal RSM Colombia |T: +57 (1) 7034060 | C: +57 320 4915013 | E: sergio.viveros@rsmco.co SaĂşl GarzĂłn Rivera Partner| Tax & Legal RSM Colombia T: +57 (1) 7034060 | C: +57 3138705893| E: saul.garzon@rsmco.co |

The situation around COVID-19 is developing and changing every hour. Please find the most up-to-date information in our coronavirus-section in our website.