International Trade 2022

Last Updated September 21, 2021

Colombia

Law and Practice

Authors



Posse Herrera Ruiz includes nine lawyers and finance experts in its customs and international trade practice, and offers advice and legal support to importers, exporters and domestic producers on issues related to foreign trade and customs, designing effective schemes for the operational and commercial needs of customers. The team has experience in issues related to tariff classification, technical regulations and customs assessments, origin provisions, customs penalties, the creation of tax-free zones, Special Import/Export Systems (Vallejo Plan) and free trade agreements. It has taken part as legal counsel for several domestic and foreign companies in different controversies before the customs authority, and in multiple investigations regarding dumping, countervailing duties and safeguards. The firm has experience in advising companies in a wide range of industries, such as pharmaceuticals, oil and gas, infrastructure, telecommunications and consumer products. It recently successfully defended the interests of a client in an Andean safeguard investigation regarding wooden boards.

Colombia has been a member of the WTO since 30 April 1995, and has also signed and incorporated into its legal system some WTO agreements, such as the Trade Facilitation Agreement (2020), by which Colombia recognised that infrastructure is important not only in speeding up the customs process but also in guaranteeing the transparency thereof.

Colombia is party to several regional and preferential agreements. Sixteen free trade agreements (FTAs) have entered into force, with the United States of America, the European Union, the Pacific Alliance, the Andean Community, the EFTA States, the Caribbean Community, Canada, South Korea, Israel, Mexico, Chile, Mercosur, Venezuela, Cuba, the North Triangle (El Salvador, Guatemala and Honduras) and Costa Rica. Colombia also has two FTAs that have not yet entered into force, with Panama and the United Kingdom.

In the negotiation of FTAs, Colombia has agreed to apply preferential tariff treatments for different goods, which are individualised in the texts of the agreements by their own code in the Harmonised Tariff Schedule. Also, in accordance with the Generalised System of Preferences, Colombia has preferences granted by Australia, Belarus, Japan, Kazakhstan, New Zealand, the Russian Federation and Turkey.

Colombia is negotiating FTAs with Turkey and Japan, and is also negotiating entry to the Trade in Services Agreement (TiSA) and the Pacific Alliance, with Australia, Singapore, New Zealand and Canada being willing to enter the agreement.

In the most recent modifications to Decree 1165 of 2019 (Current Customs Colombian Regulation), made in 2021, the Customs Authority took into account the substantiality of the preferential treatment granted in the FTA, indicating, for example, that the formal mistakes contained in the certificates of origin will not be punishable, as long as they are amended within the legal term.

The Colombian government needs to focus its efforts on a public policy regarding the dismantling of illegal and contraband structures, instead of having sanctioning goals that verify formal errors of legitimate businesses. It also faces an important challenge in creating a public policy that allows the facilitation of international trade by reducing import times, eliminating restrictions on international payments, including effective regulation for the fourth industrial revolution and advancing the regulation of trade in services.

The main customs authorities in Colombia are the National Directorate of Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales – DIAN) and the Ministry of Commerce.

The DIAN and the Ministry of Commerce are the authorities that control compliance with customs regulations. Some other authorities intervene in customs control for regulatory matters, such as the National Institute of Food and Drug Surveillance (INVIMA) and the Colombian Agricultural Institute (ICA).

The Attorney General's Office is currently conducting an investigation into smuggling, and initiating a case before the court.

Colombia has regulations related to controlling the negative impact of trade practices in other jurisdictions. It has regulated all the commercial defence instruments against restrictive practices to international trade and against a sudden increase in imports, as investigations of anti-dumping duties, countervailing duties and safeguards.

There is also extensive regulation on unfair competition, which seeks to balance these failures in the markets.

The different affected parties can participate in all these investigation, and the government publishes its findings and investigations so that they can exercise their right of defence in a technical way.

For example, anti-dumping duties are currently in force on ethanol imports from the United States of America, which are currently under jurisdictional control before the State Council.

The last tax reform included a rule related to imports by postal traffic and urgent shipments, indicating that imports of goods valued at less than USD200, from countries with which Colombia has an FTA in force, will be excluded from VAT. This rule currently applies to goods shipped from the United States to Colombia.

See 1.6 Pending Changes to Trade Agreements.

Decree 1165 of 2019 includes an entire chapter related to sanctions, such as fines, the suspension or annulment of authorisation or registration. Infractions are classified as minor, serious or very serious.

