Tax penalties

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Tax penalties are fines or penalties applied to taxpayers when, by action or omission, they fail to comply with or evade a tax obligation.

In Colombia, compliance with tax obligations is essential for the proper functioning of the State and the financing of public services. For this reason, there are tax penalties for those taxpayers who do not comply with their tax obligations. The DIAN is the entity with the powers of inspection and investigation to ensure that taxpayers comply with the substantive rules.

What are the tax penalties?

Tax penalties may be of different types and severity, depending on the offense committed. One of the most common penalties is the penalty for untimeliness, which is applied when a taxpayer does not file its tax return on the date established by law. In this case, the penalty may be 5% of the total value of the tax payable for each month of delay, with a limit of 100% of the tax payable.

Another common penalty is the inaccuracy penalty, which is applied when a taxpayer files a tax return with false or inaccurate information. In this case, the penalty may be 160% of the value of the tax payable, plus interest and penalties for late payment.

There are also penalties for omission of assets, failure to keep proper accounting records or failure to issue invoices. These penalties may vary according to the type of offense committed and the seriousness of the offense.

It is important to mention that in addition to the aforementioned sanctions, the statutory law contemplates others. However, they must always be expressly stated in the law.

Finally, tax penalties not only have a financial impact on the taxpayer, but can also have legal and reputational consequences. For example, in extreme cases of tax evasion or fraud, the taxpayer may face criminal charges.

It is therefore essential that taxpayers comply with their tax obligations and avoid incurring tax penalties. To this end, it is important to have good accounting and tax advice that will allow you to comply with your tax obligations in an effective and timely manner.

In conclusion

Tax penalties in Colombia are a mechanism to ensure compliance with tax obligations and to finance the State’s public services. It is important that taxpayers comply with their tax obligations and avoid incurring penalties, as these may have financial, legal and reputational consequences.