colombia-e-invoicing
Summary

Standard VAT rate: 19%
E-Invoicing: live
Real-time reporting: mandatory
Digital service tax: no

Compliance and rates

VAT number format

Colombian VAT number contains 9 digits and 1 check digit (i.e. 012345678-A).

VAT rates

The standard VAT rate in Colombia is 19%, with a reduced rate of 5% and some services that are exempt from Colombian VAT such as existential foodstuffs.

19% (Standard) – applies to all taxable supplies with certain exceptions

5% (Reduced) – Corn for industrial use and other grains, vegetal material, waste or residues, some agricultural equipment, electric or hybrid vehicles destined for diverse uses, etc.

0% (Zero) – Meat, dairy products, equipment and materials for the construction, installation, assembly, and operation of environmental monitoring and control systems, services and manufactured goods to be exported

VAT payments and returns

All businesses with Colombian VAT number (domestic established companies) must submit periodic payments. VAT filings and payments, as well as returns, are submitted every two months or quarterly, depending on the previous year’s earnings.

VAT Payment frequency

VAT due must be paid every 2 months or quarterly, depending on the previous year’s earnings. If earnings are higher than 3 million pesos per year, VAT due must be paid every 2 months, otherwise it can be paid on quarterly basis.

VAT Returns frequency

For non-established companies in Colombia (foreign business entities), VAT returns must be submitted every 2 months.

Penalties in case of late filings or misdeclarations

In case of the late filing of VAT returns and payments, the Colombian government prescribed the 5% penalty of the value of the VAT due.

Invoice requirements

In accordance with Art. 617. of Colombian law, requirements of the sales invoices are as follows:

  • to be expressed as a sales invoice
  • surname and name or reason and NIT of the seller or who provides the service (NIT = tax number)
  • surname and name or business name and NIT of the purchaser of the goods or services, together with the discrimination of VAT paid
  • a unique, sequential number
  • date of issuance
  • specific or generic description of the items sold or services provided
  • the total value of the transaction
  • the name or business name and the NIT of the invoice printer
  • indicate the quality of the retainer of the sales tax
  • declared Inexequible Constitutional Court

E-Invoicing

All taxable persons (business entities established in Colombia obligated to pay VAT) have to use the obligatory e-invoicing system platform to send and receive invoices from 2019. Also, this means that all information will be reported in real-time to Colombian Tax Authorities (Dirección de Impuestos y Aduanas Nacionales – DIAN).

There are a couple of requirements that need to be met in order to operate fully complied with Colombian Tax Law:

  • The electronic invoice must be sent to the customer within 48 hours of registered sale
  • The electronic invoice must be sent to Colombian Tax Authorities (DIAN) within 48 hours of registered sale
  • An electronic signature that verifiers the authenticity of the issued invoice can be provided by a certified provider or the company itself
  • Companies must use the XML protocol UBL 2.1 to submit invoices for validation

Real-time reporting

According to the new invoicing model, Colombian Tax Authorities (DIAN) must validate an invoice before a supplier sends it to a customer. All e-invoices must be in the XML (UBL 2.1) format. All invoices are validated in real-time by Colombian Tax Authorities. Without confirmation of the sale from DIAN, the seller cannot charge the buyer for the goods or services sold. 

How does it work?

  1. Generation and transmission – Sending the electronic invoice in XML format by the seller to the DIAN for validation
  2. Validation – The DIAN through the application response validates the electronic invoice
  3. Delivery – The seller delivers the electronic invoice in XML format to the buyer

Who is affected by this obligation?

Electronic invoices must be submitted for all goods or services sold by taxable persons established in Colombia.

Turnkey invoice compliance.

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