The seizure of goods is not considered a sanction under the Colombian customs regime, but the application of the favourability principle is recognised therein.

The Constitutional Court recently declared the Colombian customs sanctioning regime unenforceable because it should be regulated by a Law rather than a Decree (as is currently the case). In that sense, Congress must issue the Law regulating these issues no later than 20 June 2023. 

The National Directorate of Taxes and Customs and the National Bank are the agencies that have the power to impose sanctions in customs and exchange matters.

The Attorney General's Office is currently conducting an investigation into smuggling, and initiating a case before the court.

The National Directorate of Taxes and Customs is the agency that has the power to impose sanctions in customs matters.

In Colombia, the individuals that are subject to sanctions are the declarants in the import regime, the declarants in the export regime, the customs agencies, the public or private depots, the permanent customs users, free trade zone users, port administrators, transportation companies, international shipping agencies, and traders.

The Colombian Customs Authority does not have a list of all sanctioned companies or people, but if the sanction is the suspension of the preferential tariff treatment granted in an FTA, the DIAN publishes a list on its website, which is constantly updated.

Colombian customs regulations do not include embargoes or any other similar sanction against other countries or regions.

Colombia does not maintain any other types of sanctions.

Colombian customs regulations only establish penalties and similar sanctions on international transactions with Colombian entities.

Failure to comply with customs obligations in general is assessed by the DIAN. When the conduct is also considered to relate to contraband, the Office of the Attorney General of the Nation will initiate a case before the court.

The Colombian customs regulation includes a system of prior licences, good records and records that must be obtained prior to the foreign trade operation (import or export) – eg, in matters of products for human consumption, plant varieties and cultural heritage, among others. However, certain goods can only be imported by government entities, such as military armaments, and other goods that are prohibited without any exception.

The Customs Authority, which is in charge of measuring the compliance expectations and standards of liability for violations of export controls, does not make information on such public for all citizens.

In Colombia, individuals and legal entities do not have a general obligation to report any information regarding sanctions imposed by the DIAN. However, the DIAN must report to the Attorney General any conduct that it considers may be considered a sanction.

Current Colombian customs regulations do not have any blocking statues, anti-boycott regulations or other restrictions that prohibit adherence to other jurisdictions’ sanctions.

In the modification to the customs sanctioning regime carried out in 2021, the DIAN proposed the elimination of the imposition of sanctions for formal matters, making the reality of the operations prevail.

A concept was also proposed regarding penalties for errors in electronic computer systems, whether they be the DIAN's own errors or errors by customs users.

The Constitutional Court recently declared the Colombian customs sanctioning regime unenforceable because it should be regulated by a Law rather than a Decree (as is currently the case). In that sense, Congress must issue the Law regulating these issues no later than 20 June 2023. 

Several improvements must be made to the customs sanctioning regime related to the use of electronic systems. The DIAN recently issued a concept on the matter, but this generated confusion. It needs to specify how the causes that exempt customs users from liability operate.

On the other hand, it is very important to regulate the suspension of benefits to specially recognised users (such as Authorised Economic Operators, among others), with a minimum sanctioning process, especially considering that the suspension leads to various negative consequences for affected customs users, such as the payment of higher customs taxes and penalties and default interest.

The general export regime in Colombia is regulated by Decree 1165 of 2019, and its regulations and modifications.

Colombia does not impose any tax on the export of goods but there are some cases not covered by this exemption, such as emeralds, coffee and gold exports.

The DIAN and the Tax and Customs Police (POLFA, for its acronym in Spanish) are the authorities in charge of export controls. Authorisations from other authorities may be required in some specific cases, depending on the nature of the product – for example, Colombian coffee exporters must be registered in the National Federation of Coffee Growers.

The DIAN and the POLFA are the main authorities in charge of export controls, but other Colombian authorities might also be linked in the export process, depending on the nature of the product – for example, the National Federation of Coffee Growers for coffee exports, or the Colombian Agricultural Institute for wild animals exports. In addition, PROCOLOMBIA is an entity that promotes non-traditional exports in Colombia.

All the entities involved in the export chain in Colombia are subject to obligations and the consequent sanctions in case of non-compliance.

It should be noted that only exports of goods are subject to export declaration and customs control.

Colombian regulations do not establish the possibility of creating lists of restricted persons for exportations.

Colombia has specific requirements depending on the nature of the goods, such as wild animals, cultural heritage goods, and food and products for human consumption, among others.

