Colombia introduced Value Added Tax (Impuesto Sobre Las Ventas (IVA)) in 1983. It is administered by the Dirección de Impuestos y Aduanas Nacionales (DIAN).
Should you register for Colombian VAT?
Businesses providing taxable supplies of goods or services in Columbia may have to contact the tax authorities and register for VAT. There are a number of situations for this obligation to be triggered. They include:
- Supply of movable and immovable goods
- Sale of intangibles related to industrial property
- Provision of services from within Columbia or into the country from abroad
- Imports of goods
- Income on gambling and other games of chance
- Provision of digital services
Colombian VAT registration procedure
A VAT registration is made to the Registro Único Tributario” (RUT) via Form 1. The business must supply the following documents in support of the application:
- Certificate of incorporation of the business
- Proof of ID of the applicant directors
- Bank account details and certificate
Failure to register may result in penalties. A registered business will be provided with a Taxpayer Identifiaction Number (“Número de Identi cación Tributaria” – NIT. There is no scope for voluntary VAT registration. Deregisteration must be applied for within 30 days of stopping taxable supplies, and should be supported by the certificate of a public auditor.
Colombian VAT registration threshold
The Colombian VAT registration threshold is Peso 110 million for the simplified VAT regime. This is available to businesses of limited size, and without imports or exports. This is for resident businesses, and non-residents with a local permanent establishment.
Non-resident traders operating in Colombia
It is not possible for foreign businesses to register for indirect taxes in Colombia as a non-resident. It is necessary for foreign traders to form a permanent establishment in order to register for indirect taxes in Colombia.