The Colombian tax authority (DIAN) on 30 April, 2024, released Ruling 305, which tackles various inquiries related to the new regulations affecting non-residents with a Significant Economic Presence (SEP) in Colombia.

Key points Ruling 305 include:

  •   SEP Filing and RUT Registration: Non-residents opting to file taxes in Colombia must register in the National Tax Registry (RUT) and specify their income tax withholding status. If they fail to do so, withholding agents must conduct a due diligence procedure.
  •   Withholding Tax Exemption: Withholding tax agents are exempt from withholding tax if the non-resident supplier declares non-compliance with Physical Employment Status (PES) criteria or requests exemption when filing taxes in Colombia.
  •   Deductible Payments: Payments to non-residents with PES who declare no withholding tax in their RUT are not subject to limitations on deductibility. However, evidence of withholding tax is required if no such declaration is made.
  •   Digital Accommodation Services: Income from real estate accommodation services provided digitally to over 300,000 Colombian clients and exceeding 31,300 Tax Value Units (UVTs) annually is not taxed under PES rules but is considered Colombian source income.
  •   Financial Entities and Withholding: Financial entities lacking information for tax withholding must rely on payment gateways as withholding agents. Evidence of request for information is required, and Decree 2039 of 2023 specifies the order of priority for withholding entities.