Colombia has specific requirements and controls depending on the nature of the goods, such as wild animals, cultural heritage goods, and food and products for human consumption, among others.

Colombian customs regulations establish customs sanctions on exports in the following cases, among others:

  • where the documents of the foreign trade operation are not kept for the minimum time required by customs regulations;
  • where the export declaration is not presented in a timely manner; and
  • where information requests made by the DIAN are not responded to.

Colombia has specific licence requirements, depending on the nature of the goods. For example, wild animal exports require a licence from the Colombian Agricultural Institute; exports of cultural heritage goods require a licence from the Culture Ministry; the export of food and products for human consumption requires a licence from the National Food and Drug Surveillance Institute; and coffee exports require a licence from the National Federation of Coffee Growers.

The Customs Authority, which is in charge of measuring the compliance expectations and standards of liability for violations of export controls, does not make information on such public for all citizens.

See 4.9 Export Licences regarding the specific export licences required in Colombia.

Due to the COVID-19 pandemic, the National Government of Colombia has granted powers to the customs authority to control and impose limits on exports of inputs and raw materials used for the treatment of COVID-19.

The transitory measures adopted during the start of the health emergency generated by the presence of COVID-19 in Colombia are being eliminated. A new regulation of the free regime on exports and foreign exchange is also pending publication, to facilitate international payments.

The Ministry of Commerce through the Foreign Trade Directorate is responsible for imposing AD/CVD and safeguards measures.

The National Directorate of Taxes and Customs is the governmental agency that enforces the AD/CVD duties and safeguards measures

The regulations establish that any company can submit a petition to the Ministry of Commerce to initiate a review if it fulfils the requirements stated in the regime. The regulations also allow for a self-initiated review.

In Colombia, reviews are not conducted on a regular basis. Most of the time, companies ask the authority for a review when they consider that there is a problem.

Non-domestic companies have the opportunity to defend against the imposition of AD/CVD duties and safeguards measures, according to the national regulation.

The first step is the presentation of a concern to the Ministry of Commerce. An investigation is opened 20 days later, in which the Foreign Trade Directorate reviews whether the request meets all the requirements. The preliminary determination is published by the Foreign Trade Directorate 60 days after the investigation opens, and contains the questionnaires and evidence required to rule a decision. After 90 days, the Foreign Trade Directorate comes to a conclusion, in which it states whether or not it is necessary to impose AD/CVD duties.

The Foreign Trade Directorate sends the reports to the parties interested in the review. The non-confidential report is also published on the Ministry of Commerce webpage, to which everyone has access.

Every trade agreement that has entered into force in Colombia opens the possibility to impose AD/CVD and safeguards measures, in order to protect national producers and companies.

The national regulations establish that every AD/CVD duty and safeguard must be reviewed every five years, starting from the moment the sanctions are imposed.

The process starts with a memo outlining the concerns, which is evaluated by the Foreign Trade Directorate. The agency then makes an announcement to the companies that have an interest in the review. After the parties accept the invitation to participate in the review, they have to respond to a questionnaire, in which they have to provide the necessary evidence to the Foreign Trade Directorate. Finally, the parties' closing arguments are presented in a hearing, and the Foreign Trade Directorate presents its findings and conclusions.

The regulations covering AD/CVD duties and safeguard measures do not contain a process through which any party can appeal the imposition of the duties.

The anti-dumping regulations have recently been modified, with the review process time being reduced from around nine months to approximately six months.

In Colombia, there are no drafts that will change the trade remedies regulations, although there is a strong belief that the present regulations must include appeals of the decisions of Ministry of Commerce, since only having the option to go to the jurisdiction implies that individuals can exercise no effective control when they are adversely affected.

The National Bank is in charge of the process by which foreign investment is made in Colombia. Companies that are willing to invest in Colombia must first register the investment through the National Bank, and then provide the exchange statement. After the authorisation is given, the investor can transfer the funds.

The National Bank, the Superintendency of Companies and the DIAN are the agencies in charge of enforcing investment security in Colombia.

A transaction is subjected to a review when it involves payments or transfers of foreign currency between residents and non-residents of the country.

There are some legal requirements that investing companies have to meet, such as completing and filing the forms required by the National Bank.

Colombian regulations have incorporated the free markets, which are investments that are not necessarily able to be channelled through the exchange market. While these operations are not necessarily able to be channelled through the foreign exchange market, they may be channelled voluntarily.

