Ruling Party Ally Introduces Bill to Include VAT on Financial Services
9 agosto 2019

COLOMBIA

 

The Colombia Justa Libres (ally of the ruling party) has filed a bill with the Senate to modify the taxes paid by financial activities. The measure amends Articles 10 and 13 of the 2018 Law 1943 to include a general Value-added Tax (VAT) rate of 19% on financial services which are currently excluded. The bill is expected to be sent to committee in the coming days.

The bill eliminates the tax exemption on commissions received by trust companies and stock exchange commission agents for the management of collective investment funds; on foreign exchange transactions; on commissions received for the use of credit and debit cards; and on interests and financial returns on credit transactions. The regulations determine that Financial Intermediation Services Indirectly Measured (FISIM) and auxiliary financial intermediation services (stock exchanges, brokers, exchange houses) will be taxed at a general VAT rate of 19%.

The measure clarifies that in no case may financial institutions establish additional charges for users or consumers where these involve transferring tax payments to another citizen. Additionally, the resources obtained will be used to finance social programs. Furthermore, the Director of the National Directorate of Taxes and Customs (DIAN) and the Minister of Finance must submit a report in March of each year to the Third and Fourth Committees of the Senate and House regarding  the amounts and execution of the resources obtained from the VAT rate charged on financial services.

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