For enhanced tax compliance for taxpayers operating related economic entity transactions from abroad or in free trade zones, the DIAN (Dirección de Impuestos y Aduanas Nacionales – National Tax and Customs Directorate) has enabled digital tools to facilitate compliance with formal Transfer Pricing obligations for the 2024 tax year.
These measures intend 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 (Instituto Nacional de Contadores Públicos – National Public Accountants Institute) in June 2025, the DIAN implemented:
- Pre-validator for Form 1125, corresponding to Sheet 2 of Form 120, for the fiscal year 2024. This pre-validator enables XML files to be uploaded and reviewed in advance before being reported to the DIAN, thus avoiding errors at the official filing.
- Form 120 – Sheet 1, which must be completed and filed electronically with a digital signature through the DIAN transactional portal.
- Updated instructions and manuals guide on completing the form correctly, preparing supporting documentation, and filing through the system formally.
- For taxpayer assistance during the compliance process, technical support is available on the DIAN website.
These tools are available on the pre-validators website: https://www.dian.gov.co
Filing Schedule – Fiscal Year 2024
According to the Tax Calendar 2025 issued by the INCP, the dates for filing Form 120, the Local Report, and the Master File are organized according to the last NIT (Número de Identificación Tributaria – Tax Identification Number) digit and are distributed between September 9 and 22, 2025:
| Last NIT Digit | 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 |
Non-Compliance Penalties
Failure to file Transfer Pricing documentation on time or correctly may result in significant penalties, as per Article 260-11 of the Tax Statute. The main penalties are:
- For filing information inconsistent with supporting documentation (substantial errors): Fine of 1% of the value of the related-party transaction, up to a maximum of 5,000 UVT (Unidad de Valor Tributario – Tax Value Unit)
- For failing to file supporting documentation (Local Report/Master File):
- Fine of 4% of the value of the omitted transactions, limited to 25,000 UVT.
- If the omission corresponds to related party transactions in tax havens, the fine is 6%, up to a maximum of 30,000 UVT.
- For 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, with 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 exceeding 5,000 UVT.
- These penalties may be cumulative and lead to audit proceedings 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 modernizing the Colombian tax system. Conversely, the formal burden of the Transfer Pricing regime requires advanced planning and a high level of technical detail in drafting documentation.
Compliance with these obligations avoids costly penalties and 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: INCP / INCP - Calendario Tributario / Estatuto