With a view to improving tax compliance by taxpayers who carry out transactions with related parties abroad or in free trade zones, the National Tax and Customs Directorate (DIAN) has enabled digital tools to facilitate compliance with the formal obligations of the transfer pricing regime for the 2024 tax year.
These measures are intended to simplify the filing process, reduce errors in form and substance, and strengthen the efficiency of tax enforcement by the entity.
Tools enabled by the DIAN
According to information published by the INCP in June 2025, the DIAN has implemented:
- Prevalidator for Form 1125, corresponding to Sheet 2 of Form 120, for the 2024 tax year. This prevalidator allows XML files to be uploaded and reviewed in advance before being reported to the DIAN, thus avoiding errors at the time of official submission.
- Form 120 – Sheet 1, which must be completed and sent electronically with a digital signature through the DIAN transactional portal.
- Updated instructions and manuals, which provide guidance on how to correctly complete the form, prepare supporting documentation, and submit it formally through the system.
- Technical support, available on the DIAN portal, to assist taxpayers during the compliance process.
These tools are available from the pre-validation portal: https://www.dian.gov.co
Filing schedule – Tax year 2024
According to the 2025 Tax Calendar issued by the INCP, the dates for filing Form 120, the Local File, and the Master File are organized according to the last digit of the NIT and are distributed between September 9 and 22, 2025:
| Last digit of the NIT | Due date |
|---|---|
| 1 | September 9 |
| 2 | September 10 |
| 3 | September 11 |
| 4 | September 12 |
| 5 | September 15 |
| 6 | September 16 |
| 7 | September 17 |
| 8 | September 18 |
| 9 | September 19 |
| 0 | September 22 |
Penalties for non-compliance
Failure to file transfer pricing documentation on time or correctly may result in significant penalties, in accordance with Article 260-11 of the Tax Statute. The main penalties are:
- For filing information that is inconsistent with supporting documentation (substantial errors): Fine of 1% of the value of the transaction with the related party, up to a maximum of 5,000 UVT (Tax Value Unit)
- For failing to submit supporting documentation (Local File / Master File):
- Fine of 4% of the value of the omitted transactions, limited to 25,000 UVT.
- If the omission corresponds to transactions with related parties in tax havens, the fine is 6%, with a cap of 30,000 UVT.
- If there is insufficient information to quantify the base, the penalty will be 1% of the total declared value, or 0.5% of net income or equity.
- For omission of non-quantitative information in the supporting documentation (including the Master File): Fine of 2% of the value of the omitted transaction or transactions, up to a maximum of 10,000 UVT.
- For voluntary correction or adjustment of supporting documentation: Fine of 1% of the value of the corrected transactions, not to exceed 5,000 UVT.
These penalties may be cumulative and may also give rise to tax audits resulting in adjustments to the income tax base or the loss of tax benefits.
Conclusion
The DIAN’s implementation of these tools represents a positive step forward in the modernization of the Colombian tax system. However, the formal burden of the transfer pricing regime requires advance planning and a high level of technical detail in the preparation of documentation.
Compliance with these obligations not only avoids costly penalties, but also strengthens the company’s tax position and reputation with the tax authorities. In this regard, having specialized advice and making proper use of the technological resources offered by the DIAN becomes an indispensable strategy for organizations with intercompany operations.
Sources: