Obligation to renew registration of technology import contracts eliminated

By Ruling 23344 of November 28, 2019, the fourth section of the Council of State declared the nullity of article 12 of Resolution 000062 of 2014 issued by the Dian, through which the obligation to renew the registration of contracts for the import of technology of undetermined amount was provided.

Such pronouncement is of special importance, considering that in accordance with the provisions of the second paragraph of Article 123 of the Tax Statute -ET- and Article 1.2.1.18.17 of Decree 1625 of 2016, for purposes of the deductibility of the expense incurred in technology import contracts, it is an indispensable requirement that the registration process be carried out before the tax administration.

According to the plaintiffs, the challenged rule violated the right to equality and the principles contained in Decree Law 0019 of 2012 (Anti-Procedure Decree), since the obligation to renew the registration turns out to be an unnecessary and superfluous procedure that conditions the tax eligibility of the expense.

In the ruling, the judicial corporation made a chronological account of the rules that have regulated the registration process for the importation of technology, noting that prior to Resolution 000062 of 2014, the competence for this purpose rested with the Ministry of Commerce, Industry and Tourism, entity that through Circular 027 of July 13, 2009 indicated the parameters to advance the registration.

Regarding the contracts for the import of technology of undetermined amount, paragraph 5.5 of the Circular provided that the registration of this type of business was granted for a period of one (1) year from the date of registration before the single window of foreign trade -Vuce-, which could be automatically extended, for which the special registration procedure indicated therein had to be exhausted.

In accordance with the above, in the case of technology import contracts of undetermined amount, the registration was granted for a term that did not necessarily coincide with the term of the registered contract, while the maximum term corresponded to one (1) year, extendable in accordance with the aforementioned; unlike what happened with contracts with determined amounts, for which the registration coincided with the term of the contract.

Resolution 000062 of 2014 modified this treatment, stating that in all cases the registration will be valid from the date on which the contract was registered until the end date of its term or until the date of voluntary termination made by the interested party (see article 8 of Resolution 000062 of 2014), eliminating the reference to extensions or differential treatments associated with the determination or indetermination of the amount. According to the new rule, it will only be necessary to exhaust a new registration when there are modifications or additions to the technology import contract.

Notwithstanding the unification of the registration term, Article 12 of Resolution 000062 of 2014 provided that the technology import contracts that have been registered in the Vuce: (i) will maintain the term indicated in the corresponding registration; and (ii) when the term of the registration expires, a new one must be requested according to the new procedure.

In summary, despite the change of regime, the obligation of a new registration for technology import contracts of undetermined amount previously registered before the Vuce was maintained.

Now, with respect to numeral 5.5 of Circular 027 of 2009, the fourth section of the Council of State, by Ruling 22877 of October 30, 2019, declared the partial nullity, arguing that the superior rules (Decision 291 of 1991 of the Commission of the Cartagena Agreement and Decree 259 of 1992) did not provide for the extension for any type of contracts.

Following that line, in Ruling 23344 of November 28, 2019, the High Court declared the nullity of the second paragraph of Article 12 of Resolution 000062 of 2014, stating that:

"(...) the requirement of a new registration (...) is not contemplated in the superior norms (D.L 187/75, D. 291/91 CAN and D. 259/92), thus disregarding the right to equality and Articles 1° and 6° of Decree Law 19 of 2012, which precisely seek to eliminate unnecessary formalities to ensure the effectiveness of the rights of individuals before the authorities and facilitate access to the services provided by public entities".

The ruling is of material importance as it clarifies that the contracts for the import of technology of undetermined amount registered before the Vuce, were not subject to renewal or new procedure before the Dian to maintain the registration and ensure the deductibility of the expense incurred abroad for this type of concepts; so it will be a reference for the resolution of those lawsuits that are still in progress, in which the legality of the acts of the Dian that rejected items for this concept is debated.