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Why Seek Tax Advisory Services in Colombia?

by Accounting Team Colombia | Sep 11, 2020

Colombia is considered one of the most attractive countries in South America to invest and to do business in. However, with an ever-changing tax landscape, it is essential for companies and business owners to engage with a trusted tax advisory services provider. We outline the most important reasons why you must seek tax advisory services in Colombia when doing business in the country. Colombian tax system is complex In Colombia, registration processes at the national level are different from those at the municipal level. As we explored in our article “How to file taxes as a corporation in Colombia”, companies operating in the country are expected to comply with tax regulations on a national, regional, and municipal level. This multilayer of corporate compliance requirements might be challenging for those who are not expert in the field. For example, businesses operating in Colombia should be aware that registration processes at the national level are different from those at the municipal level. Most companies are assigned a National Tax ID number or RUT (Registro Único Tributario) during the national incorporation process. However, they must register before the municipal tax authorities that supervised the territory where they operate. This is to request a municipal Tax ID or RIT (Registro de Información Tributaria). This requirement is commonly overlooked and may cause fines and penalties. To avoid this, you must count on a local tax advisory services provider. Constantly changing tax regulations Colombia is now famous in Latin America for its constant fiscal reforms. A...

Overview of Corporate Tax and Planning in Colombia

by Accounting Team Colombia | Aug 21, 2020

The corporate tax season in Colombia usually takes place between February and June of each year. During this time, companies of all sizes and sectors doing business in the country are encouraged to review their corporate tax expenditure and look for optimization alternatives through corporate tax planning for the next year. Understand why corporate tax planning will maintain your business in good standing while complying with Colombian fiscal policy. What is corporate tax in Colombia and who is subject to it? In Colombia, the general tax rate for 2020 is 32% of taxable income and will decrease to 31% in 2021. As stated in Article 5 of the Colombian Tax Code “corporate tax is based on income, occasional earnings and international transfer of income, as well as on commercial profits in the case of branches of companies and foreign entities”. Likewise, Article 12 of the Tax Code states that entities who are fiscal residents in Colombia are taxed for their global source income, and non-resident corporations are taxed only for their local source income. This means that in both cases, residents and non-residents who receive income in Colombia must comply with corporate tax requirements. However, non-residents usually comply with their corporate tax obligations through the withholdings that fiscal residents are bound to do when making payments to non-residents. In Colombia, the general tax rate for 2020 is 32% of taxable income and will decrease to 31% in 2021. Hotels and hospitals, publishing houses and partially state-owned companies have a tax rate of 9% and the users of free...

What are Companies’ Accounting and Tax Requirements in the Dominican Republic?

by Legal Team Dominican Republic | Aug 8, 2020

When it comes to setting up a business in the Dominican Republic, you must consider all local regulations, including accounting and tax requirements. In this way, you will ensure a smooth market entry and avoid compliance issues. To support your company incorporation and ongoing operations in the Dominican Republic, be aware of and comply with the following accounting and tax requirements. Accounting and tax requirements Executives doing business in the Dominican Republic must be aware of accounting and tax requirements. The Directorate General of Internal Taxes (DGII) is the main tax authority in the Dominican Republic. Tax obligations and rights are established by law and are allocated based on the taxpayer's turn on activities. These are provided from registration to the national Taxpayer Registry (RNC) and must be presented on the established dates. In the Dominican Republic, there are several tax requirements that companies doing business in the country must take into account, such as: IR2- Annual Affidavit of Corporate Income Tax (ISR): Companies that receive income during the financial year must pay 27% on taxable income from legal entities domiciled in the country, this excludes rebates.IR1- Annual Affidavit of Personal Income Tax: Persons who received an income through wages or investments, loans, property, or services must file for the deadline of March 31st each year. ACT-Taxable Assets: Applicable property assets are taxed by 1% on the total value of the property held by the taxpayer. The tax payable must be paid in two equal instalments. ITBIS-Tax on the...

