Exogenous: Penalty for passive evasion of the 2019 GA.

In addition to the tax penalties of Article 651 of the ET, those responsible for the reporting of exogenous information may incur in the penalty for passive evasion of Article 658-2 of the ET.

The principle of favorability set forth in article 640 of the ET is not applicable to this penalty.

Another penalty that a taxpayer obliged to report exogenous information may face is the penalty for passive evasion.

When the taxpayer is obliged to report payments or credits on account made to third parties (form 1001 v. 10), he/she must be very careful with the information reported. 10) he must be very careful not to omit any of them (and much less hide them within a record such as the one made with the pseudo-NIT 222222222 – minor amounts, if in fact it was a payment that should be discriminated individually within the report), because when this happens the Dian could apply the penalty for passive evasion contemplated in Article 658-2 of the ET (created with Law 863 of December 2003), which states the following:

“Article 658-2. Penalty for passive evasion. The persons or entities that make payments to taxpayers and do not relate the corresponding cost or expense in their accounting, or these have not been reported to the tax administration when there is an obligation to do so, or when the latter has required it, shall be sanctioned with a fine equivalent to the value of the theoretical tax that would have generated such payment, provided that the taxpayer beneficiary of the payments has omitted such income in his tax return. Without prejudice to the general competence to apply administrative penalties and criminal actions arising from such facts, the penalty provided for in this article may be proposed, determined and discussed within the same process of imposition of penalty or official determination that is advanced against the taxpayer who did not declare the income. In the latter case, the competent agencies to advance the action against such taxpayer shall be equally competent to decide against the person or entity that made the payment”.

To understand the above, suppose that company A made during 2019 a payment of $200,000,000 for “locative repairs” to company B (income tax payer). However, company A did not include such payment in its report of form 1001, and company B did not include the respective income in its tax return for the taxable year 2019.

If the Dian audits company B and manages to discover that it had received a payment for $200,000,000, and that by omitting such income it reduced its income tax by $66,000,000, it will sanction company A with a fine of $66,000,000 as a penalty for passive evasion, since such company should have reported the payment made to company B in the exogenous information report.

It is necessary to emphasize that the penalty for passive evasion will not be applicable to the principle of favorability referred to in Article 640 of the ET and, therefore, it cannot be reduced.

Source: Actualícese