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This will be a new payment to Dian made to undomiciled individuals and entities in Colombia

Dean New taxes are introduced on individuals and entities residing outside Colombia but providing services on national territory. This will be done through the withholding mechanism at source or the submission of income tax returns, and that from January 1, the Significant Economic Presence Tax (PES) will be implemented, the entity reported.

It is worth noting that according to the Tax Code, the “Effective Taxation of Significant Economic Presence” (PES) established by the State Administration of Taxation and Customs does not apply.Targeted at non-resident individuals and entities not domiciled in Colombia who generate income from the sale of goods and/or the provision of services to customers and/or users located in the national territory.

How is PES taxed?

Depending on the entity, this tax will be through a withholding tax mechanism of 10% at source or by filing an income tax return and There are two options for imposing a 3% tax rate on total income earned by Colombia.

The first is to declare and pay income tax and supplementary taxes at the opportunity provided by the national government using the forms prescribed for this purpose. In this case, the taxpayer must choose not to withhold at source (Article 408, paragraph 8, Tax Code) or to withhold at source. The second is tax withheld at source as stipulated in Article 408, Paragraph 8 of the Tax Law.

How to register or update the RUT responsible for PES taxation?

Persons subject to PES tax can request to register or renew their RUT, Provide the documents required by Article 1.6.1.2.11, Section 11. In accordance with Decree No. 1625 of 2016, through channels such as the “PQSR and Complaints” service on the Dian website or virtual appointment scheduling (click this link).

What documents must be submitted?

It is divided into two parts, if you are a natural person you must have a copy of your ID. But for companies and entities, there must be copies of documents proving their existence and a legal representation (in Spanish) that is properly apostille or legalized. If these documents do not contain information on country of tax residence, Tax identification number, main address, postal code, phone number, website and email, these data must be authenticated by the legal representative or attorney-in-fact with a document in Spanish or translated by an official translator and a photocopy of the legal representative’s identity document.

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