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Corporate Compliance Requirements for Legal Entities in Colombia

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Starting a business in Colombia? It's important to understand the local regulations that set out your corporate responsibilities. Find out about national taxes, social benefits, and corporate and labour obligations for your business.

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Corporate Compliance Requirements for Legal Entities in Colombia

  1. 1. Corporate Compliance For Legal Entities in Colombia www.bizlatinhub.com
  2. 2. Colombia’s Compliance Requirements Regardless of their commercial activity, all legal entities located in Colombia must comply with a series of obligations managed by various government entities. These obligations fall within the following categories: 1. Corporate obligations 2. National taxes 3. Labor obligations 4. Social benefits
  3. 3. 1. Corporate Obligations The legal entity has to meet certain corporate obligations to ensure that it is compliant with local legal requirements. A) Renewal of its Commercial License with the Chamber of Commerce Deadline: On an annual basis, before the 30th of March. B) Hold a Shareholder Meeting Deadline: On an annual basis, before the 30th of March. C) Preparation and filing of “Reporte de Información Exogéna” (Report of Exogenous Information) before DIAN (National Tax Authority). Deadline: On an annual basis, the exact month depends on the activities of the company
  4. 4. 2. National Taxes Every legal entity in Colombia has to meet tax obligations to ensure that it is compliant with the legal tax requirements of the National Tax Authority, the DIAN. Calculation, preparation and filing of tax declarations with the DIAN is required on a monthly and annual basis. The most prevalent taxes are the following: IVA – “Impuesto al Valor Agregado” (VAT - Value Added Tax) ICA – “Impuesto de Industria y Comercio” (Industrial and Commercial Tax) Withholding Taxes – “Retención en la Fuente” (Depending on the tax and the quality of the services) Deadlines: IVA and ICA depend on company activity. The withholding taxes depend on company services.
  5. 5. 3. Labor Obligations Every legal entity in Colombia has certain labor obligations: a) Prima: Primas are a bonus that employees receive every 6 months, paid at the end of June and December. They should be half a month salary. b) Vacation: 15 days c) Government Entity: The UGPP monitors the companies so the labor obligations are met, but no reports are required
  6. 6. 4. Social Benefits The legal entity is required to provide social benefits: • Equalization Fund - Caja de Compensación • Severance Pay - Cesantias • Health Contribution - Aporte para salud, EPS • Pension Contribution - Aporte para pension • Occupational Risk Contribution - Riesgos Laborales ARL Deadline: Within the first week after the salary payment. Government Entity: The UGPP monitors the companies so the social benefits are paid, but no reports are required.
  7. 7. Schedule of Annual Corporate Requirements Requirement to be presented Frequency Date of Filing Government Agency Renewal of Commercial Licence Annual 30 March Cámara de Comercio Hold a Shareholder Meeting Annual 30 March - Filling of “Reporte de Información Exogéna” Annual Depends on company’s activities DIAN Monthly IVA (VATs) Monthly Depends on company’s activities DIAN Monthly ICA (Industrial and Commercial Tax) Monthly Depends on company’s activities DIAN Monthly Withholding Taxes Monthly Depends on company’s services DIAN IVA (VATs) Annual Depends on company’s activities DIAN Annual ICA (Industrial and Commercial Tax) Annual Depends on company’s activities DIAN Annual Withholding Taxes Annual Depends on company’s services DIAN Prima and Vacations Biannual Depending on employee’s start date UGPP Equalization Fund Monthly First week after the salary payment UGPP Cesantías (Severance Pay) Monthly First week after the salary payment UGPP EPS (Health and Pension Contribution) Monthly First week after the salary payment UGPP ARL (Occupational Risk Contribution) Monthly First week after the salary payment UGPP
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