Decrees and provisions issued by the Colombian Government
In recent weeks, the National Government has issued different policies of interest for the entire business sector.
To begin, Decree 963 of July 7, 2020 regulated VAT and Income Tax returns and/or compensations in favor of taxpayers.
The conditions to access these compensations consist of the following:
That they do not pose a high risk in accordance with the risk analysis system of the Special Administrative Unit of the National Directorate of Tax and Customs (DIAN, as per its Spanish acronym).
Also, that they bear 25% of costs or expenses and/or sales taxes - VAT deductible, as applicable, through the previously validated electronic billing system; without prejudice to the fact that taxpayers can bear higher costs or expenses and/or sales taxes - VAT deductible, with a previously validated electronic invoice. This condition applies to return and/or compensation applications filed between June 22 and December 31, 2020 that are processed by the automatic return procedure.
The Unified National Registry of Payment Order Operators (RUNEOL) was similarly regulated by means of Decree 1008 of July 14, 2020, establishing the procedure for registering with RUNEOL and entering information concerning purchase and sale transactions, and, in general, any legal transfer business, as well as encumbrances of credit-related patrimonial rights derived from payment order operations carried out by entities not supervised by the Financial Superintendence of Colombia. The decree also defines the protection measures for buyers of credit-related patrimonial rights derived from payment order operations to entities not supervised by the Financial Superintendence of Colombia.
On the other hand, Decree 1011 of July 14, 2020 determined that the investments made by micro, small, and medium-sized companies in Research, Technological Development, and Innovation projects, in accordance with the terms and conditions defined by the National Council of Tax Benefits for Science, Technology, and Innovation (CNBT, as per its Spanish acronym) will be able to access a 50% tax credit of the investment made and certified by CNBT, applicable for the compensation of national taxes. The tax credit established herein will not generate a returnable credit balance, with the exceptions of Paragraphs 3 and 4 of this Article.
A similar approach will apply to the remuneration for employing personnel with PhD degrees in MSMEs, provided that the terms and conditions defined by CNBT for that purpose are met, and their employment is associated with R&D+i activities.
It is important to note that the projects presented and classified under the tax credit modality will not qualify for the deduction and discount defined in Articles 158-1 and 256, respectively, of the Tax Statute, and that the certificate for this tax credit will be an administrative act issued by CNBT through the Technical Secretariat under the Ministry of Science, Technology, and Innovation.
Another decree worth noting is No. 1012 of July 14, 2020 concerning Virtual Auction matters, understood as the hearing for the forced sale of goods, using a technological tool, within the administrative coercive collection process carried out by DIAN, once the property appraisal is final, in accordance with the provisions set forth in the Tax Statute and the General Procedural Code.
Decree 1013 established deductions for contributions to the education of employees, as specified below:
- Payments made by legal entities that pay income tax and complementary taxes in the interest of its employees or their family members, intended for educational program scholarships covering the total or partial amount of the program; as well as the amounts paid for forgivable student loans.
• Payments intended for healthcare, stimulation, comprehensive development, and/or early education programs or centers for employees’ children under the age of seven (7).
• Contributions to primary and secondary educational institutions recognized by Colombia’s Ministry of National Education and to technical, technological, and higher education institutions that meet the requirements established by Colombia’s Ministry of National Education.
In parallelwith Decree 1014 of July 14, 2020, Articles 118, 119, and 120 of Law 2010 of 2019, as well as Legislative Decree 688 of 2020 were also regulated, by incorporating conciliation and legal defense committees of DIAN’s Special Administrative Unit (UAE, as per its Spanish acronym), the conciliation of contentious administrative proceedings, and the termination by mutual agreement of administrative, tax, customs, and exchange processes.
Decree 1016 was also regulated on July 14,amending the Single Regulatory Decree of the Foreign Affairs Administrative Sector:
• Safe passage: This is the temporary document issued by the Special Administrative Unit of the Colombian Office of Immigration to foreigners who require it; this document will be regulated by this Unit. (State the circumstances).
• Safe passage for permanence: This safe passage will be valid for up to 180 calendar days, extendable for equal periods, while the application for refugee recognition is resolved.
Finally, Decree 1054 of July 19, 2020, establishing the following:
• Income deferral of funds whose shares are traded on the stock exchange.
• Income deferral of funds whose shares are not traded on the stock exchange.
• Funds whose main purpose is tax deferral.
• Obligations and joint liability of the private capital fund or collective investment withholding agent.
• Taxation for natural persons not residing in Colombia and for foreign companies and entities.
• Occasional income and earnings attributable to permanent establishments and branches.
• Income taxable as dividends or profit shares.
Legal measures for the tourism sector
In addition to the aforementioned regulations, two decrees designed for the tourism industry are also worth noting.
Decree 981 of July 7, 2020 deferred the payment of Parafiscal Contributions for the Promotion of Tourism, within the framework of the health emergency declared by the Ministry of Health and Social Protection. The taxpayers of the parafiscal contribution for the promotion of tourism may present and pay the private settlements of the first, second, and third quarter of 2020 until December 30, 2020.
Decree 1053 of July 19, 2020 regulates guided tours and the implementation thereof: duties of the Tourist Guide, obligations and rights of the Tourist Guide, requirements to obtain the professional licence, and enrollment in the National Tourism Registry for Tourist Guides.
Legal Measures for the Chemicals and Life Sciences sector
In response to the COVID-19 health emergency, the National Food and Drug Surveillance Institute (INVIMA, as per its Spanish acronym), through the Specialized Medicines Chamber, declared the medicines most widely used in critical services as vital non-available drugs, in order to increase their supply and guarantee adequate healthcare for patients suffering from complications associated with this disease.
Consequently, Resolution 385 of 2020, amended by Resolution 844 of 2020, determined that a health registration is not required for the import of these drugs, but it simply needs to fulfill the requirements provided in the Article 6 of Resolution 522 of March 28, 2020.
The documents to be attached in the case of Vital Non-Available Medicines for COVID-19 are:
- Drug name
- Name of the active ingredient
- Concentration of the active ingredient
- Pharmaceutical form
- Indications and/or therapeutic use
- Batch Number
- Expiration date (of the batch)
- Manufacturer's laboratory name and address
- Country of origin
- Product presentation
The following documentation must also be attached to the application:
- Payment receipt at the current rates (Secure Online Payment applicable per product)
- Certificate of Free Sale (CVL, by its Spanish acronym) from the country of origin, equivalent document, or certification issued by the WHO or by the corresponding health entity.
- A letter signed by the importer’s legal representative indicating the relationship with the entities where the medicines are to be sent.
- Label design of the medicine to be imported. The foregoing, in order to verify compliance with Article 6 of Resolution 522 of 2020 (Section 4), which states as follows: “The labels, signs, and packaging of the medicines shall be accepted as established in the country of origin, provided that the information concerning the active ingredient, concentration, pharmaceutical form, and route of administration is available in Spanish.”