Requirements to declare income in Colombia

15 minutos de lectura

Did you know that the income statement is a record or report that natural persons, employees or independent persons must present to the National Tax and Customs Directorate, better known as Dian, detailing their financial situation? You must take into account income, expenses, debts, withholdings, investments and assets. If you wonder if you should declare the income, we answer all your questions in the following article. Know the Requirements to declare income 2018.

Before you start talking more about the income tax return, it is important that you know what it is Income Tax.

Rather, the return is the information that Dian needs to calculate income tax.

However, What is income tax?

It is the tax that all taxpayers must pay on the profits or income they achieve during a given year.

The criteria that must be taken into account when determining the amount of income to be declared are, as we said before:

  • Heritage
  • Income
  • Financial movements
  • Taxpayer group to which it belongs.
  • Identify the limits that exonerate them or enable them to pay taxes

Why must income be declared?

Knowing then what income tax is, you should also know that the Ministry of Finance at the end of 2017, created the Decree 1951.

This decree defines the places and deadlines for the presentation of tax returns. As well as the payment of national taxes during 2018.

In addition, every natural person must declare income tax if it exceeds certain amounts that the law determined with the decree.

Natural persons are divided into two groups:

Those that are required to declare income and those that are not required to declare income.

Who must declare the income?

As was done in 2017, the terms to declare income will be made descending.

They start with the last digits of the tax identification number (NIT) with numbers 99 and 00, and ends with numbers 01 and 02.

If you want to know if you must declare your income this year, you must do an analysis of all your money during 2017. After reviewing your salary flow, check the requirements to know if you are one of the people required to declare.

Requirements to Declare Income

All those people who during the past year must declare income:

  • They had a heritage greater than 143,366,000 pesos.
  • Their income totals were greater than 44,603,000 pesos.
  • They made credit card payments greater than 44,603,000 pesos.
  • They added 44,603,000 pesos in purchases and consumption.
  • That the total value of your bank consignments, deposits or financial investments are greater than 44,603,000 pesos.

NOTE:

If your income during 2017 was less than 44.6 million you should not present the report to Dian.

However, if 80% of your income comes from a labor contract and your salary is equal to or greater than 44,603,000, you will have to declare income this year 2018.

If you meet only one of these conditions:

Irremediably you must present your income statement.

If you do not meet any, then you are not required to declare.

IMPORTANT:

Filing the return does not necessarily require you to pay income tax.

If you did a good tax planning and have all the supports at hand, you can make the presentation of your return come out as favorable.

When we refer to supports, we speak of records of payments to medicine, housing, payments to relatives that depend economically on your financial status and other justification reasons.

For Natural People

Everyone must calculate their income to know if they need to declare their income or not.

The requirements are the same for everyone.

REMEMBER:

The norm of Decree 1951 indicates that wage earners whose income is, at least, in a large number of payments originated in a labor or legal and regulatory relationship are not in the obligation to declare income.

As long as, in relation to the year 2017, the requirements are fully met:

  • That the heritage on the last day of the year 2017 do not exceed 4,500 UVT, that is, 143,366,000 pesos.
  • Gross income are less than 1,400 UVT, 44,603,000 pesos.
  • Consumption by credit card do not exceed 1,400 UVT, 44,603,000 pesos.
  • Total value of purchases and consumptions do not exceed 1,400 UVT, 44,603,000 pesos.
  • The total accumulated value of bank consignments, deposits or financial investments do not exceed 1,400 UVT, 44,603,000 pesos.

For Legal Persons

Through Decree 1951, Dian regulated and clarified different aspects that may affect the preparation of the income and complementary tax declaration of legal persons for the taxable year 2017.

The same way, the requirements remain the same as stated above.

What does it mean?

In one of the articles of DUT 1625 of 2016, which was modified by Decree 1951 of 2017, it is established that the term to pay tax returns whose balance is less than 41 UVT is the same as that stipulated for submitting them.

It is indicated that the total payment must be made in a single installment.

Taking this into account, the Dian through its Resolution of November 2017 set the UVT for 2018 at a value of $ 33,156,

Therefore, in the tax returns for the year 2017 with a balance lower than $ 1,359,000, the payment must be made in full no later than the date on which the term to declare expires.

The data recorded in the income or income and wealth declaration must largely coincide with those reported in the information for the year 2017.

What is UVT?

In case you don’t know what UVT is, it is the Tax Value Unit that represents the tax values ​​that were previously expressed in pesos.

Its purpose is to standardize the different tax values.

Is UVT important?

Yes. It is extremely important.

The government is responsible for updating the UVT to determine the new value in pesos. This measure takes inflation into account, while facilitating its imposition and agility in the calculation, making it more accurate.

Steps to declare income

  • Should I declare?

First of all, as we have said before, you have to check if you must present your income tax return. Taking into account the 1951 decree adjusted in previous months.

