The government of Colombia is planning to roll out changes to its e-invoicing system. The objective is to continue to move towards a paperless system in order to increase the benefits of e-invoicing. The Colombian tax authority or the National Directorate of Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales, or DIAN) has presented a draft of its new e-invoicing plan.
The new plan introduces features for equivalent documents and point-of-sale documents, new obligations and exemptions for e-invoicing, new rules for factoring, an alteration of the roll-out schedule, and more.
The following are some of the changes to the invoicing system if the draft plan is approved by the Colombian tax authority.
Point-of-sale receipts for the payment of goods or services generated by specialized software approved by DIAN will no longer be deductible as of 1st November 2020. In order for them to be deductible, the purchaser must request an e-invoice from the vendor.
The number of equivalent documents, i.e. documents deemed to be equivalent to a sales receipt, will be reduced to 13 types. These equivalent documents must be e-documents as of 30th June 2021. Deadlines, requirements, conditions and technical measures for this have yet to be established by DIAN.
New e-invoicing requirements
The taxpayer groups that will be required to invoice electronically are as follows:
Persons and enterprises subject to sales tax (VAT)
Taxpayers subject to the national consumption tax
Professions in private or independent practice and those who provide essential services to them
Merchants, importers, service providers and vendors to end consumers
Typographers and lithographers not subject to sales tax
Taxpayers registered with the simplified tax system
Taxpayers subject to the simple tax system who registered prior to the entry into force of Law of 27th December 2019 must migrate to the e-invoicing system by 1st May 2020. Taxpayers who registered in 2020 will have two months from the date of their registration to begin e-invoicing.
Among those not required to invoice electronically are foreign companies without tax residence in Colombia, which are not required to issue e-invoices and may use other methods such as paper or equivalent documents.
The schedule for e-invoicing implementation adheres to the International Standard Industrial Classification of All Economic Activities for production processes, which starts on 4th April.
The new regulation extends the deadline to 31st March and exempts those required to begin issuing e-invoices on 1st January that fail to do so for justified and demonstrable grounds such as technological barriers.
As of that date, a penalty equal to closure of the business, office or consultancy applies to taxpayers required to invoice electronically who fail to do so or who issue documents other than sales invoices and/or equivalent documents.
Interoperability, key for e-invoicing in Colombia
Interoperability is critical for establishing e-invoicing in Colombia, which is why the conditions for electronic data exchange are stipulated in the invoicing process as well as those for e-invoice accessibility and readability.
The following are the general criteria for interoperability requirements:
The party obliged to invoice must be technically capable of generating, transmitting, validating, issuing, delivering, receiving and recording e-invoices.
The programming language used must be able to comply with standards.
Single and/or standardized sources of information must be used.
Governmental and regulatory entities regulating information in the sector must be identified.
Industry-standard information processes must be applied.
Industry publication services are required to ensure interoperability.
In the issuing phase, e-invoices are to be sent whenever possible by e-mail or between servers, although other systems are also considered and contingencies have been foreseen to ensure that this process can be completed.
Also, in the issuing phase, if the purchaser is an e-invoice issuer, the electronic sales invoice and validation will be sent by e-mail to the address provided or between servers, subject to agreement of the parties.
If the purchaser is not an e-invoicing party, the purchaser must indicate the method of delivery, by e-mail or in printed form. If the purchaser has not indicated a method for receiving invoices, the purchaser must also indicate if the invoice will be delivered by server or in printed form.
In any case, invoices must be in a fully legible format and access must be guaranteed. E-invoice issuers that force purchasers to enter a platform to view invoices may be penalized for violation of the tax statute.
News on factoring
The draft plan also includes important new developments in factoring, a financing system used widely used in Colombia in which credit is provided based on accounts receivable to give enterprises greater liquidity.
The e-invoicing registry known as RADIAN was created with the approval of the tax authority’s plan. The system allows users to view and track documents.
Is your company prepared to comply with Colombian e-invoicing requirements?
EDICOM is an authorized e-invoicing supplier in Colombia. Since the launch of Colombia’s dematerialization process, EDICOM has guaranteed compliance with the Colombian tax authority’s requirements for e-invoicing.
Through its international e-invoicing platform EDICOM guarantees not only the process of sending and receiving e-invoices in accordance with the requirements of the countries of origin and destination where its clients operate, but also maintaining the platform constantly up to date on technical and legislative developments in each country in order to guarantee compliance with all requirements.