VAT return: should it be filed in zeroes?

VAT returns must be filed by those responsible for this tax, either on a bimonthly, quarterly or annual basis, depending on the regime to which they belong or the amount of their gross income.

However, there are doubts as to whether there are cases in which the return must be filed in zero.

The VAT return must be filed by those responsible for VAT either on a bimonthly or quarterly basis, depending on the level of their gross income (according to the indications of article 600 of the Tax Statute -ET-), or on an annual basis if they belong to the simple taxation regime (see article 915 of the ET).

However, the second paragraph of article 601 of the ET states that VAT taxpayers are not obliged to file the respective return when:

– No operations subject to VAT have been carried out.

– No operations have been carried out that give rise to deductible taxes.

– No adjustments or deductions have been made under the terms of Articles 484 and 486 of the ET.

In this order of ideas, the VAT return must not be filled out in zeros, that is to say, it must not be filed before the Dian when during the taxable period no operations have been carried out that give rise to this tax obligation. However, it is necessary to clarify that, in order to proceed with the provisions of the second paragraph of article 601 ibidem, it is necessary that the 3 aforementioned requirements are met.

It is important to take into account that, when during a period (bimonthly, quarterly or annual) only income derived from sales exempt from VAT has been obtained, the person responsible for this tax will be obliged to file the respective return, since, although sales exempt from VAT do not generate this tax, given that the income is subject to the 0% VAT rate, it is taxed with the tax in question.

Therefore, it is understood that during the period in which VAT exempt income was received, if operations subject to this tax were carried out, in accordance with the instructions of article 601 of the ET, this obliges the responsible party to file the VAT return recording the total VAT exempt income, even if the return does not show any tax payable.

Return for sales excluded from VAT

In the case of periods in which the taxpayers have only obtained income excluded from VAT, it will not be necessary to file such return, since the income excluded from VAT is not subject to this tax, which is why the requirement mentioned in the second paragraph of article 601 of the ET would be complied with.

VAT return for balance in favor of previous periods

In the event that the VAT return does not have to be filed because the 3 requirements set forth in article 601 of the ET are met, but in the previous period in the return a balance in favor of the taxpayer has been settled, it is important to take into account that such return does not need to be filed with zeroes just because there is a balance in favor of the taxpayer.

It is up to the taxpayer to choose between filing the VAT return in zero to carry forward such credit balance or not to file the return in zero and simply request the refund of such credit balance to the Dian.

However, it is important to consider that not all VAT credit balances may be requested for refund, since paragraph 1 of article 850 of the ET states that, when VAT returns contain credit balances, the regulation establishes that only the following VAT taxpayers may request the compensation or refund of such amounts:

– Persons responsible for exempt goods and services, mentioned in article 481 of the ET.

– Producers of exempt goods (see article 477 of the ET).

– Producers and sellers of numerals 4 and 5 of article 477 of the ET.

– Persons responsible for goods and services taxed at the 5% rate (see articles 468-1 and 468-3 of the ET).

– Responsible parties to whom withholdings have been made.

Source: Update.

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