OCTUBER 2009 | LEGAL REPORT #10
IMPORTANCE OF UPDATING THE COLOMBIAN UNIQUE TAX REGISTER

Pursuant to article 571 and ongoing of the Colombian Tax Statute ("CTS"), formal tax liabilities in Colombia basically refer to: the filing of all sorts of tax returns (i.e. income, VAT, withholdings), signing such returns, issuance of invoices, and submitting information to authorities by electronic means or in special formats.


Formal tax liabilities and the relevant tax information of the individual/entities ("obligors") in charge thereof are recorded in the Unique Tax Register ("RUT"). After the RUT has been filed, a tax identification number is assigned to the obligor by the tax authorities ("DIAN").

Likewise, the RUT must be updated within one month after the information recorded in it has changed. Not complying with this obligation might trigger expensive penalties which are between $23,763 (approx. US$12*) and $47,526 (approx. US$24) for each day of delay.

At first sight said sanction could be deemed minimal, however, when the multiplication is made according to the corresponding number of days, the final penalty could be huge, specially, considering the tax information which is mandatory to update.

*Amounts in dollars were calculated over a hypothetical currency Exchange rate of 2,000 pesos per dollar. Notwithstanding, please note that the official currency Exchange rate for October 26, 2009, is of 1,924.35 pesos per dollar.

Data which must be updated

Regarding such data pertaining to the RUT, for example the following information, amongst others, must be updated:

A. Data concerning to the obligor's identification. Although usually this information remains unchanged, sometimes it is modified. This is the case for example of foreigners' passport when another is issued.

B. Data regarding the name.

C. Location (country, city, address).

D. Telephone number and e-mail.

E. Main and secondary economic activities.

F. New formal tax liabilities or any change regarding them.

G. Last amendment of bylaws.

H. Change of legal representatives.

I. Modification of partners or of their participation in the capital.

J. Members of the board of directors and any change of them.

K. Designation of new auditors.

L. The economic group situation.

Additional information regarding foreign investors

In addition, please note that currently non resident foreigners (individuals/entities) whose only activity in Colombia is having investments are liable for filing income tax returns and therefore filing the RUT, only if they have received national source income and such income has not been subject to the corresponding withholdings.