DIAN issues first general VAT revenue ruling since the enactment of Law 1819 of 2016

The new 19% VAT rate is in force since January 1st of 2017, with certain exceptions


Regarding the new provisions included in Law 1819 of 2016 in connection with the Value Added Tax (VAT), in its Revenue Ruling No. 1419 of 2017, the Colombian Tax Authority –DIAN- explains that the general VAT rate of 19% is in force since January 1st of 2017, except for the following cases, described in Law 1819 of 2016:

  • The direct sale to the public of pre-marked merchandise, directly or stored in shelves (article 198 of Law 1819 of 2016);
  • Contracts entered into with public entities before the entry into force of Law 1819 of 2016 (article 192 of Law 1819 of 2016);
  • Construction and auditing contracts derived from the concession of transport infrastructure signed with public or state entities (article 193 of Law 1819 of 2016);
  • Sales of encumbered goods in which the invoice or the delivery took place before January 1st of 2017.

Those taxpayers to which this transitional regime applies, who sell and invoice goods and services at the rate of 16% for the month of January, must compute a single tax return (bimonthly or quarterly), regardless of whether they apply the two tax rates in the return (16% and 19%).

Similarly, the revenue ruling establishes that taxpayers of the simplified VAT regime are not subject to VAT withholding from taxpayers of the common regime, when the latter sell goods and services; even if they have been declared as large taxpayers.

With regards to those taxpayers that have filed VAT returns in different periods to the corresponding one, they can file those returns before April 29th, 2017.

Finally, it is important to take into account VAT taxpayers may credit VAT incurred in the acquisition of petroleum products, when the goods acquired meet two conditions (i) have the nature of cost or expense, and (ii) are intended for the use in operations, whether taxed or exempt.