Tax residency: The result that will have for individuals

The condition of being a resident or non-resident will have different consequences at the time of preparing the income tax return of a natural person; among them, the type of information to be reported and the form to be used.

Article 10 of the Tax Statute -ET- indicates the conditions that must be taken into account when considering the tax residence of a natural person. Some of these are:

Permanence in the country

That the person remains in the country, continuously or discontinuously for more than 183 calendar days, including the days of entry and exit of the country, during any period of 365 consecutive calendar days. The analysis of this case requires studying certain particularities that were exposed in Dian Concept 47513 of August 6, 2014.

Suppose that a Colombian and a foreigner were living in the USA and came to visit Colombia between July 1 and September 30, 2018. The 365 days of permanence start with the date of entry to the country. Thus, as of December 31, 2018, it would be said that for such taxable year they did not reach to become residents, since they were only for 92 days in Colombian territory.

However, in 2019 they returned to Colombia and stayed 100 days more between February 1 and May 11 of that year. Therefore, as the 365-day period started counting from July 1, 2018 and until July 1, 2019, if during that period they were on Colombian soil discontinuously, for more than 183 days (92 of the visit in 2018, plus the 100 days in 2019), the person in this case will become a tax resident for the taxable year 2019. But if between January 1, 2019 and July 1, 2019 the person had not returned to Colombia, or if in case he/she had come he/she had not stayed more than 91 days, nothing would happen to him/her for the taxable year 2019, since in total, between July 1, 2018 and July 1, 2019, he/she would not have complied with having been on Colombian soil for more than 183 days.

Foreign service of the Colombian State

That the person is linked to the Colombian State and renders services abroad, but that, by virtue of the Vienna Convention on Diplomatic and Consular Relations, is exempt from taxation in the country where he/she is on mission, with respect to all or part of his/her income and occasional gains, during the respective taxable year or period.

Other requirements

A natural person shall be a tax resident if during the respective taxable year:

a. His/her spouse or permanent partner not legally separated, or the dependent minor children, have tax residence in the country.

b. 50% or more of their income is of national source.

c. 50% or more of their assets are administered in the country.

d. 50% or more of its assets are deemed to be owned in the country.

e. It does not prove its condition of resident abroad for tax purposes.

f. Has tax residence in a jurisdiction qualified by the national government as a tax haven.

“The previously known as tax havens are now called non-cooperating jurisdictions of low or no taxation and preferential tax regimes”.

With respect to what is indicated in literal f) indicated lines above, it is important to warn that through Decree 1966 of October 7, 2014 (modified with 2095 of October 21, 2014, and subsequently compiled between articles 1.2.2.2.5.1 to 1.2.2.5.5.3 of DUT 1625 of October 11, 2016) defined the 37 countries or territories that would be considered as tax havens during 2015 and subsequent years in the eyes of the Colombian Government-those previously known as tax havens are now called non-cooperative jurisdictions of low or no taxation and preferential tax regimes; see articles 124-2 and 260-7 of the ET, modified with Law 1819 of 2016-. Such countries and/or territories were:

1. Antigua and Barbuda.

2. Svalbard Archipelago.

3. Territorial Collectivity of St. Pierre and Miquelon.

4. State of Brunei Darussalam.

5. State of Kuwait.

6. State of Qatar.

7. Independent State of Western Samoa.

8. Grenada.

9. Hong Kong.

10. Queshm Island.

11. Cook Island.

12. Pítcairn, Henderson, Ducie and Oeno Islands.

13. Solomon Islands.

14. Laban.

15. Macao.

16. Commonwealth of Dominica.

17. Commonwealth of the Bahamas.

18. Kingdom of Bahrain.

19. Hashemite Kingdom of Jordan.

Cooperative Republic of Guyana.

Republic of Angola.

Republic of Cape Verde.

Republic of the Marshall Islands.

24. Republic of Liberia.

25. Republic of Maldives.

26. Republic of Mauritius.

27. Republic of Nauru.

28. Republic of Seychelles.

29. Republic of Trinidad and Tobago.

30. Republic of Vanuatu.

31. Republic of Yemen.

32. Republic of Lebanon.

33. Saint Kitts and Nevis.

34. St. Vincent and the Grenadines.

35. Santa Elema, Ascension and Tristan de Cunha. 36.

36. Saint Lucia.

37. Sultanate of Oman.

Information to report.

“Residency status does not only have an impact on whether Form 110 must be filed by non-residents and Form 210 ceded by residents.”

The residency status not only has an impact on whether Form 110 must be filed by non-residents and Form 210 ceded by residents; it also has an impact on the information to be reported. Thus, while a resident must report both domestic and foreign source income, together with assets inside and outside the country, a non-resident must only declare domestic source income and assets owned in Colombia.

Source: Actualícese