By Decree 1422 of 2019, the Ministry of Finance and Public Credit, known as DIAN in Colombia, regulates the automatic refund of balances as determined by income and sales tax (VAT) tax returns. DIAN has enacted the respective administrative act to issue automatic refunds to tax payers.

To whom is the new automatic refunds decree applicable to?

The decree will apply to any taxpayers and those responsible for income tax, complementary tax and sales tax (VAT) that meet the following conditions:

  1. Must not represent a high risk according to the risk analysis system of the Special Administrative Unit of the National Taxes and Customs Directorate. .
  2. More than eighty-five percent (85%) of the costs or expenses and/or discountable sales taxes, as applicable, come from suppliers that issue their invoices through the pre-validated electronic invoicing system.
  3. Prove compliance per the requirements set forth in Decree 1625 of 2016, Sole Regulation in Tax Matters for the presentation of the refund request. If the request does not comply with the requirements established in these articles, the provisions of article 857 of the Tax Statute shall apply for inadmissibility or rejection, as applicable.

What is the delivery time-frame for the automatic return?

DIAN must issue the automatic refund within ten (10) working days following the filing date of the application.

Refund requests that do not meet the established requirements shall continue with the ordinary process.