In Colombia, in accordance with the current tax regulations, technology transfer agreements, license and royalties, trademarks, patents, technical assistance, technical service, basic engineering agreements, must be filed for registration with the National Tax Administration -DIAN.
This is an essential requirement for the deduction from income tax, of the payments made by the licensee to its licensor.
Since November 3, 2011, the Colombian Government considered that for control in tax, custom and exchange matters purposes, it was necessary to assign to the Colombian Tax Administration (hereinafter DIAN), the competence to register the type of agreements mentioned before.
Usually, the term of the agreement registration runs from the day it is registered until the day the agreement ends or until the interested party terminates the registration voluntarily. Furthermore, if the agreement was modified, the interested party must submit a new registration with identical requirements and documents needed for the initial registration, for which it must request the voluntary termination of the previous registered agreement.
A private party filed a nullity request against this provision, considering that different treatment were given those registrations that took place before 2011 against those the registered before DIAN, because the first ones required a second registration at the end of the validity of the registration, this being a complex and unnecessary procedure, that determines the origin of the deduction for payments made abroad in development of the Importation of Technology agreements.
In other words, there is discriminatory treatment against importers who registered its Importation Technology agreements of undetermined amount before November 3, 2011, compared to importers whose registration of its Importation Technology agreement was made before DIAN and was granted for the same validity of the contract, which do not have to made the registration again.
By Judgment No. 233344, of November 28, 2019, the Colombian Council of State declared the nullity of the said stipulation issued by DIAN, since it provided an obligation to renew the Importation of Technology agreement import of an undetermined amount. This judgment is of utmost importance, since it clarifies that the Importation of Technology Agreements of undetermined amount registered with the VUCE before Nov 3 2011, were not subject to renewal or a new procedure before the DIAN to maintain the registry and ensures the deductibility of the expense incurred abroad by these type of concepts.
Consequently, for those tax claims in which the deduction in the income tax and the payment of royalties, of the payments made by the taxpayers abroad, for the importation of technology is debated, there will be no place for this payment or any sanction by the DIAN.
Juan Carlos Uribe, IDI franchising country expert for Colombia