On December 28, 2018 Colombian Congress sanctioned Law 1943 of 2018 “Whereby the Congress issues the financial rules for the re-establishment of the General National Budget's equilibrium and sets forth other provisions”.
Law 1943 sets forth, among others, changes related to the administrative proceeding undertaken by the “Special Administrative Unit for Control of Pension and Parafiscal Contributions” (UGPP, for its initials in Spanish). The changes refer to the electronic notification, the reduction of the sanction for not sending required information, and the settlement and termination under mutual consent of administrative proceeding to reduce moratorium interests and penalties.
Article 91 of the Financing Law sets forth that the electronic notification will be the preferential mechanism to notify the administrative decisions issued by the UGPP. To this extent, when the taxpayer reports an email in the Unified Tax Registry “RUT”, the notification will be made to the reported email address.
Regarding the decisions of any administrative remedy, the Financial Law establishes that these decisions must be notified to the taxpayer, in first instance, personally or through edict. Nevertheless, if the taxpayer does not attend the entity within the next 10 days after the notice is sent, the UGPP will proceed to notify the taxpayer by email.
Article 93 establishes that once the taxpayer informs his/her email address, any administrative decision issued thereafter will be notified by email. In case the recipients cannot access to the submitted information, they must inform the UGPP within the next 3 days after receiving the email so the UGPP can send again the information. Notwithstanding, the Law stablishes that the notification will be served on the first date when the email was delivered. Therefore, the term to challenge or respond the email will begin 5 days after receiving the first email.
Sanction for not delivering information
The penalty the UGPP may impose for not delivering requested information is up to 15.000 UVT (for 2019 COP$514.050.000, approximately USD$171.000). This sanction may be reduced considering the gross income of the taxpayer. The reduction may apply provided that the taxpayer delivers all the requested information and pays the penalty within the same month in which the sanction is reduced or on the following month at the latest. This reduction may be between 50% and 90% as follows:
Settlement and termination under mutual consent of an administrative proceeding with the UGPP
The Settlement and Judicial Defense Committee of the UGPP will be able to settle the sanctions and interests resulting from the administrative proceedings carried out by the entity.
To this extent, the Financing Law sets forth that the benefits of settling will be:
- In those administrative proceedings of determination of the contributions to social security (in which it has been filed a lawsuit against the official liquidation of contributions by UGPP before and administrative judge), the benefit implies exoneration up to 80% of interests (excluding the interests from the pension system that must be fully paid) and the exoneration up to 80% of the sanctions for omission or inaccuracy i.
- In those sanctioning administrative proceedings carried out for not sending information to UGPP, the benefit will imply the exoneration of up to 50% of the sanction.
The abovementioned reductions apply whenever the request of termination by mutual agreement: (i) refers to the last administrative decision provided that it was issued before December 28, 2018, (ii) is submitted within the term to file a lawsuit before the contentious-administrative jurisdiction, and (iii) sets forth the obligation to pay the total amount before October 31, 2019.