The Colombian tax authority (DIAN) recently issued Ruling 531 on 10 July 2024, clarifying tax incentives for businesses in zones affected by armed conflict (ZOMAC).
The ruling details reduced tax rates for new micro and small enterprises in ZOMAC zones, including a 0% rate for 2017-2021, 25% of the standard rate from 2022-2024, and 50% from 2025-2027. It also addresses the corporate income tax credit for VAT paid on qualifying fixed assets, as outlined in Article 258-1 of the Tax Code.
Notably, the ruling permits businesses to simultaneously benefit from both the ZOMAC tax incentives and VAT deductions for qualifying assets, treating these as separate economic acts.
The ZOMAC consists of municipalities identified as being the most impacted by conflict, as determined by the Ministry of Finance, the National Planning Department, and the Territory Renewal Agency. Covering approximately 344 municipalities, the ZOMAC was established by Decree 1650 on 9 October 2017, by the national government.
