Tax incentives in the IT sector in Colombia

In order to take advantage of the digital content industry great potential in Colombia, some tax incentives have been established recently. The Ministry of Telecommunications and Information Technology together with the tax administration -DIAN and the Ministry of Finances decided to exonerate from the Value Added Tax – VAT the software and digital courses that are necessary for the development of digital contents.

In this context, Article 187 of the last tax reform (Law 1819 of December 2016) exonerates from VAT the following services:

  1. Virtual education services for the development of digital content provided in Colombia or abroad, in accordance with the regulations issued by the Ministry of Telecommunications and Information Technology.
  2. The provision of web pages, servers (hosting), cloud computing and the remote maintenance of programs and equipment.
  3. The acquisition of software licenses for the commercial development of digital content, in accordance with the regulations issued by the Ministry of Telecommunication and Information Technology.

Most recently, Decree 1412 of August, 2017 regulates the exclusion of VAT for the creation of digital content and defines the scope of the exoneration for services in the cloud. The exemption is granted on the basis of a certificate issued by the Ministry of Information and Communication Technology. Such certificate must desmostrate that the service meets the characteristics established in decree 1412 of 2017.

On cloud computing, DIAN has issued Concept (820) 17056 of 25 August 2017 on the definition of cloud computing, hosting service and remote maintenance of programs and equipment.

Communication and information technology services are being strongly promoted by the national government. In the event of the closing of the TIC Andicom 2017 Congress, President Juan Manuel Santos announced the creation of the Vice-Ministry of Digital Economy and the start-up of the Digital Citizen Services.

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