Tax Reform 2014 (the Law). The Law has 77 articles modifying significantly the Colombian Tax Code and among others, brings the following:
- The Law creates an extraordinary equity tax (net-wealth tax) for years 2015 to 2018. The tax is levied on net-wealth owned in January 1st 2015, exceeding COP $ 1,000 million (Approx. US$425.000).
- The taxable base of the equity tax is the gross value of assets, minus debts in January first.
- Equity tax excludes: shares, housing (Max 345 Million – Approx. US$ 146.000); and, some items specifically mentioned (on net-wealth value).
- For corporations, the equity tax is levied for the years 2015, 2016 and 2017. The tax-rate is diminishing, marginal and ranges from 0.05% to 1.15%.
- For individuals, the equity tax is from 2015 to 2018. The tax-rate is marginal and ranges from 0.125% to 1.50%.
- The Law maintains the tax-rate of the Income Tax for Equity -CREE, at 9%.
- The Law, for the years 2015-2018, creates an additional tax called “surcharge CREE”, with annual tax-rates ranging from 5% to 9%, over COP$ 800 million (Approx. US$340.000) yearly income.
- Foreign corporations and organizations will be subject to new income tax-rates as follows:
- The Law creates a new tax called “Normalization Tributaria” (tax-amnesty) by normalizing omitted assets or nonexistent liabilities. It is for years 2015, 2016 and 2017. The tax-rate is 10%, 11.5% and 13%.
- The Law allows the overdue registration before the Central Bank; and, without exchange penalties, of the financial investments subject to the normalizing-tax; and, under certain conditions.
- The Law since 2015, creates the annual statement of foreign assets held abroad, by Colombian taxpayers. By jurisdiction, or individualized, according to conditions set for this purposes.
- The Law extends the GMF-Tax on Financial Transactions (known as 4×1000), until 2018. The tax-rate from 2019 will be reduced annually, to 1% in 2021.
- Since 2019, the law restricts the tax recognition of payments in cash, under certain conditions.
- The Law empowers the Tax and Customs Authority (DIAN), to perform “conciliaciones” conciliations in processes at administrative court, in tax, customs and foreign exchange matters, even for joint debtors and guarantors; and, under specific terms and conditions.
- The Law empowers the DIAN, to end by mutual agreement, administrative processes of investigations or sanctions, in tax, customs and foreign exchange matters, under specific terms and conditions.
- The Law allows taxpayers, on national taxes, customs and the foreign exchange regime, to appear voluntarily before DIAN, to “transar” (conciliate) penalties, interest and updates, due to the correction or submission of private statements (tax filings,) under specific terms and conditions.
- The Law provides, under certain conditions, the reduction on interest payments and penalties, for the full payment of overdue obligations, for the years 2012 and earlier.
- The Law provides the termination of criminal prosecution, due to payment, on tax-criminal cases, related to VAT or withholding-tax, for the years 2012 and earlier.
- For taxpayers with investments in fixed assets abroad, the Law provides that the exchange-rate differences are only recognized higher income or expense, at the time of the sale or liquidation of the investment.
- The Law provides, that corporations can deduct from the income tax, two points of the VAT paid, in the acquisition or importation of capital goods.
- The Law provides that taxpayers belonging to the basic industries sectors (Oil & Gas, mining, heavy chemicals, etc.), could deduct from income tax, the VAT paid on the acquisition or importation of heavy machinery.
We are waiting for regulations to the Law, which will inform them. However, in special concerns, please do not hesitate to contact us.