Simple taxation regime: learn about its characteristics.

José Andrés Romero, director of the Dian states that the simple taxation regime paves the way for a paperless route that will boost formalization, easing the tax burden on entrepreneurs, and strengthening the country’s economic development. In simple terms we explain.

On May 20, 2019, the Dian and the Bogota Chamber of Commerce held the launch of the simple taxation regime -SIMPLE-, which was implemented through Article 66 of the Financing Law 1943 of 2018, and replaced the eighth book of the Tax Statute -ET-, which contained the guidelines of the monotributto. We briefly describe its characteristics, what taxpayers interested in opting for this and how to register.

-One of its objectivesis toreduce the formal and substantial burdens of taxpayers, to promote formality and to facilitate compliance with tax obligations.

–Thesimple tax regime is optional. However, the Dian may include taxpayers who have not complied with their tax obligations with districts, municipalities and the nation.

–Taxpayersopting for this regime will have the integration of up to four taxes: SIMPLE (formerly income tax), national consumption tax -INC-, sales tax -IVA- and industry and commerce, as well as its complementary of notices and boards and firefighter surtaxes.

It will generatesavings in transactional costs, and will allow self-registration in the RUT and electronic settlement and payment.

-Itwill improvethe cash flow of taxpayers who opt for it, since they are not subject to withholdings at source, nor are they obliged to make them, with the exception of labor or VAT withholdings.

Who can opt for SIMPLE and how do they register?

-Naturalpersons who develop their activity with business criteria or legal persons of corporate nature that in the previous taxable year have obtained gross income, ordinary or extraordinary, less than 80,000 UVT ($2,741,600,000), may opt for the simple taxation regime.

–Those whomeet these requirements, and are interested in being part of the SIMPLE in 2019, may register until July 31.

–From2020 onwards, they will only be able to do so until January 31 of each year.

–Taxpayersmust register responsibility number 47, when registering for the first time or when updating the RUT.

-Naturaland legal persons that carry out commercial activities and are not yet registered in the RUT, will be able to generate the pre-RUT to present it before the respective chamber of commerce, and obtain in a single procedure both the registration in the RUT and the chamber of commerce certificate, taking advantage of the new simple taxation regime.

-Individualswhodo not carry out commercial activities in order to apply for this regime will be able to register in the RUT online, without having to go to a Dian contact point.

–In order todo this, they must have a photo of each side of the identification card and a photo of the face of the person performing the procedure, in order to automatically corroborate the identification data and thus guarantee the security and authenticity of the registrant.

-Ifyou are already registered in the RUT and you wish to join the SIMPLE, you may update the RUT online by informing the responsibility number 47 with or without electronic signature.

Source: Update