Check if you are one of the people who must declare the income. Check our point of “requirements to declare income”.

You know, if your income exceeds any of the income, equity, consignments, purchases or consumption limits or you belong to the common VAT system, you will have to make the 2018 income statement.

  • Sign up or update the RUT

You should only update the RUT in case you have modified any data.

Also in the event that you require additional responsibilities such as the obligation to present income and supplementary returns.

What is the RUT?

The RUT It is the Single Tax Registry, it is a unique mechanism to identify, locate and classify people and entities that have the quality of taxpayers declaring income tax and non-taxpayers declaring income and assets.

  • Identify the type of income by identity card

There are 5 types of identity card to make the 2018 income statement:

Income from Work, Income from pensions, Income from capital, Non-labor income and Others.

Earnings from work have:

  1. Wages
  2. Commissions.
  3. Social benefits.
  4. Travel expenses.
  5. Representation expenses.
  6. Fee.
  7. Pay ecclesiastical.
  8. Compensations received for cooperative associate work.

NOTE: In no case may income from fees received by natural persons who hire or link 2 or more workers for at least 90 days be included.

Pension income:

  1. Retirement pension.
  2. Disability.
  3. Old age.
  4. Survivors
  5. Occupational hazards.
  6. Substitute compensation for pensions.
  7. Returns of pension savings balances.

Capital income:

  1. Fees of natural persons who provide services and hire or link for at least 90 continuous or discontinuous days, 2 or more workers or contractors associated with the activity.
  2. All other income that is not expressly classified in the other certificates.
  • Fill out the natural income forms
There are two types of forms: Form 210 or Form 110. You must fill them out depending on your return.
  1. Form 210: Declaration of Income and Complementary Individuals and Assimilated Persons not Obliged to keep accounting.
  2. Form 110: Declaration of Income and Supplementary or Income and Patrimony for legal persons, whether national or foreign, and for natural persons or non-resident inheritance.

I do not understand if I have to fill out form 210 or 110

The form 210 It is filled out by people classified as self-employed who are going to declare by the IMAS system.

The alternative income in 2016 must be less than 27,000 UVT $ 803,331,000 and the liquid equity declared in the previous taxable period must be less than 12,000 UVT in 2015, that is, $ 339,348,000.

However, it is important to clarify that self-employed workers who opt for the IMAS, are not required to file the declaration by forms 110 or 210.

Now him form 110 It is filled out by natural persons classified in the category of employees or self-employed workers who are obliged to keep accounting books.

  • I declare and if applicable, payment
The obligation to declare is different from the obligation to pay. Regardless of whether your statement shows a balance to be paid or not.
That is why it is important to present the income tax return within the stipulated deadlines, so as not to incur an ex-temporary penalty.
To make the 2018 income tax return, You do not need to go to the contact points of the National Tax and Customs Directorate – Dian-, since it is possible to use the online services of the same address.
  1. Registered users: If you are a registered user of Dian’s online services, you can complete your form either as a virtual user or not, and even pay online.
  2. New users: If you are not yet registered in Dian’s online services, you can do so by enabling your account. This option allows you to create an account to become a registered user.
  3. Unregistered users: You can fill out your forms without having to enable accounts, without passwords, using this option. It was designed to facilitate the procedure for those who have been doing it regularly on paper forms.
  4. Paper form: If you cannot make use of the previous options, you can acquire the physical form at no cost, at the different Dian contact points nationwide.

How much must be paid?

The cost of the contribution it is not subject to any limits.

In this case, it gives many people the option to save and improve their future pension amount through this savings or to be able to access an early pension.

If the worker decides to make his voluntary contributions to a voluntary pension fund, up to 30% of his income is considered an exempt income, with a maximum ceiling of 126 million pesos per year.

When must the income be declared?

The Ministry of Finance and Public Credit placed, as we have said, in decree 1951 of November 28, 2017 the following:

Said decree establishes the places and deadlines for the fulfillment of tax and formal obligations in 2018.

Also, the maximum term for taxpayers who choose the form of payment of works for taxes, comply with the obligation to deposit the total amount of the value of taxes to be paid.

The deadlines to declare the rent between August and September are left in the following image:

Starting with 99 and 00 on August 9 and then going down the others in the following days. The date ends on September 28 with the digits 30 and 29. The rest go to October.

What happens if I do not declare the rent?

When you don’t pay a tax on time, clearly there are surcharges or penalties from the government.

The income statement also has economic and tax implications, if you do not submit it when you should. That is why a deadline is established to cancel it.

WATCH OUT:

For example, if you think that you will be able to respond directly to the Dian with income tax, if you still do not know when is the due date to do so or if you simply do not know whether or not you should file the return, you should be very careful .

If you must declare and do not do so or do it outside the established time, it is likely that you will have to pay and be subject to a penalty.

