Penalties applicable to VAT prepayment

August 19, 2021

Through the “Asuntos Legales” website, lawyer Alexandra Verano commented on the communication sent a few months ago to those responsible for VAT payment, where they were instructed to review the periodicity of the filing of their returns (bimonthly or four-monthly).

The message requested that in case taxpayers had filed a bimonthly return when they should have done it every four months, they should do the process again in the corresponding periodicity and pay a penalty for untimeliness, not being recognized as filed the bimonthly ones. This figure applies similarly to the opposite case, for those who should have filed bimonthly returns but did so every four months.

1. Discrepancies in the regulations

According to the lawyer, the DIAN (Dirección de Impuestos y Aduanas Nacionales – National Tax and Customs Directorate) relied on paragraph 2 of article of Decree 1625 of 2016. Thus, VAT returns that would have been filed in different periods from those established in the law have no effect.

The assumption raised is not contemplated in Article 600 of the Tax Statute, nor in Article 580 thereof, which expressly establishes the events a return is not considered filed. In this sense, the aforementioned article could be questioned for exceeding the regulatory power and invading one reserved to the legislator.

On the other hand, it is important to point out the decree granted the same consequence without considering the periodicity for declaring VAT, i.e., it did not regulate especially in those cases a bimonthly declaration was made when the period was four-monthly.

If the VAT taxpayer formally failed to comply with its periodicity also did with its obligation by paying in advance. Therefore, the bimonthly return filing would be, being a four-monthly one, conduct lacking in seriousness whose consequence is disproportionate.

2. Recommendations

Finally, the lawyer recommends the VAT taxpayer file their returns in the corresponding legal periods to avoid the DIAN procedures to attribute penalties.

Source: Asuntos Legales 18/08/21