The 2012 worldwide VAT, GST and sales tax guide

132 C OLOMBIA
G. Acquisitions or importations of industrial machinery
In general, VAT paid for the acquisition of fixed assets is not
claimed as a discount (credit), but is treated as part of the cost
paid for the assets and is included in the base for depreciation.
Heavy machinery for basic industries. VAT paid for the acquisition
of heavy machinery by a company involved in one of the
basic industries (for example, mining, oil and gas, and power
generation) may be treated as a discount against tax due in the
taxpayer’s income tax returns. The discount may be applied in the
tax year of acquisition or importation and in the following periods.
If the imported machinery has a Cost, Insurance, Freight
(CIF) value in excess of US$500,000, VAT may be paid in the
following percentages:
• 40% when the importation form is completed
• The remaining 60% within the next two years
The taxpayer must enter into a payment agreement with the local
tax authorities if it wishes to use the above method.
A special measure applies to long-term temporary imports of
heavy machinery that are not produced in Colombia and that are
imported by companies involved in basic industries. Under this
measure, these imports are excluded from VAT, at the time of the
entry of the goods into Colombia. To obtain the VAT exclusion,
the importer must submit a certificate of the Ministry of Industry,
Commerce and Tourism at the time of entry. This certificate must
state that the machinery to be imported is not produced in
Colombia and that it will be used in a basic industry.
Depending on the situation, VAT paid for the acquisition of “real
productive fixed assets” may be treated as one of the following:
• A part of the cost of the goods acquired.
• A tax discount in the income tax return. This measure applies
only to industrial machinery acquired or imported by producers
of VAT-excluded products or the VAT paid in the acquisition or
importation of heavy machinery in basic industries.
H. Recovery of VAT by nonestablished businesses
Colombia does not refund VAT incurred by foreign or nonestablished
businesses unless they are registered for VAT there. However,
members of accredited diplomatic missions and members of
the United Nations may claim a refund of VAT paid.
I. Invoicing
Tax credit documents, invoices and credit notes. A taxable person
must provide a VAT invoice for all taxable supplies made, including
exports. In some cases, other documents may be treated as
equivalent to invoices such as tickets and contracts signed with
nonresidents for technical services or technical assistance services.
A tax invoice is generally necessary to support a claim for
input tax credit.
Exports. VAT is not chargeable on supplies of exported goods.
Exports are exempt from VAT. However, to qualify as VAT-free,
exports must be supported by customs documents that prove that
the goods have left Colombia. The exporter must file a declaration
to the tax authorities (DEX) and be registered as an exporter with
the Ministry of Foreign Trade (Mincomex). In Colombia, sales of
goods required for the normal development of the businesses of