Colombia: Large Taxpayers Classification

Resolution No. 000105, published on November 23^rd, 2020, sets forth the requirements for qualifying as Large Taxpayers as well as the situations that prevents from being classified as such.

The requirements for classification as Large Taxpayer are the following:

a. Be within the taxpayers Group that contributes 60% of the total gross income, at current prices per tax, customs and exchange items during the last 5 years prior to September 30th of the year in which the classification is made. 

b. Entities, or similar to entities, that during the taxable year prior to the one in which the classification is made, obtained net earnings, different from the occasional profits, for an amount equal or greater than 5.000.000 Tax Value Units (“UVT”).

c. Individuals that during the taxable year prior to the one in which the classification is made, reported a wealth equal or greater than 3.000.000 Tax Value Units (“UVT”).

d. Individuals or entities that are part of the Economic Group where the taxpayer that complies with the requirement stated in 1) belongs.

Further, Resolution No. 000105 establishes that the following situations will prevent from granting the Large Taxpayer classification, even if they belong to the group that contributed 60% of the gross collections:

a. Individuals with reported main activities codes: 0010 (Employees), 0090 (Capital Gainers), 0081 (dependents from third parties) o la 0082 (With No Economic Activity) that only comply with 3 above.

b. Foreign Entities with no Colombian address registered in box 67 with code 08.

c. Included in Large Taxpayer classification withdrawal situations detailed below.

On the other hand, the Resolution states that the Large Taxpayer classification – article 562 of the Tax Code – shall be valid for 2 tax periods.

The Resolution describes also the Large Taxpayers classification internal procedure.

Large Taxpayers Classification Withdrawal Situations are as follows:

i. Be under liquidation process.

ii. Have been declared as fictitious provider and/or be under criminal procedure in terms of articles 434 A and/or 434 B of the National Criminal Code.

iii. Commencement of Ownership Expiration Procedure with respect of Large Taxpayers’ assets, or any of the entities that conform the same Economic Group’s

iv. Large Taxpayer’s Decease.

v. Taxpayer being absorbed or dissolved within a reorganization process.