The Colombian tax authority (DIAN) recently published Ruling 1396 of 29 October 2020 concerning the tax return and statutory audit requirements for foreign companies with their place of effective management in Colombia.
The ruling includes that if a company's place of effective management is in Colombia, it is treated as a Colombian company for tax purposes and they are required to submit income tax returns. In this respect, it is noted that paragraph 1 of section 6 of Article 596 of the Taxation Statute provides that if a taxpayer is subject to statutory tax audit requirements in accordance with the Commercial Code and relevant regulations in force, then the income tax return must be signed by the auditor. Statutory auditing is generally required for companies with assets higher than 5,000 minimum legal wages or gross income higher than 3,000 minimum legal wages. Otherwise, the return must be signed by an accountant if assets at the end of the year or gross income for the year exceeds UVT 100,000, in accordance with paragraph 2 of section 6 of Article 596. As such, the ruling provides that if a non-resident company with its place of effective management in Colombia does not meet the conditions of paragraph 1, then they are not subject to the statutory auditing requirement and are required to comply with the provisions of paragraph 2, i.e., the return must be signed by an accountant if assets/income exceed UVT 100,000.