Companies that violate the exchange rate regime in respect of operations whose supervision and control is the responsibility of the DIAN shall be fined in an amount to be calculated under the provisions of Article 3 of Decree 2245 of 2011.

There are no fees related to the investment security process, so investors do not have to pay extra money to go through the process.

The financial statute contains the Mega-investments regime, in which there is a possibility to subscribe a contract of financial stability if the company makes more property, equipment and infrastructure investments.

There are various ongoing FTA negotiations in which investment security procedures will be included.

The free trade zones have programmes to encourage domestic production, through credits and export benefits.

In Colombia, there is a regulation that imposes a requirement that the tariff of goods produced in the national territory will never be 0% in future FTA negotiations.

Colombia has sanitary and phytosanitary regulations, but their main objective is not to reduce imports nor to encourage domestic producers.

In the Colombian regulation there are lists to determine the customs value of goods, but these never influences the establishment of prices in the internal market.

There are no state enterprises employed by the Colombian government that are aimed towards the reduction of imports.

In Colombia there is a regulation to encourage the domestic production of liquors when the import of such products threatens the domestic production.

Colombia has no geographical protections in order to encourage domestic productions or reduce imports.

There are no other significant issues or developments to discuss.

Posse Herrera Ruiz

Cra 7 No. 71-52
Tower A 5th Floor
Zip Code 110231
Colombia

+57 (1) 325 7300

silvia.velasquez@phrlegal.com www.phrlegal.com
Author Business Card

Trends and Developments


Authors



Posse Herrera Ruiz includes nine lawyers and finance experts in its customs and international trade practice, and offers advice and legal support to importers, exporters and domestic producers on issues related to foreign trade and customs, designing effective schemes for the operational and commercial needs of customers. The team has experience in issues related to tariff classification, technical regulations and customs assessments, origin provisions, customs penalties, the creation of tax-free zones, Special Import/Export Systems (Vallejo Plan) and free trade agreements. It has taken part as legal counsel for several domestic and foreign companies in different controversies before the customs authority, and in multiple investigations regarding dumping, countervailing duties and safeguards. The firm has experience in advising companies in a wide range of industries, such as pharmaceuticals, oil and gas, infrastructure, telecommunications and consumer products. It recently successfully defended the interests of a client in an Andean safeguard investigation regarding wooden boards.

Introduction

Colombia is a country with important comparative advantages in terms of geographic location, natural resources, trained personnel and relative legal stability in Latin America for the development of international trade operations. However, the rates of corporate and other taxes in Colombia are comparatively higher than those of other countries in the region, such as Costa Rica, Mexico, Chile, Argentina, Brazil, Peru and Uruguay. Income-generating activities in Colombia have a current tax rate of 35%. The taxes to take into account in international trade operations are mainly the most-favoured nation applied tariffs, which have an average rate of 9% on the customs value of the goods, and the VAT sales tax, which is generally 19% of the value of the goods.

In this sense, and to be more competitive in terms of taxes, Colombia has a wide range of instruments to promote competitiveness in international trade, which in effect equalise or improve Colombia's position with its peers in the region and internationally. This article will analyse the following five main instruments that companies can use to optimise the payment of taxes and the agility and predictability of operations:

  • Free Trade Zones;
  • Plan Vallejo (inward duty relief programme);
  • Authorised Economic Operators;
  • International Trading Companies; and
  • Logistics Distribution Centres.

Free Trade Zones

According to Law 1004 of 2005, Free Trade Zones are geographical areas located in Colombia, in which different goods, services and commercial activities are developed, under more favourable tariffs, corporate tax and international trade regulations. The World Bank defines the Free Trade Zones as “duty-free areas, offering warehousing, storage, and distribution facilities for trade, trans-shipment, and re-export operations.” According to the relevant regulation, merchandise entering the Free Trade Zones is considered as if it does not enter the national customs territory, meaning it has benefits towards import and export duties.

The Free Trade Zone has many objectives, such as:

  • being an instrument to develop employment and new investments;
  • developing the local region's competitiveness;
  • developing highly competitive and productive industrial processes;
  • simplifying the procedures in which goods and services are sold;
  • establishing and developing scale economies; and
  • developing the regions through attracting foreign investment.

In Colombia, there are three types of Free Trade Zones according to the third section of Decree 2147 of 2016:

  • The Permanent Free Trade Zones (multi-user Free Trade Zones) are areas that are managed by one user/operator but in which many companies can be established and enjoy the tariff and tax benefits.
  • The Special Permanent Free Trade Zones (single-user Free Trade Zones) are special areas in which only one company can be established, and are designed for large projects that generate economic and social benefits to the region.
  • Finally, the Transitory Free Trade Zones are areas of the national territory in which fairs, exhibitions, congresses and national or international seminars are held, which are important for the national economy and international trade since they enjoy special taxes, customs and foreign trade regulations and treatment.