People who do not submit the declaration and are obliged to do so, are in default by not declaring. The tax administration has up to 5 years to carry out a liquidation of capacity

What is a capacity clearance?

It is a liquidation carried out by Dian to determine the tax liability of the taxpayer.

In addition to the payment of the fine for not declaring, which in the case of income tax, the penalty is equal to the higher value between 20% of the gross income that you have had or the gross income of the last income statement that you have presented to the administration.

Watch the following video so you can better understand what would happen if you don’t pay your rent in the stipulated time.

Delay:

The expiration dates for the income statement begin on August 12 and end on October 22, for natural persons.

The person who does not present or does not declare in the stipulated time will have, as mentioned, a penalty for extemporaneousness.

Which means that you must pay 5% of the tax in charge resulting from each calendar month or fraction.

That is, if you had a deadline to declare and pay your income tax return until August 12, and you file it on August 15, then you will have to pay the late payment penalty.

This is why it is important that you inform yourself and check the payment due date.

If you are forced to pay or not and get the budget to pay your tax obligations, it can be more expensive.

TIPS:

We leave you some tips that you should take into account when calculating the payment of your rent, in this way, you will avoid inconveniences or penalties.

The first thing everyone should do is check the payroll support.

What’s that?

  • Review payroll support: It is important that you verify which withholding procedure you are in and what is the percentage of deduction that they are applying to you.
  • Document yourself and get good advice: If you find that you have a high discount for withholding tax or its conditions, you are obliged to declare income.

The best thing you can do is identify if you meet any requirement that allows you to reduce withholding or the possible payment of taxes.

  • Among the options there are for lower your withholding tax and income tax There is the one that you have dependents in your charge.

That is, there are several dependency figures as mentioned below.

  • If you pay for your home Through a mortgage credit, the interests associated with that credit have a tax benefit.
  • Payment of prepaid medicine own or family. Wife and children have a deduction of up to $ 530,000 per month.
  • Voluntary contributions: These contributions have a great tax benefit and their tax treatment depends on whether the contribution is made in a voluntary fund or in a mandatory fund.

If the contribution does In a mandatory fund, this is considered an income that does not constitute income or occasional profit.

This means that they are tax-free, as long as they are for an eminently pension purpose.

However, you can also reduce the payment of your income statement.

How do I lower my income tax?

In case last year you have:

Promotion. You did a good deal. You made an extra income.

If so, it is likely that this year you will have to file your income tax return.

If you have already done the calculations to know if you have to pay or not, you must remember that:

It is one thing to declare and another, very different, to have to pay the tax derived from that declaration.

We know that this process is usually tedious.

Even. You come to question why you have to pay these taxes to the government. With those income you have earned from your hard work.

Remember: filing is not the same as paying income tax.

The declaration is the presentation of the format before the Dian.

In it, the income from salaries, interests or inheritances, the assets or debts and expenses that it has acquired in the last year are specified. The other corresponds to a payment.

The fact of delivering this document does not necessarily mean that you have to pay the tax

Now, if you have to pay, you can make that payment decrease:

There are three systems to calculate income tax according to the category to which you belong.

  1. Ordinary system. It is the best known and serves both natural and legal persons.
  2. IMAN, National Alternative Minimum Tax. For natural persons who classify as employees.
  3. IMAS, Simple Alternative Minimum Tax, also for employees; unlike that this is voluntary, while the IMAN is mandatory.

In the last year, according to the director of DIAN, 2,085,000 Colombians declare income.

For this, we give you some solutions.

You will be able to reduce the payment of your income tax and thus save or alleviate finances a little.

  • For exempt labor income. This means that for some reason you received compensation for work accidents, maternity leave, income or interest for severance pay and for pension payments. In these cases, 25% of withholdings for labor payments are deducted.
  • Mandatory contributions to the social security system: When you pay your social security on your own.
  • Dependents: The people who are in charge of the employee and who, as their name indicates, depend on them, are taken into account.

For example, another case.

If you have a child with a physical or psychological disability. If yes, then you also have to report it. This, so that they make the respective deduction.

  • Payments for private health: when you make payments to a prepaid medical entity.
  • Mortgage credit: If you have acquired a loan for a while to buy your home, you know that they charge you an amount of interest for it. These expenses are part of the benefits.
  • Donations: Contributions in donations to an NGO, foundations or religious entities that are legally certified are also contemplated in the law as a reason for deduction.
  • Payments made to domestic service employees: If you have a general service employee hired in the home and you are also paying social security.
  • Voluntary contributions to Pension Funds or AFC accounts: These contributions are a kind of long-term savings so that you can invest in goals that you have wanted for a long time.

In any case, you should consult or get advice from a person who knows about the tax statute to guide you. Since you know the requirements for declare income 2018, find out if you are one of the people who must declare. Follow the corresponding steps.

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