Another tax effect regarding to the IFRS (accounting) implementation, which implies paying more taxes, is the fiscal adoption of accrual for delivery of Goods and Services when the customer hasn´t yet received the invoice.
If a good or a service is delivered, but the customer does not receive an invoice from, for example, December 20, it will have to accrue into the income and recognize the taxes of income, VAT, withholdings and Municipal taxes (ICA)
In Colombia the accrual method has always been used (Decree 2649 – 1993 Article 97) and it has always been legally stated that the taxes and withholdings are generated by the delivery of the goods or services or by the delivery of the invoice, whichever occurs first. However, traditionally, the taxes have been usually declared when the customer receives the invoice.
In practice, who provides the service must issue the invoice in December to support with it the taxes such as VAT (Article 429 ET) and prepare the invoice in January when the customer receives it, with the date of issue of December of the prior year.
This has been regulated in other countries and allows the customer to deduct the cost/expense in the same period in which the seller recognized the revenue.
The customer makes a “revenue estimation” and deductible expenses are taken as a post-closing adjustment, whenever the invoice is received prior to filing financial statements and before reporting the revenue (in addition, the exogenous information coincides with the year, for purposes of fiscal information to be match)
However many customers do not want to complicate and will only receive the invoice in January with the date of January of the period following the purchase. If so, they must not evidence the delivery of the merchandise or service, otherwise the exogenous information (Magnetic Media) wouldn’t be match.
The key is to eliminate the differences between the accounting revenue and declared revenue for income tax report, because this involves the risk of tax reviews and penalties, since it is assumed that, if they accrued, they should also be included in the Income tax and VAT declarations (forms).
Source: Cartilla Práctica- Actualícese