The tax reform clarifies the way in which the taxable basis for the VAT should be determined when importing goods from free trade zones. The tax reform also excludes from VAT brokerage services for reinsurance contracts and commissions paid to investment management companies.
Medicines are generally included in the VAT-exempt goods list (0% rated). The tax reform charges the National Commission for the Prices of Medicines and Medical Devices with reviewing the effective reduction of medicine prices of as a result of this exemption.
In addition, the tax reform:
- Adds a VAT exclusion for cosmetic surgeries, as well as for certain bicycles under 50 tax units (approximately US $520)
- Reintroduces Article 491 of the Colombian Tax Code, which expressly indicates that VAT paid on the acquisition of fixed assets generally cannot be treated as creditable input VAT
- Provides that foreign nonresident providers of digital services are not required to issue Colombian invoices or equivalent documents
- Establishes three days per year in which there will be a VAT exemption for some products, provided the value does not exceed certain amounts
- Requires a fixed amount to be paid to low-income families to reimburse them for VAT paid
Source EY
