UGPP Update: Presumption of costs and termination by mutual agreement scheme

1. Obligation or duty of the UGPP to apply the cost presumption scheme.

Considering that Article 139 of Law 2010 of 2019 states that the UGPP "may apply the scheme of presumption of costs", the entity pointed out that this corresponds to a power granted by the regulation and not an obligation in charge of such entity, a power that is applicable in three (3) scenarios: (i) ongoing auditing processes; (ii) auditing processes that begin after the entry into force of Law 2010 of 2019; and, (iii) completed auditing processes, that is, those in which the final administrative act is final and, therefore, its modification is only possible through direct revocation.

In this sense, when the self-employed worker considers that the scheme of presumption of costs is applicable and cannot prove the existence of costs and expenses higher than those estimated in such scheme, it is advisable to request the UGPP to apply it and not wait for the entity to exercise such power ex officio.

2. Extension of terms to resolve reconsideration and direct revocation appeals.

In this regard, the UGPP was asked from what moment the extension of the terms available to the entity to resolve the appeals for reconsideration and the requests for direct revocation that were in progress at the time of the entry into force of Law 2010 of 2019 should be counted. In this regard, the UGPP clarified that these deadlines were extended from the date of publication of the Law in question, that is, from December 27, 2019.

It should be recalled that Articles 180 of Law 1607 of 2012 and 738-1 of the Tax Statute grant one (1) year to the Tax Administration to resolve the appeal for reconsideration and the request for direct revocation as from its filing in due form by the contributor.

3. Termination by mutual agreement in direct revocation cases.

By means of Decree 690 of May 22, 2020, the National Government corrected the error present in the third paragraph of article 139 of Law 2010 of 2019, by means of which the second paragraph of article 244 of Law 1955 of 2019 was added, clarifying that the decisions resulting from the application of the presumption of costs scheme would be applicable to the termination by mutual agreement.

Thus, and regarding its application in cases in which the direct revocation is about to be resolved, the UGPP stated that "the contributors who see their IBC modified as a result of the application of the presumption of costs scheme, by way of direct revocation, may avail themselves of the termination by mutual agreement" indicated in article 119 of Law 2010 of 2019, until December 31, 2020.

Consequently, in order to access this benefit, the following must be taken into account:

That the independent worker is applicable to the scheme of presumption of costs in accordance with the provisions of article 1 of Resolution 209 of 2020.

That before December 31, 2020, the UGPP has resolved the direct revocation and on the application of the scheme of presumption of costs, the modification of the IBC of the contributor has been ordered. In this regard, it is important to remember that the terms to resolve the direct revocation action have been suspended since April 1, 2020 (Resolution 385 of 2020).

That the contributor submits before December 31, 2020 the request for termination by mutual agreement and accredits the payment of the amounts owed.

4. Conclusions

The cost presumption scheme is a fundamental tool for self-employed workers and those with contracts other than the provision of services whose activity involves subcontracting and/or purchase of inputs and expenses, since it not only allows them to dispense with the need to prove their costs and expenses, based on Article 107 of the E.T., but also gives them the possibility of extending the deadline to resort to the benefit of termination by mutual agreement, in the course of the control processes carried out by the UGPP, including for requests for direct revocation