Tax bulletin No. 38 – Lexology

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Regulation issued by the National Government concerning tax points 
National (*38*) permitted within the first debate the tax reform invoice or the Social Investment Law. 
On August twenty fourth of 2021, the Ministry of Finance filed the presentation of the tax reform invoice referred to as as Social Investment Law. Regarding the textual content offered on July twentieth of this 12 months, the are not any resounding modifications, nonetheless the next are a number of the modifications that had been launched to this new textual content: 

SIMPLE Tax Regime: it’s contemplated to extend the utmost degree of earnings that an organization can must enter to this regime type 80.000 UVT to 100.000 UVY (roughly $3.600 million pesos). Likewise, it’s proposed to switch the date to learn from the unified tax underneath the SIMPLE Tax Regime, till the final enterprise day of February of the taxable 12 months. 
VAT free days: so that a bigger inhabitants group, particularly decrease-earnings households, can entry to this tax profit, it’s proposed so as to add money as a way of fee. Additionally, it will search to implement the digital bill in all gross sales related to this exemption. Finally, it’s supposed to incorporate inside the items coated by the exemption those who use pure fuel, LPG and photo voltaic power. 
Foreign portfolio capital investments: it’s proposed to not scale back the WHT fee relevant to international portfolio capital investments in public or non-public fastened earnings securities. 

The new tax reform textual content was permitted on August 25 by the financial commissions of the National (*38*). Within the permitted provisions within the first debate, we spotlight the next: the rise within the normal rental fee for authorized entities from 30% to 35% as of 2022, the surcharge of three proportion factors within the normal rental fee for monetary sector, the modifications to the billing system, the official willpower of the earnings tax by way of billing, the discount of fifty% of the tax profit that enables deduction the Turnover Tax from earnings tax for authorized entities, the VAT free days, amongst others. 
With this approval, the subsequent step is the presentation of the tax reform for the second debate within the plenary of the National (*38*). If it’s permitted with none modification, the one lacking factor could be the signature of the President with the intention to introduce this tax reform into the Colombian authorized system as regulation.
Regulation issued by the Central Bank concerning alternate points 
Colombian Central Bank points External Circular D-CIP 83 via which External Circular D-CIN 83 is changed as of September 1st, 2021 
On August 27, the Central Bank points External Circular D-CIP 83 via which External Circular D-CIN 83 is changed in its entirety in relation to Issue 10: “Procedures relevant to international alternate operations” of the International Exchange Manual, with the intention to alter the Colombian alternate regime to the implementation of the primary section of the brand new Exchange Information System. The modified procedures correspond to the registration, substitution and cancellation of investments with out international alternate, and people associated to enterprise reorganizations, capital reorganizations and data inquiries.
The modification launched consists of the next features: 

Creation of the New Exchange Information System- Annex No. 7- for the registration, transmission, consolidation and session of knowledge on operations topic to reporting or registration.  
Adjustment to Chapter No. 7 “International investments and monetary investments and property overseas”. 
New Annex No. 8 on the dates to fill out the registrations, substitutions and cancellations of the international funding. 

