Income tax return and foreign assets

Between August 9 and October 19, 2018, the deadlines for individuals to file the declaration of assets abroad and income tax return in a timely manner expire. With the tax reform, changes were introduced to the penalties applicable to the first type of return.

The structural tax reform did not make changes on article 607 of the ET, therefore it continues to retain the version that was stipulated with article 43 of Law 1739 of 2014, said norm establishes who are obliged to file the annual declaration of assets abroad and the content of this.

Who must file this declaration?

Both legal entities (companies or entities considered as nationals for tax purposes) as well as individuals and resident unliquidated successions, who are income tax payers and who as of January 1, 2018 have owned assets abroad, must comply with this obligation.

Deadlines to file the declaration of assets abroad.

“the deadlines for individuals who are not large taxpayers will expire between August 9 and October 19, 2018 depending on the last two digits of the taxpayer’s NIT”

According to article 1.6.1.1.13.2.26 of DUT 1625 of 2016, the deadlines for large taxpayers expired between April 10 and April 23, 2018, while those for legal entities culminated between April 10 and May 8, 2018; for their part, the deadlines for individuals who are not large taxpayers will expire between August 9 and October 19, 2018 depending on the last two digits of the taxpayer’s NIT, on these same dates individuals must file their income and complementary tax return; In our Automated Tax Calendar 2018 you can automatically consult the maximum dates set by the national government so that the taxpayer complies with its tax obligations in a timely manner.

You may also be interested in: Individual income tax return: taxable year 2017.

Form 160 can only be filed virtually

The form to file the declaration of assets abroad is form 160, which was prescribed by the Dian through article 2 of Resolution 000002 of January 2018. When comparing its lines with the one prescribed for 2017 through article 5 of Resolution 000013 of March 03, 2017, it can be evidenced that no modifications were made to it, since even the first rule in mention indicates that the form of the previous period was taken.

“form 160 can only be filed through the electronic information services of the Dian and therefore the taxpayer must have his electronic signature instrument”.

It is also valid to remember that the second paragraph of article 2 of Resolution 000002 of 2018 establishes that form 160 can only be filed through the electronic infórmaticos services of the Dian and therefore the taxpayer must count his electronic signature instrument -IFE-. If it is filed by a different means the return will be understood as not filed.

Considering that individuals who do not have the status of large taxpayers may have the obligation to file both the income tax return and the return of assets abroad, it is necessary to highlight that these returns may be filed by different means, since in order to be obliged to file the income tax return virtually, the taxpayer would have to apply any of the criteria indicated in article 1 of Resolution 12761 of 2011, which we addressed in the tax concept entitled Who are obliged to file their tax returns virtually?

Another aspect to consider, at the time of filing the declaration of assets abroad, is that the taxpayer in its RUT should have registered in box 53 Responsibilities, qualities and attributes the code 41 Annual declaration of assets abroad.

Data and values to be recorded in form 160

To this effect it is necessary to comply with the provisions set forth in articles 265 and 266 of the ET, which indicate what is understood by assets owned or not in the country and that we point out in the tax concepts Assets to be included in the income tax return depends on whether the taxpayer is a resident or not and Assets owned abroad must only be declared by taxpayers who are residents.

In answer 6 of Concept 027751 of October 7, 2015 the Dian brings up temporary investments, bank accounts, advances and deposits abroad as examples of those assets that must be recorded in the declaration of assets abroad; however, in that same answer it stated that the funds that the taxpayer has outside Colombia and that are linked to the ordinary course of business that it develops in the Colombian territory must not be included, since they will be understood as possessed in the country.

Another aspect to keep in mind is that the net worth value of the assets must be estimated in local currency according to the representative market rate as of December 31 of the immediately preceding year. If the total value exceeds 3,580 UVT (equivalent to $118,698,000 for 2018), the net worth value, jurisdiction, nature and type of asset must be discriminated, otherwise they will be declared in aggregate form.

The declaration of assets abroad is of informative nature.

The type of declaration that we have been analyzing is simply informative in which it is reported how many assets are owned abroad as of January 1 of each year, therefore, it does not generate tax liability.

Finally, in our editorial Sanctions applicable to the declaration of assets abroad you can learn how these sanctions were after the new features introduced by the tax reform.

Source: Actualícese