What are the Accounting and Taxation Requirements in Bolivia?

by Accounting Team Bolivia | May 5, 2020

Expanding multinationals must understand and comply with their accounting and taxation requirements in Bolivia. This is crucial for business success when setting up and operating commercially over the long term. Failure to comply with local accounting and tax obligations could result in financial or other sanctions. We give an overview on the accounting and tax obligations in Bolivia for business. Of course, it is highly recommended to engage with a local bilingual accounting expert in the country to support your business. What are the tax rates in Bolivia? The value added tax rate is 13%, which is a low percentage compared to other countries in the region. Your company will primarily be subject to corporate income tax, value added tax (VAT) and social security contributions in Bolivia. Below is a list of aspects to consider when it comes to taxes in Bolivia: The value added tax rate is 13%, which is a low percentage compared to other countries in the region. It does not apply to all export products and services.The capital gains tax rate is 25%, but it is exempt from the payment of transaction tax in the Bolivian stock market.The tax rate for establishing a branch of a company in Bolivia is 12.5%. The tax year varies depending on the activity of the company: Banking, commercial, and service activities have a fiscal year of 31 DecemberIndustrial, oil and gas companies have a fiscal year ending 31 March; Agro-industrial and forestry companies have a fiscal year ending 30 JuneMining companies' fiscal year ends 30 September. Each company must appoint an auditor to...

Corporate Legal Compliance in New Zealand

by Legal Team New Zealand | Jul 30, 2019

The world bank advocates New Zealand for the easiest country in the world to do business in 2019. The strong economic and regulatory environment allows the country to provide entrepreneurs and investors, including foreigners, a great opportunity to start their commercial journey. Migration steps are easy to comply with and the process of establishing, owning and operating your business can be completed through government applications such as online portals. Find out what you need to know in terms of your responsibilities when setting up a business in New Zealand. Overview: Tax and Accounting in New Zealand Tax is compulsory in New Zealand, therefore, anyone that earns money in the country has to pay income tax. This includes businesses, contractors and those who are self-employed. Income tax can be pre-paid. This is known as provisional tax and contributes to annual tax paid in several installments. However, Inland Revenue, the local department that handles tax for the government, notifies the company or the person to do this. Incorporating a company When incorporating a company into New Zealand, the company must reserve a company name. The New Zealand Companies Act expresses that a company must have an official registered office address in New Zealand. Therefore, a registered office must be provided however if the new business has not yet got a physical presence in the country. There are solicitors and accountants available to provide the service needed for the growing company. There must be at least one shareholder with a share capital of NZ$1. In addition, all...

What Are the Key Corporate Tax Considerations in Chile?

by Legal Team Chile | Apr 20, 2019

Chile is one of Latin America's strongest economies and is high on investor's radars when considering places in the region to start a business. The legalities for running a business in Chile are similar to other Latin American countries across the board. However, there are a few differences concerning taxes, documentation, and licensing that are important to note in your research of Chilean business practices. These differences may lead to penalties or fines when they are not taken into account. Chilean companies do not require a fiscal auditor by law. However, a yearly audit of your company, in the case of mergers or acquisitions, is required by law. Moreover, companies often set this standard as a company policy. Read on to learn about the requirements and important considerations regarding taxation in Chile. Corporate Taxation in Chile - Direct and indirect taxes The Chilean tax authorities, Servicio de Impuestos Internos (SII), divides tax declarations into two groups. These groups are: Direct tax: this tax is an income tax Indirect taxes: this tax is the Value Added Tax (VAT). VAT is a consumption tax incorporated into the value of goods and services whenever a value is added at any stage of the supply chain. Direct taxes are divided into two types of taxes. These two taxes are made up of: A corporate tax. An employment tax. These taxes are paid monthly but are made up of totally different considerations. However, a comparison can be made in the need to pay. Both taxes need to be paid every month in the same affidavit. This payment needs to be made online at the...

What Are the Business / Company Accounting Requirements in Colombia?

by Legal Team Colombia | Aug 6, 2018

Colombia has proven time and time again that it is an excellent jurisdiction to do business. The economy is growing steadily and, according to reports, will continue expanding in the coming years. More and more investors are coming to Colombia and taking full advantage of all the many commercial opportunities the country has to offer, as well as the more open governmental policy of the last few years. When you decide to incorporate a business in Colombia, you will become part of the Colombian tax system. Determining how much tax you must pay can be slightly complicated, due to different tax brackets for residents or foreign companies. For this reason, it is advantageous to partner with a local agent who can assist you in complying with the accounting tax requirements in Colombia. Business Accounting Requirements in Colombia - The International Financial Reporting Standards in Colombia - 'IFRS' The IFRS is an organisation that establishes a globally recognised accounting standard which is renowned for its simplicity of enforcement. Applicable in Colombia, it is important that you ensure any accountant that you work with complies with these standards, as it will make accountancy management much easier for you as a foreign investor. Business/Company Accounting Requirements in Colombia Taxable Income In Colombia, you will need to pay taxes on the taxable income of the company. The taxable income is the gross income of a company minus the returns, rebates, discounts, and all other ordinary costs incurred in deriving net income and allowable deductions. The rate of taxable...