Abbreviated procedure for the refund and/or offsetting of credit balances

Under the extraordinary powers granted by the Constitution and the Law to the President of the Republic, on the State of Economic, Social and Ecological Emergency, Legislative Decree No. 535 of April 10, 2020, was issued by which an abbreviated procedure was established to process the refund/compensation of balances in favor of the Income Tax and Sales Tax.

From the regulation we highlight the following points:

a. It is intended to alleviate the case of those taxpayers who file the request for refund and/or compensation with the full requirements under an exceptional procedure that may be advanced during the term of the Sanitary Emergency (which extends until May 30, 2020, according to Resolution No. 385 of the Ministry of Health and Social Protection) or its extensions.

b. The request for refund and/or compensation shall be resolved within 15 days, decreasing 35 days with respect to that contemplated in Article 855 of the Tax Statute (ET) -50 days-.

At this point, it is noteworthy that Decree No. 1422 of August 2019 had provided for the automatic refund of balances in favor in the term of 10 business days. It should be recalled that currently the decree is not in force as it suffered decay derived from the unenforceability of Law 1943 of 2018 declared by the Court.

c. For taxpayers qualified as high risk in tax matters, the competent Sectional Directorate shall within 15 days following the filing of the request:

(i) Suspend the process until the State of Emergency remains in force, for those cases in which it is feasible to identify a risk of tax fraud and/or specific risk vis-à-vis the request; or.

ii) Authorize the refund/compensation, informing about the case to the competent control area to initiate the subsequent control once the State of Emergency is over.

d. The "list of costs, expenses and deductions" must be sent to the DIAN up to 30 days after the end of the State of Sanitary Emergency without the need for any requirement by the Entity, under penalty of generating the penalty referred to in Article 651 of the ET (penalties for not sending information, sending with errors or out of time).

e. Those files of taxpayers who are under audit process prior to the request for refund and/or compensation of credit balances, must be sent again to the refund area to follow the abbreviated procedure.

f. The refund and/or compensation requests that are being processed through the abbreviated procedure at the time of termination of the Sanitary Emergency, shall be finalized with this procedure.

Thus, the general formal requirements must be complied with, except for attaching the "list of costs, expenses and deductions", with which special precaution must be taken, to avoid the so frequent inadmissibility acts issued by the Entity, with respect to matters that could be easily corrected online without the need to reach the inadmissibility.