In light of the financial situation caused by the pandemic due to the outbreak of the coronavirus disease (COVID-19), declared by the World Health Organization on March 11, 2020, the President of the Republic of Colombia has enacted various transitional measures directly and specifically related to the state of Economic, Social, and Ecological Emergency, aimed at preventing and mitigating the effects caused thereby.
The special situation that has arisen has caused various economic damages in the business sector, due to the scarcity of income. Therefore, different measures have been taken with the purpose of generating the recovery and preservation of debtor companies, and thus fulfilling the purpose of the insolvency regime.
Due to the foregoing, the Government issued Decree 930 of August 19, 2021, with the objective of assisting debtor companies that have been vulnerable to the impact generated on the Colombian economy, granting tax benefits.
The main measure of the new regulation grants the National Directorate of Taxes and Customs (DIAN) the authority to grant reductions of principal, interest, penalties, or fines. However, it should be noted that those reductions requested on the principal may not be made with respect to withholding at source, nor on amounts collected for value added tax (VAT), national consumption tax, and those conviction decisions in fiscal liability proceedings conducted by the Office of the Comptroller General of the Republic.
It should be noted that the debtor entrepreneur may submit the request to the Superintendence of Companies, the Civil Circuit Judge, or the Chambers of Commerce, provided that the claim of the National Directorate of Taxes and Customs (DIAN) is recognized and itemized.
Now, although the decree allows all debtor companies to benefit, their request will depend on the insolvency proceeding they are undergoing, that is:
- Debtor companies that, prior to the entry into force of Legislative Decree 560 of 2020, were in insolvency proceedings in accordance with Law 1116 of 2006, or in restructuring agreements under Law 550 of 1999, and must renegotiate due to the situation caused by the pandemic, may request the benefit only on the balance of the obligation subject to the new agreement.
- Companies that are involved in the recovery processes implemented by Legislative Decree 560 of 2020 may submit the request within the term provided for the negotiation of the agreement or its execution.
- Those companies that are in abbreviated reorganization proceedings, as mentioned in Legislative Decree 772 of 2020, may submit the request from the admission to the proceeding.
In this sense, and allowing debtor companies to achieve the protection of the business organization, deadlines and maximum percentages are established, seeking that the debtor entrepreneur can access the offered tax benefits, these are:
- Reductions of principal, interest, and penalties or fines that will be made on the claims subject to the proceeding.
| PAYMENT TIME ESTABLISHED IN THE AGREEMENT FOR DIAN CREDITORS AND STATE ENTITIES | PRINCIPAL REDUCTION | REDUCTION OF INTEREST, PENALTIES, OR FINES |
| If the total payment of the recognized claim is made between year one (1) and year three (3) of execution of the agreement. | Reduction of Forty percent (40%) of the Principal. | Reduction of Eighty percent (80%) of interest, penalties, and fines, as applicable. |
| If the total payment of the recognized claim is made no later than year four (4) of execution of the agreement. | Reduction of Thirty percent (30%) of the Principal. | Reduction of Seventy percent (70%) of interest, penalties, and fines, as applicable. |
| If the total payment of the recognized claim is made no later than year five (5) of execution of the agreement. | Reduction of Twenty percent (20%) of the Principal. | Reduction of Sixty percent (60%) of interest, penalties, and fines, as applicable. |
| If the total payment of the recognized claim is made no later than year six (6) of execution of the agreement. | Reduction of Ten percent (10%) of the Principal. | Reduction of Fifty percent (50%) of interest, penalties, and fines, as applicable. |
| If the total payment of the recognized claim is made no later than year seven (7) of execution of the agreement. | Reduction of Five percent (5%) of the Principal. | Reduction of Forty percent (40%) of interest, penalties, and fines, as applicable. |
| From year eight (8) onwards. | Reduction of 0%. | Reduction of 0%. |
- Reductions of penalties or fines that apply solely to the same concepts that are subject to the proceeding.
| PAYMENT TIME ESTABLISHED IN THE AGREEMENT FOR DIAN CREDITORS AND STATE ENTITIES | PRINCIPAL REDUCTION | REDUCTION OF INTEREST, PENALTIES, OR FINES |
| If the total payment of the claim recognized as a fine or penalty is made between year one (1) and year three (3) of execution of the agreement. | Reduction of 40% of the value of the fine or penalty. | Reduction of 40% of the value of the fine or penalty. |
| If the total payment of the claim recognized as a fine or penalty is made no later than year four (4) of execution of the agreement. | Reduction of 30% of the value of the fine. | Reduction of 30% of the value of the penalty. |
| If the total payment of the claim recognized as a fine or penalty is made no later than year five (5) of execution of the agreement. | Reduction of 20% of the value of the fine. | Reduction of 20% of the value of the penalty. |
| If the total payment of the claim recognized as a fine or penalty is made no later than year six (6) of execution of the agreement. | Reduction of 10% of the value of the fine. | Reduction of 10% of the value of the penalty. |
| If the total payment of the claim recognized as a fine or penalty is made no later than year seven (7) of execution of the agreement. | Reduction of 5% of the value of the fine. | Reduction of 5% of the value of the penalty. |
| From year 8 onwards | Reduction of 0%. | Reduction of 0%. |
In consideration, it is determined that the reduction percentage is strictly linked to the time determined by the debtor entrepreneur in the agreement for the payment of the obligation, that is, the shorter the time, the greater the reduction.
