Value Added Tax In Colombia

General Principles

A value added tax (VAT) is imposed on imports and on most goods and services provided by individuals and companies. Businesses are responsible for collecting VAT from their customers and paying it to the government. Businesses are placed in a neutral position since they are entitled to an input tax credit for VAT costs incurred on goods or services acquired in the course of making taxable supplies or services. VAT is a consumption tax, since the consumer bears the cost. Nonresidents are not able to recover VAT incurred.

Mechanics

A record of all transfers of goods and rendering of services must be kept. The law stipulates that a corresponding sales invoice must be issued, regardless of contracts entered into by a company.