By Which Rules Are Issued In Customs Sanitation And Other Provisions On Tax Matters

Original Language Title: Por el cual se expiden normas en materia de saneamiento aduanero y se dictan otras disposiciones en materia tributaria

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ACT 174 OF 1994

(December 22)

Official Journal No. 41,643 of 22 December 1994

For which rules are issued in the area of customs sanitation and other tax provisions are issued.




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ARTICLE 2o. INVENTORY COST. Add article 62 of the Tax Statute with the following paragraph:

" Paragraph. For the purposes of determining income tax, taxpayers who under Article 596 of this Statute are required to file their signed tax return. Fiscal reviewer or Public Accountant, shall establish the cost of the disposal of assets movable by the system of permanent or continuous inventories, or by any other system of recognized technical value within accounting practices, authorised by the Directorate of National Taxation and Customs. '

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ARTICLE 3o. UNMOUNT UEPS OR LIFO PROVISION. Article 65 of the Tax Statute will be as follows:

" Article 65. Graduality in the dismount of the UEPS or LIFO provision. For tax purposes, Income Tax and Complementary taxpayers who have differences between the declared final inventory valued based on the use of UEPS or LIFO modalities (last entries, first exits) and the final inventory valued by other systems for their internal effects, shall disassemble the balance of those differences, existing at 31 December 1994, in their income declarations from the taxable year of 1995 at the latest until the year taxable in 1999, using at least 20% per annum.

The values obtained based on the parameters established here will have the effect of an increase in the value of the respective period inventories and a fiscal monetary correction income.

PARAGRAFO. The method that is used for inventory valuation (First Entries, First Outputs, Last Entries, Last Outputs, or Average, or Specific Identification), must be applied in the accounting in a uniform manner throughout the taxable year, which must be reflected at any time in the period in the determination of the inventory and the cost of sales.  The value of the detailed inventory of stocks at the end of the financial year must match the total recorded in the accounting books and the income statement.

The change in the valuation method must be notified in advance to the corresponding National Tax and Customs Administrator, in accordance with the procedure that points to the regulation ".

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ARTICLE 4. AVALUO AS A TAX COST. Article 72 of the Tax Statute will be as follows:

" Article 72. Avaluo as a tax cost. The avaluo declared for the purposes of the Unified Predial Tax, in development of the provisions of Articles 13 and 14 of Law 44 of 1990 and 155 of Decree 1421 of 1993, and the avaluos formed or updated by the cadastral authorities, in the terms of Article 5o. of Law 14 of 1983, may be taken as a tax cost for the determination of the occasional income or profit that occurs in the disposal of buildings that constitute fixed assets for the taxpayer.  For these purposes, the self-guarantee or acceptable as a tax cost, will be the one shown in the declaration of the Unified Predial Tax and/or income statement, as the case may be, corresponding to the year before the sale.  For this purpose, no account shall be taken corrections or additions to the tax declarations or the unformed endorsements referred to in Article 7o. of Law 14 of 1983. "

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ARTICLE 5o. ACCOUNTING AND FISCAL EFFECTS OF THE COMPREHENSIVE ADJUSTMENT SYSTEM. The second indent of Article 330 of the Tax Statute will be as follows:

" For the purposes of commercial accounting, the system of comprehensive inflation adjustments shall be used, in accordance with the principles or accounting standards generally accepted in Colombia, and in the principles or rules of accounts issued for their surveillance by the respective control entities, in accordance with the legal nature and the activities carried out by the persons required to keep accounts. "

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ARTICLE 6o. UNIFICATION OF THE ADJUSTMENT INDICES. Add article 331 of the Tax Statute with the following final indent:

"In the income tax determination the same indices and classifications of the inflation adjustments recorded in the accounting for the corresponding items will be used."

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ARTICLE 7o. NOTIFICATION NOT TO MAKE ADJUSTMENTS. Article 341 of the Tax Statute, shall be as follows:

" Article 341. Notification not to make the adjustment. Income tax and supplementary tax payers shall notify the respective tax administrator of their decision not to make the adjustment referred to in this Title, provided they demonstrate that the market value of the asset is at least 30% lower than the cost which would result if the respective adjustment was applied. This notification shall be made at least four months in advance of the deadline for the deadline to be declared.

PARAGRAFO. For the purposes of this Article, there shall be no notification for the purposes of the adjustment, in the case of non-cash assets whose tax cost at 31 December of the taxable year preceding the adjustment year is equal to or less than 50%. Millions of pesos ($50,000,000), provided that the taxpayer keeps in his accounts a certification of an expert, on the market value of the corresponding asset ".

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ARTICLE 8o. BASIS FOR TAX ADJUSTMENTS. Article 353 of the Tax Statute will be as follows:

" Article 353. Bases for tax adjustments. Tax adjustments on non-cash assets, non-cash liabilities and assets shall be made on the basis of the tax cost of assets and liabilities as determined in accordance with Chapter II of Title I and Chapters I and III of Title II of Book I of this Statute, and in Article 65 of Law 75 of 1986. The same basis must be used to declare the asset value of the assets and for the calculation of the theoretical deduction. To compute the value of this deduction the inventories will not be taken into account.

