¿Cuál es el periodo gravable de una sociedad con SEA en Colombia?

According to the Tax Office, the current tax regulations do not include a minimum period of stay or existence during a specific taxable period as a condition to consider the PEM as a domestic entity. 

Therefore, a foreign company that has its PEM in Colombia during a taxable year is considered a domestic entity for the entirety of that taxable year and will be subject to income tax regarding its national and foreign source income.

This implies that, in addition to the formal and substantive tax obligations applicable to a domestic entity, the PEM could also opt for the Simple Tax Regime.

To qualify as an PEM of a foreign company, an analysis of the circumstances is necessary to support that:

  • Colombia is where the commercial and management decisions necessary to carry out the day-to-day activities of the company are materially made, and
  • Colombia is where the company's administrators usually perform their responsibilities.

Now, if a company mistakenly determines that it has an PEM in Colombia, it should be understood that such a company cannot be equated to a domestic entity for the entirety of the taxable year. 

However, if subsequently and in the same fiscal period, the conditions for understanding that there is an PEM are met, it will be considered a domestic entity for the entirety of that taxable year.

Lastly, if a foreign company changes its PEM outside Colombian territory, it will be necessary to (i) update its RUT, otherwise, it would be subject to penalties for not updating the RUT, and (ii) subsequently request its cancellation.

For further information and/or queries regarding any particular topic, we are at your disposal to provide our support.

*Note: The above information is a quick overview of the Tax Service's ruling. Under no circumstances can this newsflash be considered as private advice.

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