Registration of investment outside the legal term of assets

Decree 2245 of 2011 establishes the Penalty Regime and the Exchange Administrative Procedure to be followed by the National Tax and Customs Directorate -DIAN- in cases of violations to the Exchange Regime with respect to operations and obligations under its surveillance and control [1]. Among the violations to the Exchange Regime is the failure to file the exchange declaration within the legal term and the untimely compliance with the obligations of registration, information or report of the information and operations regulated by the Banco de la República, which is punished with a fine of twenty-five (25) tax value units -UVT- for each month or fraction of a month of delay, without exceeding the equivalent of one hundred (100) UVT, for each obligation fulfilled outside the legal term.

Likewise, Decree 2116 of 1992, establishes the functions of competence of the Superintendence of Corporations, among which are the functions of control and surveillance of the compliance with the Exchange Regime "in matters of foreign investment made in Colombia and investment made by Colombian companies abroad, as well as debt operations in foreign currency made by companies domiciled in Colombia", whose infringement entails the imposition of a penalty of up to 200% of the exchange infringement.

Now, the creation of the complementary tax of tax normalization, through Law 1739 of 2014, established an exception to the previously referred rules, with which, the registration outside the legal term of the financial investments and in assets abroad defined in Article 36 of External Resolution No. 8 of 2000 of the Board of Directors of Banco de la República and investments of Colombian capital abroad defined in Article 2.17.2.2.4.1.1.1 of Decree 1068 of 2015, may be processed at any time without thereby generating a foreign exchange violation.

For purposes of the foregoing, the External Regulatory Circular DCIN-83 of February 24, 2011[2] in Chapter 7, numeral 7.5, indicates the procedure for the extemporaneous registration of such obligations, without penalties, which may be carried out at any time.

The above, was ratified by concept 12363 of June 13, 2017 of the Bank of the Republic, in which, special emphasis was made to the fact that the extemporaneous registration on the occasion of the complementary tax of normalization does not constitute exchange infringement in accordance with the provisions of paragraph 1 of Article 39 of Law 1739 of 2014.

This office is ready to provide advice and support on the subject.

[1] Pursuant to article 3 numerals 4 and 5 of Decree 4048 of 2008, the DIAN is responsible for exercising the following functions:

"4. To direct, administer, control and oversee compliance with tax, customs and exchange obligations for the import and export of goods and services, expenses associated therewith, foreign currency financing of imports and exports and under- and over-invoicing of these operations at the national level, in accordance with the policies outlined in the macroeconomic program and the general policies adopted by the Ministry of Finance and Public Credit and within the institutional management model.

To control and oversee the operations derived from the exchange regime that are not under the competence of another entity."

[2] Modified by Bulletin 23 of July 26, 2017, of the Banco de la República.