Micro and small companies: new criteria will affect tax processes

Decree 957 of June 5, 2019 establishes new criteria to classify micro and small companies, which affect the process of requesting authorization for invoicing numbering and the use of the free electronic invoicing software offered by the Dian.

After having announced it through several draft decrees published since late 2016, the Ministry of Commerce, Industry and Tourism issued Decree 957 of June 5, 2019 (which will enter into force 6 months after its enactment) to regulate Article 2 of Law 590 of 2000 (amended by Article 2 of Law 905 of August 2, 2004 and 43 of Law 1450 of June 16, 2011) and thus redefining the criteria for natural or legal person companies to be classified as micro, small, medium or large.

Prior to this new regulation, the instruction of Article 2 of Law 590 of 2000 indicated that such classification was made as follows (and regardless of whether the company performed industrial, commercial or service activities):

The new regulation introduced with Decree 957 of June 5, 2019 (which adds articles 2.2.1.1.13.1.1.1. to 2.2.1.13.2.5 to DUR 1074 of 2015 of the Ministry of Commerce) indicates that the new criteria will be as follows (note: in general terms, the rule indicates that the income of the immediately preceding year of the company must be observed for its classification):

Processes before the Dian that will be affected with this new classification.

Having the above clear, it is important to comment that the new criteria for classifying companies as micro, small and medium-sized will end up influencing at least two of the processes that are carried out before the Dian, namely:

a. The process of requesting authorization for invoicing numbering. In this regard, Article 9 of Resolution 055 of July 2016 indicates that the Dian decides the invoicing numbers it authorizes to a given taxpayer, taking into account various criteria such as the volume of operations, economic activities, location, type of invoicing, number of establishments, income, equity, behavior and compliance with tax, customs and exchange obligations. Therefore, and as shown in numeral 24 of the Dian’s instructive booklet for the invoicing numbering authorization process, the entity has been taking so far as a criterion to define the number of invoices to be authorized the level of assets established in article 2 of Law 590 of 2000, something that must be pointed out by the user in the virtual application process for the authorization of the numbering of its invoicing (see screenshot).

b. The process of using the free electronic invoicing software. In this regard, and taking into account what is indicated in paragraph 2 of article 1.6.1.1.4.1.10 of DUT 1625 of October 2016 (which compiles article 10 of Decree 2242 of November 2015), the Dian put into operation since July 2018 the “free electronic invoicing software” aimed at companies that qualify as micro or small companies under the terms of article 2 of Law 590 of 2000 (amended with article 2 of Law 905 of 2004 and 43 of Law 1450 of 2011). It is for the above reason that on pages 12 and 13 of the informative booklet for the use of such software it is indicated that the Dian will only be able to give the digital signature mechanism (with which electronic invoices can be digitally signed) to companies that meet the ceilings to be qualified as micro or small companies in the terms of Law 590 of 2000.

Source: Actualícese