Form 120: Transfer Pricing Declaration

December 15, 2020

The transfer pricing legislation in Colombia establishes, in Article 260-9 of its Tax Statute, that every taxpayer who is subject to the transfer pricing regime must comply with certain formal obligations, such as a transfer pricing information return and supporting documentation.

Therefore, the purpose of this article is to briefly explain when this return will be subject to the regime and the procedure for filing it.

Transfer Pricing Declaration

The taxpayer who carries out transactions with related parties and whose net worth or gross income is equal to or greater than the equivalent of 100,000 or 61,000 UVT, respectively, is obliged to file this return.

Procedure for the Informative Declaration

The National Tax and Customs Administration (DIAN, by its Spanish acronym) has established for the presentation of the transfer pricing declaration the Form N°120.

For this purpose, the DIAN has issued Resolution No. 00065 of 2020, which establishes the procedure for the declaration and adopts the content and technical specifications of the information to be submitted on this form, for the taxable year 2019 and the fraction of the taxable year 2020.

Means of Presentation

As indicated, the informative declaration of transfer prices is made by means of Form N°120, through the computerized services of the Special Administrative Unit of the National Tax and Customs Directorate – DIAN.

Steps for Presentation

According to the mentioned Resolution the following should be followed:

  1. The information contained in Sheet 2 of Form 120 must be submitted virtually through the information services of the DIAN, which in turn had to be pre-loaded in the pre-delivery format designed for such purpose – Form 1125 Version 13. This must be entered through the option “submission of file sending information”, for which the Electronic Signature instrument (IFE) will be required.
  2. Subsequently, the result of the procedure must be validated, for which purpose you must enter Electronic Computer Services through the option indicated above, in which you will find the “application submission query”. If there is no error, the status should indicate “Successful”.
  3. Likewise, you must fill out, sign and submit virtually the Main Sheet of the declaration, for which you must enter the option “fill out and submit”.

Information to be provided

Taxpayers must provide for form 120, format 1125 version 13, which contains information on the transactions carried out with related parties abroad or those carried out with companies in free trade zones; or in jurisdictions with low or no taxation.

Date of Submission

The due date for filing Form 120 is July, depending on the last digit of the NIT.