When a non-cash asset has not been subject to inflation adjustment in the financial year, its net equity value shall be excluded for the purposes of the adjustment of the liquid assets. "

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ARTICLE 9o. SOURCE RETENTION. Modify the 401, 366-1 , and 392 items in the Tax Statute in the next form:

" a) Article 401 is added to the final paragraph:

Without prejudice to the provisions of Article 398 of the Tax Statute, the withholding rate at the source for payments or credits taken into account referred to in this Article, received by Taxpayers who are not obliged to make a statement of income shall be 3%. In the other concepts listed in the first paragraph of this article, and in cases of acquisition of agricultural goods or products or livestock without industrial processing, purchases of parchment-type coffee, payments to wholesale distributors (a) the provisions governing the acquisition of real estate or vehicles or contracts for the construction, urbanization and, in general, the manufacture of immovable property, the provisions governing the use of the corresponding holds ".

" b) Article 366-1 of the Tax Statute is added to the following paragraph, as a second paragraph:

The rate of withholding tax on foreign currency income from abroad, constituting income or occasional gain, which is perceived by taxpayers who are not required to provide income and supplementary income, is the 10% (10%), irrespective of the nature of the beneficiaries of such income. The withholding rate at the source for the taxpayers required to declare will be that indicated by the National Government. "

" c) Article 392 of the Tax Statute is added to the following final paragraph:

The withholding tax on the source for fees and commissions, collected by taxpayers who are not required to provide income and supplementary income, is ten percent (10%) of the value of the corresponding payment or credit. The same rate shall apply to payments or credits in the account of consultancy contracts and fees in the contracts of delegated administration. The withholding rate at the source for the taxpayers required to declare will be that indicated by the National Government. "

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ARTICLE 10. INVOICE REQUIREMENTS. Addition to paragraph 2o. of Article 617 of the Tax Statute with the following paragraph:

" When the taxpayer uses a computer billing system or registration machines, with the printing done by such means, the pre-print requirements are understood. The billing system must number invoices in a row and the necessary means must be provided for verification and auditing. "

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ARTICLE 11. CONTROL NORMAS. To the special contributions that are dealt with by 11, 12 , and 15 of Law 6a. of 1992, are applicable to them in the relevant, the rules governing the processes of determination, discussion, recovery and penalties contemplated in the Tax Statute and their control will be in charge of the Special Administrative Unit Taxes and National Customs.

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ARTICLE 12. DEBT REMISSION. Add article 820 of the Tax Statute with the following paragraph:

" The Director of National Taxation and Customs is empowered to delete from the taxpayer's current records and accounts, the debts to his office by way of taxes administered by the U.A.E. National, sanctions, interest and surcharges on the same, up to a limit of three hundred thousand pesos ($300,000) for each debt (base value for 1994), provided they have at least three years of due. The limits for annual cancellations will be marked by general resolutions ".

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ARTICLE 13. Repeal the second paragraph of article 88 of Law 101 of 1993.

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ARTICLE 14. NET INCOME TAX. It is the result of applying the respective rates to the taxable liquid Income or Utility and subtracting the tax rebates.

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ARTICLE 15. VAT ON FUNERAL SERVICES. Add article 476 of the Tax Statute with the following paragraph:

" Funeral services, cremation services, burial and exhumation of corpses, rental and maintenance of graves and mausolees, funeral notices contracted through funeral homes, and, in general, all activities inherent in same ".

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ARTICLE 16. TAX AMNESTY. Taxpayers of income tax and supplementary, domiciled, in special customs regime areas, before the validity of this law, which would have omitted movable assets represented in goods, in their income statements for the taxable years of 1993 and earlier may include them in the income statement for 1994, without any investigations, penalties, requirements, settlements or revisions in the concerning the assets which are the subject of the amnesty or the revenue which gave rise to such assets.

To be entitled to this benefit requires compliance with the following requirements:

(a) That the income statement of the year 1994 be presented in a timely manner and that the taxpayer includes a taxable income greater than that reported in his declaration of the taxable year of 1993. The benefit provided here also covers the taxpayers of the above mentioned areas who have the income and supplementary declarations for the first time, in which case they will not require compliance with this requirement;

(b) Within the term of the term of the income statement for the taxable year 1994, a supplementary income tax equal to three percent (3%) of the value of the inventories subject to the amnesty is paid.

With regard to national companies, the greatest value of the equity originated by the amnesty in this article is considered to be a surplus for retained earnings from prior to 1994, not constituting income or profit. occasional for its partners or shareholders at the time of distribution.

PARAGRAFO. The amnesty referred to in this Article may not be a cause of invalidity, revocation or invalidity of the proceedings in respect of which a special injunction, placement or statement of objections has been notified prior to the date of notification. publication of this Law.

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ARTICLE 17. VALIDITY. This Law governs since its publication and repeals all provisions that are contrary to it.

The President of the honorable Senate of the Republic (E.),


The Secretary General of the honorable Senate of the Republic,


The President of the honorable House of Representatives,


The Secretary General of the honorable House of Representatives,


Republic of Colombia-National Government.

Publish and execute.

Dada en Santafe de Bogota, D.C., at 22 December 1994.


The Minister of Finance and Public Credit,


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