AG 2020 income tax return: non-resident individuals

Non-resident individuals who obtained gross income in Colombia in 2020 in excess of 1,400 UVT (on which no withholdings were made) are obliged to file a virtual tax return on form 110.

In accordance with the provisions of article 592 of the Tax Statute -ET- and article 1.6.1.13.2.7 of DUT 1625 of 2016 (after being amended with Decree 1680 of December 17, 2020), the only non-resident individuals (and non-resident illiquid successions) who would be obliged to declare income under the ordinary regime for the taxable year 2020 to the Colombian Government (using for this purpose the form 110 prescribed with Dian Resolution 000032 of April 9, 2021) would be those to whom any of the following two (2) conditions apply:

“natural persons and/or illiquid successions that during 2020 obtained in Colombia gross income for all concepts higher than 1,400 UVT.”

a. These are individuals and/or illiquid successions that during 2020 obtained in Colombia gross income for all concepts higher than 1,400 UVT ($49,850,000), and on this income no withholdings at source were made.

b. These are individuals and/or unliquidated successions that during 2020 obtained in Colombia gross income for all concepts higher than 1,400 UVT ($49,850,000), and on this income they did have withholdings at the source, but such withholdings were not those of articles 407 to 409 of the ET. This is the case, for example, of a non-resident individual who has sold a real estate property in Colombia and to whom the notary has only made the withholding of Article 398 of the ET.

Note: these taxpayers can never opt for the simple regime, since this is only available for resident individuals and national companies that meet all the requirements of articles 905 and 906 of the ET.

Therefore, if they did not obtain income in Colombia (or the income they obtained was below 1,400 UVT), they would not be obliged to declare income to the Colombian Government. They are not obliged to declare even for the simple fact of having large gross assets in Colombia.

Consequently, when these individuals and/or illiquid successions are not obliged to file a tax return with the Colombian Government, they will not be allowed to do so voluntarily either (the latter is only allowed to resident individuals; see articles 6 and 594-2 of the ET).

Consequently, when they are not obliged to file a tax return, it is clear that the withholdings at the source for income and occasional profit that have been made during the year 2020 would become their income tax for the year before the Colombian Government.

In addition, if during 2020 they rendered services to Colombian public entities and withheld solidarity tax for COVID-19, but at the end of the year they were not obliged to declare, they will be able, as of July 1, 2021, to request a refund of such money with the “excess payment” procedure.

Additionally, in case they were obliged to file the income tax return for the previous taxable year (in this case, for the taxable year 2019), and in such return they have settled an “advance payment of income tax for the taxable year 2020”, since they are not obliged to file income tax returns for the taxable year 2020, they will have to request the Dian to refund them the value of such advance payment through the “excess payment” procedure.

Non-resident individuals and non-resident illiquid successions that are obliged to file income tax returns with the Colombian Government must do so only virtually, which implies first being registered in the RUT (with liability 05) and having previously obtained, or renewed, the electronic signature issued by the Dian (the expirations will be between August 10 and October 20, 2021; see article 1.6.1.1.13.2.15 of DUT 1625 of 2016, after being modified with Decree 1680 of December 2020).(Note: you can study our editorial of April 27, 2021 with the 28 novelties to be taken into account for the 2020 taxable year income tax return of natural persons. Remember that these and other novelties will be analyzed by Dr. Guevara in his virtual book Guía para preparar y presentar declaraciones de renta y régimen simple de personas naturales por el año gravable 2020, with its formats 2516 and 2517, which will be available from May 22, 2021, and will include access to 7 hours of online conference and multiple downloadable and editable Excel files; in addition, the first buyers will be able to send questions to be selected and resolved in three virtual consultations, each of three hours, to be held on Saturdays July 12 and 26 and July 10, 2021).

Additional obligation to answer for the estate tax of 2021

Articles 43 to 49 of Law 2010 of 2019 modified several articles from 292-2 to 298-8 of the ET, establishing a new wealth tax to be filed for the years 2020 and 2021.

The new tax, which is declared virtually in form 420 and having previously reported liability 03 in the RUT, falls, among others, on individuals and non-resident illiquid successions that have had liquid assets in Colombia (assets minus liabilities) as of January 1, 2020 equal to or greater than $5,000,000,000 (regardless of whether or not they are income tax filers before the Colombian Government, as long as they are not carrying out in Colombia the mega-investments of article 235-3 of the ET). The tax for the year 2021 must be declared between May 10 and 24, 2021.

To obtain the taxable base of the 2021 tax, the Muisca will be directly in charge of making the special calculations of article 295-2 of the ET, in which the taxable base declared in 2020 plus the inflation of the year 2021 must be taken into account The amount to be paid (if higher than 41 UVT) will be canceled in up to two equal installments.

Source: Actualize