The tax measures announced by the Government during the extension of the ongoing COVID-19 sanitary emergency include new amendments to tax filing and payment due dates regarding income tax, consumption tax, and local taxes (real estate tax, industry, and commerce tax) and some VAT exemptions. Additionally, some benefits to pay taxes before DIAN were included.  

1. Income Tax

For micro, small, and medium-sized companies, the deadline for paying the second installment of 2019 income tax return was extended, beginning on November 9th and ending December 7th, 2020, depending on the last two digits of the NIT, not including the verification digit. For further information, click here.  Decree No. 655 of May 13th, 2020 issued by the Ministry of Finance.

According to Decree 766 dated May 29th, 2020, the advance payment for 2020 income tax return was reduced to 25% and 0% for the following activities: 

For taxpayers who carry out activities that are not listed above, the advance payment must be determined following the regular provisions as per article 807 of theTax Code.

Starting April 15th, 2020, entities that enter into a reorganization process or execute a reorganization plan will be not subject to income tax withholding or self- withholding through December 31st, 2020. Also, the VAT withholding was reduced by 50% until December 31st, 2020. For access to Decree No. 560 of April 15th, 2020 issued by the Ministry of Finance on insolvency proceedings, read here.

2. Exogenous Information

For Large Taxpayers, the deadlines for filing the exogenous information are extended from May 15th to May 29th to June 16th to July 1st, 2020, depending on the last digit of the NIT, not including the verification digit. 

For entities and individuals, the deadlines are modified from between June 1st and July 1st to between June 16st  and July 1st, according to the last two digits of the NIT, not including the verification digit.

For more information about the deadlines, see Resolution No. 00053 of May 28th, 2020 issued by National Tax Authority (DIAN) here.   

3. Nonprofit Entities

The due date for the submission of information to continue under the Special Tax Regime has been extended until June 30th, 2020.

Mandatory yearly meeting of the Board of Directors of nonprofit entities can be held through June 30th, 2020.

During the state of emergency, withdrawals made by non-profit organizations of Special Tax Regimen from their Colombia bank accounts are exempt from financial transactions tax. The entities shall meet some requirements to qualify for this exemption. For a full list of requirements, click here.  Decree No. 530 Abril 18th, 2020 issued by National Tax Authority (DIAN).

4. Value Added Tax

The Government announced that on June 19th, July 3rd and 19th, 2020, the consumers will be exempt from paying VAT on some products which value does not exceed certain amounts. This applies to textile products, household appliances, toys, school supplies, sports equipment, computer, and telephone equipment, agricultural supplies.

The payments on commercial real estate lease billing from May 22nd to July 31st, 2020 are not subject to VAT meeting the following requirements:

1. Lease on commercial premises or spaces;
2. The commercial premises or spaces should have been open to the public prior to the sanitary emergency;
3. The activities carried out depend primarily on the fact that clients visit the premise; and
4. The commercial premises and spaces have been forced to close for at least two weeks as a result of the sanitary emergency.

This treatment does not apply to offices and warehouses.

For full details on VAT exemptions, read Decree No. 682 of May 21st, 2020 issued by the Ministry of Finance here. 

5. Consumption Tax

The rate of consumption tax on restaurant services will be reduced to 0% through December 31st, 2020.

6. Local Taxes – Bogota

*The due date applicable to the installment method is June 30th, 2020.

Industry and Commerce Tax

The new payment deadline of bimonthly May- June, July-August, September –October, and November- December is October 16th, November 20th, December 18th, and February 12th, 2021, respectively.

Administrative procedures were suspended between May 31st  and July 1st , 2020, inclusive.

7. Solidarity Tax

The Government created a new “solidarity tax” for public officers, individuals hired by the Colombian government, and retirees who earn at least COP $10 million per month (approximately USD $2.500). The Solidary tax has a progressive rate between 15% and 20% and will apply  from May 1st, 2020 to July 31st, 2020.

8. Tax controversies

According to article 3° of Decree 688 of 2020, the deadlines for the termination by mutual agreements of administrative procedures, judicial-administrative conciliation, and tax favorability are adjusted, including that the request may be submitted until November 30th, 2020. The minutes that resolve the request must be signed no later than December 31st, 2020. Read the Decree No. 688 of May 22nd, 2020 issued by the Ministry of Finance here.

9. Payment of tax obligations

Regarding income tax and VAT, taxpayers to file their tax returns during the period between April 1st and July 1st, 2020 without payment, may request payment agreements through August 6th, 2020. The Colombian Tax Authority will have fifteen (15) days following the request to resolve it. Payment agreements may not exceed a term of twelve (12) months following the execution of the agreement not being necessary to have a guarantee.

For payment of tax obligations made between May 22nd and November 30th, 2020, and payment agreements signed as of May 22nd, 2020, default interest established in article 635 of Tax Code will be the regular bank interest rate for consumer and ordinary credits certified by the Superintendence of Finance.

For companies engaged in hotel services, air travel services, theater performances and live show business activities, the default interest on payment of tax obligations between May 22nd and November 30th, 2020 or payment agreements signed as of May 22nd, 2020 will be 50% off regular bank interest rate for consumer and ordinary credits certified by the Superintendence of Finance.  

For more information about those benefits, check out Decree No. 688 of May 22nd, 2020 issued by the Ministry of Finance here.