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SELF-DIAGNOSIS FOR CLOUD COMPUTING SERVICE TO BE VAT EXEMPTED

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SELF-DIAGNOSIS FOR CLOUD COMPUTING SERVICE TO BE VAT EXEMPTED

VAT

The Tax Authority established the requirements for cloud computing services to be VAT exempted and the self-diagnosis that providers must perform

 

With the aim of promoting creative and computer industries, the recent tax reform included cloud computing services as VAT exempted.

By means of Revenue Ruling No. 583 of 2018, Colombian Tax authority specified the content of the self-diagnosis that the providers must perform so that cloud computing service is VAT exempted. In the diagnosis, the provider must evaluate and verify that the service:

  1. Complies with the following characteristics: (i) it is a self-service on demand; (ii) provides broad access to the network; (iii) has a common resource allocation; (iv) is of rapid elasticity; and (v) is a measurable service.
  2. It is provided under one of the following models: (i) software as a service (SaaS); (ii) platform as a service (PaaS); (iii) infrastructure as a service (IaaS).
  3. Corresponds to one of the following implementation models: (i) private cloud; (ii) community cloud; (iii) public cloud; and (iv) hybrid cloud.
  4. In case of an audit by the Tax Administration, the self-diagnosis constitutes proof to demonstrate that the services was VAT exempted.