With the focus on the world after COVID-19 and the recovery of activity at all levels, the Colombian Government has implemented a series of updates with the aim of preparing the country in the economic, tax and labour fields to overcome the impact of the pandemic. The following is a brief summary of the latest measures:
Tax matters updates
- Chemical raw materials for the production of certain medicines are excluded from the VAT tax until August 31, 2020.
- Excluding VAT tax until December 31, 2020, for the sale of food and beverages prepared in restaurants, cafes, self-services, ice cream parlors, greengrocers, patisseries and bakeries, for consumption on site, to be carried by the buyer or delivered at home, developed through franchise contracts.
- Imports of public transport and cargo vehicles will be considered exempt from VAT, subject to certain conditions.Until December 31, VAT, hotel and tourism services are excluded of VAT.
- Reduction to 25% of the advance of the 2020 Income Tax for taxpayers dedicated to oil, mining, textiles, manufacturers of metallurgical products, manufacture of computer, electronic and optical products, manufacture of motor vehicles, furniture manufacturing, installation, maintenance and repair of machinery and equipment, construction of buildings and civil engineering works, commerce, maintenance and repair of motor vehicles, cinematographic activities, video and production of television programs, organization of conventions and commercial events, among others.
- Reduction to 0% of the advance of Income Tax for 2020 for taxpayers dedicated to passenger air transport, accommodation, food and beverage services, travel agencies, tour operators, creative, artistic and entertainment activities, library activities, archives, museums, gambling and betting, sports and recreational activities, among others.
- The National Consumption Tax Rate for food and beverages is reduced to 0% for bars, restaurants, taverns and discotheques.
- Starting from May 21, 2020 and until July 31, 2020, are excluded from sales tax VAT, the monthly rental fees of commercial establishments as long as certain requirements are met.
Payroll matters updates
The Formal Employment Support Program (PAEF) is created, through which the government will finance up to 40% of the legal minimum wage for the payroll of employees, subject to certain conditions, such as a decrease in income for the twenty percent (20%), this benefit will be in force, at least initially until the month of August. This program is extended, with certain conditions to the payment of the annual premium.
Through these developments, the Colombian country is responding firmly to the situation caused by COVID-19 and meeting the world’s challenges in the wake of the pandemic. At Auxadi we are experts in providing value added services in accounting, tax compliance and international payroll management. If you need more information, please contact us.
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Country Manager Colombia
All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.