Law 1819 of 2016 amended Decree 624 of 1989, among which it established that associations, foundations, cooperatives, and corporations constituted as non-profit entities would be subject to income tax and complementary taxes. However, those entities created as of December 31, 2016 could remain in the special tax regime and obtain a net benefit at the rate of 20% for the year in which the income was obtained.
This 2016 tax reform established that from January 1, 2018, and until April 30, 2018, non-profit entities have the opportunity to adhere to the new special tax regime. Now, for such entities to remain in the special tax regime, they must be duly constituted, their contributions and surpluses cannot be reimbursed or distributed in any way, their corporate purpose must be of general interest, and the community must have access to them, meaning they must carry out activities in culture, health, scientific and technological research, social development programs, or sports.
Additionally, they must register in an application designated by DIAN, which consists of reviewing the RUT registration, the entity's complete data, its responsibilities, the oversight and control entity, indicating the benefit of being a non-profit entity, data of the legal representative, compliance with the corporate purpose required to belong to the special tax regime, and having an electronic signature; completing the Prevalidated information via SIE Carga Masiva as required by DIAN, and filing the permanence request through the Special Tax Regime Electronic Service.
They must also complete certain entity documents, such as financial statements, the incorporation document, minutes of the highest governing body where the distribution of the net taxable benefit of the previous year was approved, as well as those where the request to remain in the special tax regime was approved, certifications of the legal representative's criminal records, existence and legal representation, registration of economic memory when gross income exceeds $5,097,440,000, and the declaration of expiration of state contracts of the entity's administrators and governing bodies.
Finally, non-profit entities that do not submit the permanence request to DIAN by April 30, 2018, will no longer belong to the special tax regime, and from that date until approximately October 31, 2018, the tax administration will issue administrative acts to determine the exclusion of these entities from this regime.