Colombia will retain VAT to foreign OTTs on credit cards

Colombian National Directorate of Taxes and Customs (DIAN) warned that it will be able to order different means of payment in the country – including credit, debit and prepaid cards and cash collectors – the 19% VAT retention to international OTTs , which will apply from next July 1st.

‘DIAN, surely, will make a cut when the first two months of the tax payment expire, and in case service providers have not come voluntarily, cards will directly retain the payment’, said Omar Rangel, DIAN’s General Directorate adviser.

According to the entity, OTTs will have to manage the Unique Tax Registry (RUT) to be responsible for the VAT payment. DIAN owns a decree that will be valid in the coming days, which purpose is to make RUT’s registration easier through the internet. It is also working on a regulation to have a special payment network and a simplified form, so that foreign companies can make the tax declaration.

OTTs outside Colombia must pay their taxes bimonthly.  That is, July-August bimester payment must be done in September. However, the Government is working to extend that deadline to November, so that the different companies have enough time to register and adapt their systems and, that way,  implement the tax obligation.