If you wish to know the brand new provisions of the alternate regime, click on right here. 
Tax Rulings 
Under the Decision 578 of 2004, ought to a controlling Colombian entity fiscally acknowledge a passive earnings obtained by the managed entity from overseas? 
Through Tax Ruling No. 931 of June twenty eighth of 2021, the Colombian Tax Authority identified that so long as a passive earnings obtained by an entity topic to the Controlled Foreign Company (the “CFC”) Regime just isn’t taxed in Colombia underneath Decision 578 of 2004, the controlling Colombian firm just isn’t obligated to its tax recognition of article 886 of the Colombian Tax Code. The foregoing bearing in mind that: (i) Decision 578 of 2004, being an settlement to keep away from double taxation, prevails over nationwide laws in case of battle and (ii) the Colombian CFC Regime intents to create a world tax transparency routine that requires the popularity of earnings underneath the identical situations wherein the CFC obtained it and doesn’t admit the appliance of the exempt earnings remedy within the willpower of passive earnings.
See right here the entire doc of Tax Rulling No. 931 of 2021. 
Tax Rulings concerning the willpower of VAT taxable interval are revoked by the Colombian Tax Authority.  
By technique of Tax Ruling No. 283 of August third of 2021, the Colombian Tax Authority acknowledged that for functions of the willpower of VAT taxable interval and taking into consideration that the logic that encourage article 600 of the Colombian Tax Code is that the VAT interval might be shorter the upper the earnings obtained, the time period “gross earnings” set forth within the aforementioned article should solely embrace these earnings come up from taxed and/or exempt VAT actions. 
In this sense, the Colombian Tax Authority revokes Tax Rulings No. 018127 of June nineteenth of 2015 and No. 004655 of March fifth of 2020, since in they said that for the needs of the willpower of the VAT taxable interval, it should contemplate as “gross earnings” not solely these arising from taxed or exempt operations but additionally these from excluded and never taxed operations. 
See right here the entire doc of Tax Ruling No. 283 of 2021. 
Case Law of the Constitutional Court and Council of State 
Deduction of curiosity originated in a mortgage to accumulate shares. 
The Council of State by way of Case Law No. 25346 of July twenty ninth of 2021 declared the nullity of Tax Ruling No. 100208221000521 of March fifth of 2019 via which the Colombian Tax Authority identified that the curiosity originated in a credit score to accumulate shares just isn’t a crucial expense and it doesn’t have an informal relationship with the income- producing exercise. 
For the Council of State, the curiosity paid on the event of a mortgage will be deducted from the earnings tax, supplied they adjust to the authorized necessities, which should be confirm in every particular case. In this sense, when the Colombian Tax Authority established a generalized rejection of the expense underneath the argument that it’s not crucial and has no causal relationship with the earnings-producing exercise, it constitutes an infringement of the superior norms and a false motivation for error within the fundamentals of regulation, for the reason that guidelines referring to deduction of bills don’t present for this absolute limitation and, quite the opposite, topic the deduction to the evaluation of the particular case of every taxpayer in accordance with their very own exercise.
Term to inform the particular summon concerning earnings tax returns of taxpayers topic to the switch pricing regime
The Council of State, by way of case regulation No. 24226 of August 5 th, 2021, decides to determine jurisprudence in relation to the time period of notification of the particular summon concerning earnings tax returns of taxpayers topic to the switch pricing regime.
For this motive, the Council of State, establishes as a rule that the time period to inform the particular summon concerning earnings tax returns of taxpayers topic to the switch pricing regime might be six years from the expiration of the submitting date. If the declaration was submitted in an extemporaneous method, the earlier time period might be counted as from the date of the late submitting.
However, you will need to keep in mind that the particular time period of six years was modified by Law 2010, 2019. As of fiscal 12 months 2020, the statute of limitations of earnings tax returns that should adjust to the switch pricing regime is 5 years.
Colombian Tax Authority Resolutions 
Prescription of type 260 for taxpayers of the unified tax underneath the SIMPLE Tax Regime.
Through Resolution 000071 of August 11, 2021, the Colombian Tax Authority ordered the Form No. 260 “Consolidated Annual Declaration” via which the unified tax return was offered underneath the SIMPLE Tax Regime for the 12 months 2020 and / or fraction of the taxable 12 months 2021, with its annexes “Annual declaration annex” and “Gross fairness owned within the nation and overseas.”
In this sense, taxpayers obliged to current the consolidated annual declaration of the unified tax underneath the SIMPLE Tax Regime should achieve this by way of laptop providers, utilizing the Electronic Signature approved by the Special Administrative Unit, Directorate of National Taxes and Customs.
If you wish to see the entire doc of Resolution 000071 of 2021, click on right here. 
Projects of Decrees and Resolutions 
Registration within the National Tax Registry by way of the Chambers of Commerce.
On August twenty fifth of 2021, the Colombian Tax Authority submitted for feedback a draft decision by means od which it’s supposed to control the registration within the National Tax Registry by way of the Chambers of Commerce. It is sought that these obliged to register within the National Tax Registry and within the Mercantile Registry, can adjust to mentioned obligations collectively by way of the Single Business Registry administered by the Chambers of Commerce. 
For the complete content material of the draft decision, click on right here.

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