Tax recovery in Colombia

Q: How does the automatic return work?

Return within 15 days of processing: Taxpayers who do not qualify as high risk will be authorized for offset and/or refund through an abbreviated 15-day procedure. They shall be the days following the date of the timely and duly submitted request for refund. It is not necessary to attach the statement of costs, expenses and deductions: During the Health Emergency period, it is not necessary to attach documents showing costs, expenses and deductions. However, when the country is not in this situation, taxpayers who so request must submit such statement of costs, expenses and deductions within 30 days. Application of the abbreviated procedure: The DIAN maintains its audit powers to review the refunds made and that the same will be exercised after the emergency is lifted.

Tax refund management in Colombia

Through the filing of tax returns, companies that generate credit balances in their tax returns are entitled to the taxpayers are entitled to recover taxes in Colombia and may request the tax credit balances that may be generated. Such amounts generally represent large sums and if they are not requested within the time established by law, the tax refund will not be made in Colombia, so that the money will not be recovered.

In UR Global we handle the management of tax refunds for companies in Colombia, our extensive experience in business management and subsidiaries in Latin America, endorse us.

Refund of DIAN balances

The National Government of Colombia established the simplified procedure for the tax refund The Company will be liable for Income and Complementary Taxes and VAT, through the National Tax and Customs Directorate (DIAN) by means of Decree 535 of April 10, 2020, during the Sanitary Emergency caused by the coronavirus.

When the taxpayer complies with the requirements, each Sectional Directorate will respond within 15 days of the request. Decree 535 states that while the country remains in a state of emergency, it will not be necessary to attach the list of costs, expenses and deductions in order to carry out the procedure. However, when the emergency ends, these documents will have to be submitted within 30 days.

Who will benefit from the refund of DIAN balances?

Pursuant to Article 850 of the Tax Statute, the contributors or responsible for the liquidation of credit balances in their tax returns in Colombia may request the refund from the National Tax and Customs Directorate (DIAN) and, in accordance with Article 854 of the Tax Statute, may only claim the respective amounts within a term not to exceed two years. In other words, they will be entitled to claim tax recovery in Colombia.

How does UR Global help to recover taxes?

At UR Global, we have experts with extensive experience in the sector and in Latin American countries and in this case, in Colombia. These perform an arduous task that entails that in a maximum period of 50 working days, the respective forms and legal documents must be processed to support them, as well as to meet the requirements of the DIAN and their respective follow-up in order to be able to get that tax refund in Colombia.

Why UR for tax recovery in Colombia?

We have the local experience of almost 10 years managing the returns of different companies, allowing us to alleviate the cash flows of our customers;

In Colombia we manage more than 70 subsidiaries of Spanish companies and annually we have many transfers from other firms. When reviewing the accounting and taxes we receive, we help companies in the tax refund management before the DIAN, and thanks to our commitment and knowledge, we have achieved very satisfactory results for our clients.

Frequently asked questions about tax refunds in Colombia

How will the balance refund process be streamlined?

In the case of companies, the recovery of taxes in Colombia in their favor will be carried out with a detailed review of the information presented and the history of each company, in order to determine whether they are in a high or low risk profile.

In case the company meets the requirements, reflecting a rational economic activity and supporting that the refunds it is requesting are consistent with the refunds it has historically requested, it will proceed with the process.

How does the automatic return work?

Return within 15 days of processing:Taxpayers who do not qualify as high risk will be authorized for offset and/or refund through an abbreviated 15-day procedure. They shall be the days following the date of the timely and duly submitted request for refund.
It is not necessary to attach the statement of costs, expenses and deductions:During the Health Emergency period, it is not necessary to attach documents showing costs, expenses and deductions. However, when the country is not in this situation, taxpayers who so request must submit such statement of costs, expenses and deductions within 30 days.
Application of the abbreviated procedure: The DIAN maintains its audit powers to review the refunds made and that the same will be exercised after the emergency is lifted.

How will VAT be refunded in Colombia?

The Government, through the National Planning Department, has advanced the VAT refund due to the health crisis.

The Government of Colombia advanced the tax refund scheme for taxes such as VAT. This action consists of returning to lower income families resources that will alleviate the impact of the tax levied on the consumption of products and services of the most vulnerable people in the country.