2020 withholding, INC and VAT returns requiring accountant’s signature

Those obliged to keep accounting records, when they comply with the net worth or gross income ceilings established by law, must file their VAT, withholding tax and INC returns signed by a public accountant.

Articles 512-6, 602 and 606 of the Tax Statute -ET- establish the cases in which the INC, VAT and withholding tax returns, respectively, to be filed during the current year 2020, will require at least the signature of an accountant.

According to such rules, if the taxpayer that must file any of these three returns is not required to appoint a statutory auditor, but is an individual taxpayer, estate or legal entity that is required to keep accounts (at least for tax purposes; see the special case of the producers of agricultural exempt goods of article 477 of the ET), in that case its INC, VAT and withholding tax returns for the whole year 2020 will require the signature of a public accountant, when any of the following requirements are met:

1.their tax gross equity as of December 31, 2019 was greater than 100,000 UVT (100,000 x 34,270 = $3,427,000,000). It is because of this reference criterion that it becomes very important to have defined the gross assets for the year 2019 in an early manner, because if this ceiling was met, then, the first return that would be signed by an accountant would be the withholding tax return for the month of January 2020.

2.Your gross tax income for 2019 (before subtracting sales returns or untaxed income), considering both those that form ordinary income and those that form occasional gains, were higher than 100,000 UVT ($3,427,000,000).

3.When none of the above two requirements are met, but the VAT return for the respective two-month period, four-month period or year shows a balance in favor.

In this regard, it should be borne in mind that the annual VAT returns for the year 2020 will only apply for those taxpayers that are under the simple regime created with Article 66 of Law 1943 of 2018 and ratified with Article 74 of Law 2010 of 2019.

In connection with the above, it is important to note that form 325, for bimonthly VAT returns of service providers from abroad, does not include any box for signature of accountant or tax auditor. Therefore, it is understood that none of the three aforementioned requirements would apply to the filing of form 325 and, consequently, such form may always be filed without the signature of the accountant or tax auditor.

Effects of a return filed without an accountant’s signature

According to literal d) of Article 580 of the ET, if any tax return is filed without the mandatory signature of a public accountant it will be considered as not filed.

“For that to happen it will be necessary that the Dian detects the omission of the accountant’s signature within the period of firmness of the return.”

In any case, for that to happen it will be necessary that the Dian detects the omission of the accountant’s signature within the period of firmness of the declaration. If the Dian does not make a decision within such period, then the return will be considered as validly filed.

The above is supported by doctrines such as those contained in Concepts 052996 of June 6, 2000, 038451 of June 18, 2003 and the last paragraph of Circular 000066 of July 2008. In all of them the Dian has reached conclusions such as the following:

“Consequently, if the return incurs in any of the grounds to consider it as not filed, the Administration must issue the corresponding declaratory order within the ordinary term of finality contemplated in article 714 or in the seventh paragraph of article 147 of the Tax Statute; if after said term the Administration does not issue a declaratory order, the return becomes final”.

How to correct a return filed without signature?

In order to correct the defect of the absence of the accountant’s signature, the return would have to be re-filed, liquidating the reduced penalty referred to in paragraph 2 of article 588 of the ET.

When the taxpayer files an initial return without the signature of the accountant and decides to re-file it before the Dian obliges him to do so, he must pay the penalty for untimeliness that arises from the due date until the day of the new filing of the return.

Such penalty may be reduced by applying the instruction contained in paragraph 2 of Article 588 of the ET, which reads as follows:

“The inconsistencies referred to in paragraphs a), b) and d) of article 580, 650-1 and 650-2 of the Tax Statute provided that no penalty for failure to file has been notified, may be corrected through the procedure provided in this article, settling a penalty equivalent to 2% of the penalty referred to in article 641 of the Tax Statute, without exceeding 1,300 UVT”.

According to this rule, the taxpayer would calculate all the penalty for untimeliness that corresponds to it, but then reduce it to 2%, taking care that the final value does not exceed 1,300 UVT.

Furthermore, after calculating this first reduction of your penalty, you may also apply additionally the reduction of article 640 of the ET, with which you may take the previously calculated value and reduce it to 50% or 75%. In any case, the final value to be liquidated for untimeliness penalty could not be below 10 UVT (value of the minimum penalty).

Source: Actualícese