Income tax return: Penalties for not filing on time.

On October 19, 2018, the deadlines for filing the income tax return of individuals will end. If you did not file it in accordance with the established dates, you must calculate the penalty for untimeliness, following the guidelines established in article 641 of the ET.

When a natural person is required to file the income tax return, and fails to do so within the deadlines established by law, which are set by Decree 1951 of 2017(see our information on the 2018 tax calendar) will incur in penalty for untimeliness.

Keep in mind that such penalty is less burdensome if it is calculated before the summons is issued by the Dian, because in case of reaching such term, the duplication of the penalty will be generated.

“In all the above cases, the value to be liquidated may not be less than the minimum penalty, corresponding to 10 UVT ($ 332,000 for 2018)”.

This is how, according to article 641 of the ET, taxpayers obliged to declare that file tax returns extemporaneously must liquidate and pay the penalty, as follows:

–Whenthere is tax payable the corresponding penalty for each month or fraction of calendar month of delay, is equivalent to 5% of the total of such tax or withholding without exceeding 100% thereof, this will be charged without prejudice to the interest originated by the failure to pay the tax, advance payment or withholding.

–It should benoted that when the tax return does not result in tax payable, the penalty for each month or fraction of a month shall be equivalent to 0.5% of the gross income received in the taxable period, without this figure exceeding the lower value resulting from applying 5% to such income, or double the balance in favor, if any. Likewise, it may not exceed the amount of 2,500 UVT ($ 79,648,000 and $ 82,890,000 for taxable periods 2017 and 2018 respectively) when there is no balance in favor.

–Ifduring the period no gross income or taxes in charge were originated, the penalty shall correspond to 1% of the total net worth of the immediately preceding year; this value may not exceed the lower figure resulting from applying 10% to the immediately preceding net worth, twice the balance in favor if any, or the sum of 2,500 UVT when there is no balance in favor. In all the above cases, the value to be liquidated may not be less than the minimum penalty, corresponding to 10 UVT ($ 332,000 for 2018).

“shall be equivalent to 1.5% of the value of the assets held abroad if this is filed before the summons of the Dian, or 3% of the value thereof if filed after”.

By means of Article 283 of the Tax Reform Law 1819 of 2016, three paragraphs were added to Article 641 of the ET, highlighting then the application of the penalty for untimeliness in the annual declaration of assets abroad held by the taxpayer, where the penalty for each month or fraction of calendar month of delay will be equivalent to 1.5% of the value of the assets held abroad if it is filed before the Dian’s summons, or 3% of the value thereof if it is filed after such summons and before the sanction resolution for not declaring is issued. It should be noted that in no case such penalty may exceed 25% of the value thereof.

Return filed after the summons

When a taxpayer receives a summons from the Dian, by means of which he/she is granted one month to satisfy the obligation that he/she has not complied with, it is understood that by voluntarily complying with such request, he/she must pay the penalty for untimeliness contemplated in article 642 of the ET, as follows:

–Whenthere is tax payable, the responsible taxpayer shall liquidate and pay a penalty for untimeliness for each month or fraction of calendar month of delay, equivalent to 10% of the total tax payable or withholding, without exceeding 200% thereof.

–Whenthere is no tax payable, but there is gross income, the penalty for each month or fraction of calendar month of delay shall be equivalent to 1% of the gross income received by the filer in the taxable period, without exceeding the lower figure resulting from applying 10% of such income; 4 times the value of the credit balance if any, or the sum of 5,000 UVT ($159,295,000 and $ 165,780,000 for taxable periods 2017 and 2018 respectively) when there is no credit balance.

–Inthe event that there was no gross income during the period, nor tax payable, the corresponding penalty shall be 2% of the net worth of the immediately preceding year, without exceeding the lower figure resulting from applying 20% to such net worth, 4 times the value of the credit balance if any, or the amount of 5,000 UVT when there is no credit balance.

These penalties will be charged without prejudice of the interests originated by the non-payment of the tax or withholding that the taxpayer has to pay. For further information on this subject, please refer to our editorial entitled “Penalty for untimeliness in income tax return of natural person before notification of the Dian”.

Finally, it must not be lost sight of the fact that the amount to be liquidated in no case may be below the minimum penalty established by law and that in addition, the amendments introduced by the tax reform law to article 640 of the ET, allow this penalty to be reduced to 50% or 75% of the amount, depending on who settles it (the taxpayer or the Dian), the period in which the penalty was committed and the fulfillment of other conditions that you can deepen in our analysis Reduction of penalties and other principles in the penalty regime are regulated by the reform and Reduction of penalties, how do they apply in the income tax return?.

The calculations already specified, both to obtain the initial value of the penalty and that of the possible reduction, can be executed more easily with our tools Penalty for untimeliness before the summons and Penalty for untimeliness after the summons.

Source: Actualícese