Colombia: Electronic Payroll as support document for Tax Declarations

Currently employers can deduct labour costs for income tax declarations without an electronic invoice. However, since January 2020, an electronic invoice was required to prove the origin of deductible taxes and deductible costs or expenses. Therefore, the maximum percentage that could be discounted without an electronic invoice was set as follows:

As a result, taxpayers who make payments or account deposits derived from an employment contract or to retired workers (pensioners) will be required to generate the electronic payroll payment support document in order continue deducting labour costs in higher percentages than those mentioned.

• Who would have to implement it? Those taxpayers that make payments or credits into an account derived from a labour, legal o regulatory relationship and likewise, or to retired workers (pensioners) who need to bear the costs and deductions in income and complementary tax.
• Since when would it have to be implemented? The deadline to start the issuance of such a document will depend on the number of employees the employer has.
• How often would it be necessary to present the electronic payroll to DIAN once its implementation starts? Deadline transmission begins the first ten (10) days of the following month.

Nonetheless, the project pends National Government regulation, therefore, it is not presently enforceable.

For more information on these articles or any other issues involving labour and employment matters in Colombia, please contact Alejandro Castellanos (Partner) of López & Asociados at alejandro.castellanos@lopezasociados.net or visit www.lopezasociados.net