2024-07-22 20:30:09
The income tax filing process is a crucial aspect for taxpayers in Colombia. Every year, individuals must file their income tax returns, which involves a detailed analysis of their income, expenses, and deductions. This article focuses on the particularities of the 2023 tax year and the new developments that taxpayers must take into account.
HUILA DAILY, TAX CONSULTATION
By: José Hilario Araque Cárdenas, tax advisor and consultant.
Juan Diego Araque Durán, lawyer specializing in tax law.
August, September and October are the major season for filing personal income tax returns for the 2023 tax year.
DIAN STATISTICS UNTIL TAX YEAR 2022.
- Between August 9 and October 19 of last year, a total of 5,438,850 natural persons complied with the obligation to file the Income and Complementary Tax return corresponding to the 2022 tax year.
- According to statistics from the Dian, this represented an increase of 25% compared to the 2021 tax year with an increase of 1,086,794 taxpayers.
- The revenue collected was $19.66 trillion, an increase of 30.2% compared to the $15.1 trillion collected in the 2021 tax year.
- The Dian has posted 5,273,072 suggested income tax returns for the 2022 tax year on its platform with the aim of simplifying the filing of the return and the payment of the tax each year.
- 97.4% of natural persons filing tax returns for that year 2022 did the procedure online (virtual declarations), while the remaining 2.6% completed it through lithographic declarations at the offices of banking entities.
- Every year, the Dian has been implementing more accessible, user-friendly and agile mechanisms to facilitate the entire process of filling out, submitting and paying.
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THE INCOME TAX RETURN FOR THE YEAR 2023.
In order to declare the income tax and complementary taxes of resident natural persons and unsettled estates whose deceased was a resident in the country at the time of death, as has been the custom, it is required to have on hand all the necessary information on their assets, liabilities, income, costs and expenses, remembering that for this tax year 2023, as we have been noting in several of our previous writings, these income tax returns must address the new features introduced by the Tax Reform Law 2277 of 2022, which contemplated several changes, such as the following:
- For the first time, certain substantive treatments will be applied to the taxable base and rate of the general tax rate.
- The general tax return is where income from work (employment, fees and provision of personal services), capital income (leases, financial returns) and non-employment income (trade, agriculture, livestock, etc.) are declared.
- The taxable net income of the general tax return will suffer a significant increase in income tax for taxpayers with high monthly income (over $10 million pesos), due to the decrease in tax benefits that until the tax year 2022 were enjoyed in relation to exempt income and imputable deductions.
- For the first time in this tax year 2023, any value that have been certified to the declarant for the concept of dividends and participations for having shares and contributions in companies, will be declared as a higher value of the net income of the general schedule and will cause a higher income tax to be paid, when until the taxable year 2022, up to 300 UVT ($ 11,401,000) do not pay tax as dividends or participations.
- However, some small benefits will also be declared for the first time, such as a special deduction of 72 UVT per year for each economic dependent that the taxpayer has and up to four dependents. And a special deduction of 1% up to $10,179,000, on the value of purchases of goods and services that have been supported by an electronic invoice and whose payment has been made by electronic means.
INFORMATION AND DOCUMENTS AT HAND FOR PREPARING THE INCOME TAX RETURN FOR TAXABLE YEAR 2023.
- Updated copy of the RUT.
- Printed copy of the tax return filed for the year 2022 with its respective annexes or worksheets prepared to understand the values completed in the declaration format.
- Bank certificates with a cut-off date of December 31, 2023 are essential for filing income tax returns.
- Certificates of investments in shares or shares of social interest with the value of the dividends and/or participations paid or credited into the account in 2023.
- Municipal account statement showing the cadastral appraisals for the year 2023 and property taxes paid.
- Electronic invoices for purchases of goods and services for the year 2023 for the purposes of the special deduction to which you are entitled,
- Certificates of income and withholdings for employment payments and other work income, especially fees and compensation for personal services.
- And all other information related to its economic and financial activity carried out in 2023.
- According to Decree 2229 of December 22, 2023 (Deadlines for declaring the year 2024), the deadlines for its expiration in this year 2024 are met between August 12 and October 24, according to the last two digits of the declarant’s NIT.
- Remember the importance of establishing your status as a tax resident in Colombia during 2023, or on the contrary, your status as a NON-resident. To do so, simply read carefully the conditions of article 10 of the Tax Code.
- If you are a tax resident in Colombia, whether you are a national or a foreigner, you declare worldwide income and assets, that is, income and assets held in Colombia and abroad; however, if you determine that you are not a tax resident in Colombia, you only declare income from a national source and assets held in the country.
- Remember, if you determine that you are NOT required to file an income tax return for tax year 20223, even if you were required to file in previous years, do not file any return because it does not produce any legal effect according to article 594-2 of the Tax Code; however, the paragraph of article 6 of this same code establishes that it can be filed voluntarily and produces legal effects in the event that withholdings have been made at source.
- According to Dian Legal Document No. 0031384 of November 18, 2015, it is clearly noted that this paragraph of article 6 of the ET contemplates an exception to the rule enshrined in the first part of this same article, expressly stating that declarations submitted by those not required to submit them have full legal effects and are subject to the same rules for declarations submitted by those required to do so. In this sense, a declaration that shows a balance in favor follows the same fate as one submitted by an obligated party, and, consequently, grants the right to a refund.
CHECK IF YOU HAVE THE ELECTRONIC SIGNATURE INSTRUMENT “IFE”.
- On July 28, 2020, the Dian issued Resolution 000080, through which, modifying Resolution 000070 of 2016, it creates a new “IFE” enabling system based on the self-generation mechanism, eliminating the renewal and revocation steps of the previous system, thus making said instrument more agile.
- The Dian has pointed out that this process has continued to evolve, issuing, for example, Resolution 000139 of September 15, 2023, through which an important partial adjustment was made to the text of Resolution 000070 of November 2016.
- This modification consisted of establishing that the codes or “dynamic keys” that the Dian until now only sent in advance to the email of the person who uses their electronic signature instrument, will be codes that can also be sent as text messages to the cell phone number that said person has decided to keep reported in their respective RUT.
The opinions are the responsibility of the partners of Araque Asociados Tax and Legal Consultants. We base our opinions on the understanding of current regulations and knowledge of tax law, and may not be shared by the tax authorities. Contact us at www.araqueasociados.com Questions and suggestions at the following email: [email protected]. Personalized attention: Carrera 5 No. 14-32 offices 5, 7 and 8 Pasaje de la Quinta de Neiva, Huila, telephones 321 452 3315.
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