Orange economy: tax benefits and requirements to be met

Companies belonging to the orange economy will not pay rent for 7 years.

They must have as their exclusive corporate purpose the development of technological value-added industries and creative activities.

They must create a minimum number of jobs, which in no case may be less than 3.

On February 26, 2020, President Iván Duque signed Decree 286 of 2020 through which companies belonging to the orange economy will not pay income.

Time for which the benefit is granted

The benefit granted will have a duration of seven (7) years for those companies and creative industries that have revenues of less than 80,000 tax value units -UVT- (about 2,849,000 million pesos).

How can this benefit be obtained?

Companies must have as their exclusive corporate purpose the development of technological value-added industries and creative activities, and they must be incorporated and start their activities before December 31, 2021.

Before whom must the orange economy company be validated?

Companies must submit their investment project to the Orange Economy Committee of the Ministry of Culture, justifying its financial viability, economic convenience and qualification as an orange economy activity.

The Ministry must issue an act of conformity with the project and confirm the development of value-added industries.

Minimum investment to be met to apply for the benefit

Companies must comply with the minimum investment amounts, in the terms defined by the national government, which in no case may be less than 4,400 UVT (about 157 million pesos) and within a maximum term of three (3) taxable years.

The companies must also create a minimum number of jobs, which in no case may be less than 3.

Why can the tax benefit be lost?

In case the investment amount is not achieved, the benefit will be lost after the third year.

What are considered as orange economy activities?

For the Ministry of Culture, orange economy activities are grouped into three main areas:

1. Arts and cultural heritage (tangible and intangible).

Cultural industries.

3. Functional creations or creative industries.

What type of companies benefit?

Companies categorized as part of the orange economy are those in the jewelry, publishing, film and television production, exhibition and distribution, sound and music recording and editing, computer consulting and installations, architecture and engineering, design, photography, plastic and visual arts, theater, live music shows, libraries and archives, among others.

And those pertaining to tourism?

–Activitiesof production and commercialization of Colombian handicrafts and crafts of cultural heritage aimed at the protection of movable and immovable property considered cultural heritage.

– Similarly,the activities of administration, promotion of cultural attractions that are included in the inventory administered by the Ministry of Commerce, Industry and Tourism, which have been declared as assets of cultural interest or are part of the manifestations of intangible cultural heritage.

–Activitiescorresponding to tourist transportation, with themes associated with Colombian cultural heritage, which are provided exclusively in “chiva”, traditional river navigation, “jeepaos”, carriages or horseback riding, among other related activities, which do not include any type of modern transportation, etc.

Source: Actualícese