Regulatory Decrees

In accordance with the amendments made by Law 2155 of 2021, the Ministry of Finance issued Decree 1843 of 2021, which states:

- Since January 1st, 2022, legal entities that want to apply to “economía naranja” projects must be incorporated and start the development of its activities before June 30th, 2022.

- Taxpayers that since January 1st, 2022 want to apply for “economía naranja” exempt income must submit a request for the qualification of the investment project to the Committee of the Ministry of Culture, containing:

• Identification of the company.
• Authorization for the entity to verify the company's Registro Único Empresarial (RUES).
• Fill out on the Ministry of Culture's platform the information related to the feasibility, suitability of the project and the commitment to directly hire employees.
• Economical activity of the company.
• Tax ID (RUT) copy.
• Certification issued by the public accountant or statutory auditor indicating the gross income for the previous fiscal year to the date of submission of the application.
• Copy of the income tax return and complementary taxes for the fiscal year prior to the date of application.

- The administrative act that accepts or deny the application to the regime will be issued by the Minister of Culture, within 30 working days following the presentation of the project with the requirements fulfilled, after that “economía naranja” committee has given its opinion.

- By fiscal year 2021 the application may be filed until December 31st, 2021, and for 2022 the application may be filed until June 30th, 2022.

- Requests for the qualification of investment projects submitted since January 1st, 2022, will apply the benefit of exempt income for five years, since the day following the date on which the administrative act becomes final, and only if the company started its activities before June 30th, 2022.

- Projects qualification requests submitted after January 1st, 2022, must be submitted according to the new procedure, and start their economic activities before June 30th, 2022. If the application was submitted before December 31st, 2021, the procedure prior to the modification must be followed, and the company must start its economic activities before December 31st, 2021.

- The requirement of a certain amount of investment only will apply to legal entities that before December 31st, 2021 have filed an application before Ministry of Culture.

Cost adjustment of fixed assets

Through Decree 1846 of 2021, Ministry of Finance established the increase in the cost and equity value of fixed assets that taxpayers may adjust by fiscal year 2021 in their income tax returns as follows:

- The readjustment referred in Section 70 of the Colombia Tax Code(CTC) was established at 1.93%.

- Likewise, the multiplier for updating the tax cost of real estate, contributions, or shares in companies that may be taken by individuals as equity value in the income tax return by fiscal year 2021 was updated, according to the year of acquisition of the assets.

- The adjustment includes the taxable year 1955 and prior years, up to 2020.

Complementary regulation of “régimen simple de tributación”

In accordance with the amendments made by Law 2155 of 2021, the Ministry of Finance issued Decree 1847 of 2021, which states:

- To access “régimen simple”, taxpayers must obtain gross income lower than 100,000 UVT (COP $3,800,400,000 by fiscal year 2022).
- Municipalities and districts must submit annually to Colombian Tax Authority (DIAN), the information of industry and trade tax, notices and boards and the firefighter surcharge taxpayers whose gross annual income is lower than 100.000 UVT.

- The information that municipalities or districts report for year 2020 will correspond to the persons that in the taxable period have obtained gross income, ordinary or extraordinary, lower than 80.000 UVT.

- For taxpayers who choose to join “régimen simple”, is necessary to update the Tax ID (RUT), registering the corresponding code, until the last business day of February of the taxable year.

- The taxpayers who register for the first time at RUT and who wants to join “régimen simple”, must include the corresponding code established by DIAN at the time of registration.

- Those who start activities in the taxable year after the last business day of February, may opt for the simple regime at the time of registration at RUT.