Developments in 2020: VAT withholding collection system through debit and credit card issuers & COVID-19 measures

Allows foreign providers of digital services to opt into a VAT withholding collection system through debit and credit card issuers.
Does not require foreign non-resident providers of digital services to issue Colombian invoices
COVID-19
- Granted extensions for certain tax installment payments; reduced tax rates, provided three-day VAT exemption and fast-tracked procedures.
- Authorized the Colombian tax authorities to automatically issue income tax and VAT refunds to taxpayers that are not categorized as high-risk taxpayers and at least 25% of whose costs or expenses or VAT credits are supported on electronic invoices until December 31, 2020.
- Enacted a number of VAT exemptions and reduced rates.
- Exempted companies reorganizing (similar to a Chapter 11 process) from income tax withholding or self-withholding, and subjects them to VAT withholding at 50% of the usual rate, through the end of 2020; for tax years 2020 and 2021, reorganizing companies should treat reductions or discounts obtained during the process in accounts payable as capital gains, subject to a reduced capital gains rate of 10% (compared to general rate of 32%)