DIAN clarifies the requirements in order to apply the General Sanctions Graduation Clause

Reduction of penalties by 50% or 75% is subject to the compliance of the requirements of article 640 of the Colombian Tax Code


 In its Revenue Ruling No. 5981 of March 17th 2017, the Colombian Tax Authority – DIAN- confirmed the requirements established by article 640 of the Colombian Tax Code to apply the reduction of penalties.

In the first place, it clarified that there are two (2) concurrent requirements that must be met in order for the taxpayer to obtain a reduction of the 50% in the penalty for late payments: (i) That within two years prior to the date of the commission of the punishable conduct, this conduct has not been committed; and (ii) that DIAN has not issued a statement of objections, a special request or a prior notice for not filing the return.

In the second place, it confirmed that the possibility of reducing sanctions is applicable to the entire sanctioning regime, with exception of the sanctions included in paragraphs 2, 3 and 4 of article 640 of the Colombian Tax Code.

In the third place, it established that, if the sanction is not voluntarily proposed by the taxpayer but the administration is the one that settles it, the taxpayer must necessarily accept and pay the sanction in order to be able qualify to its reduction, because if not, the benefit will not be applied.