Requirements to be qualified as a user of a Free Trade Zone

According to section 26 of Decree 2147 of 2016, the following general requirements must be met in order to become established in a Free Trade Zones:

  • a new company must be established;
  • the project is financially viable;
  • a detailed description of the investment project is provided;
  • a detailed description of new job generation is provided;
  • the necessary authorisations have been obtained, depending on the project;
  • the equipment that will be used for loading, unloading and weighing goods entering and exiting the Free Trade Zone is listed, when applicable, as well as the necessary equipment for monitoring the entry and exit of goods; and
  • the managing/operator user has been determined.

There are also special requirements to establish each different type of Free Trade Zone, which are found in Decree 2147 of 2016. In general terms, these requirements are the generation of new investments and new jobs.

Benefits of Free Trade Zones

The benefits are as follows:

  • single-income tax rate of 20%, which is 15% lower than the rate in the national territory for other companies;
  • customs taxes (VAT and customs duties) are not accrued or paid on merchandise that is imported to the Free Trade Zones;
  • the possibility to export to third-party countries and the national territory from a Free Trade Zone;
  • foreign goods that are imported to the Free Trade Zone can remain inside indefinitely; and
  • the purchase of goods acquired in Colombia that are necessary for the development of the Free Trade Zone user's corporate purpose, such as raw materials, supplies, parts, finished goods and construction materials, is exempt from VAT.

The Plan Vallejo – Inward Duty Relief Programme

The Plan Vallejo is a duty relief programme to promote international trade operations. In 1967, Colombia incorporated the Special Import and Export System (Plan Vallejo) into the customs regulation through Legislative Decree 444 of 1967. According to the Plan Vallejo, the import of goods such as capital goods, raw materials, inputs and spare parts that are part of the production chain is allowed, with a total or partial exemption or suspension of import duties and taxes. There are three main types of Plan Vallejo:

  • the Plan Vallejo for raw materials and inputs;
  • the Plan Vallejo for capital goods and spare parts; and
  • the Plan Vallejo for the export of services.

The Plan Vallejo for raw materials and inputs allows for the receipt of raw materials and inputs that will be exclusively and fully used within the national customs territory. This modality implies a total suspension of import duties and taxes, deducting the residues and waste in the production of goods intended to be fully exported within a given period. This also applies to goods that, without being directly intended for external markets, will be used by third parties in the production of export goods.

The Plan Vallejo for capital goods and spare parts in the agricultural sector allows the import of these capital goods with total exemption from tariffs and deferred payment of VAT. These capital goods must be intended for the installation, expansion or replacement of the productive units that are to be used in the production process of export goods, or they must be intended for the provision of services directly linked to the production or export of export goods. In the modality set out in section 173 letter c) of Decree-Law 444/1967, only goods of the agro-industrial sector may be produced.

Finally, the Plan Vallejo for the export of services allows the temporary import of capital goods and their spare parts with a total suspension of the tariff and deferred VAT payment for the provisions of exportable services.

The objectives of the Plan Vallejo programme are as follows:

  • to increase Colombian exports;
  • to contribute to the acquisition and renovation of technology in the country;
  • to facilitate innovation processes in production lines;
  • to reduce production costs;
  • to improve the quality of the finished goods; and
  • to allow non-refundable imports.

Requirements for the Plan Vallejo

The main requirements to access the Plan Vallejo are as follows:

  • companies must be registered on the Registro Único Tributario (RUT) as an importer and exporter of goods;
  • the Legal Representatives must not have received any sanctions in the five years prior to the application;
  • the company’s principal economic activity must be related to the export of goods and services; and
  • the company cannot have breached any of its obligations.

Benefits of the Plan Vallejo

The benefits depend on which Plan Vallejo the company accesses, as follows:

  • Plan Vallejo for raw materials and inputs: total exemption from import duties and taxes;
  • Plan Vallejo for capital goods and spare parts in the agricultural sector: total exemption from tariffs and deferred payment of VAT; and
  • Plan Vallejo for the export of services: total suspension of tariffs and deferred VAT payment for the provision of exportable services.

Authorised Economic Operator (AEO)

According to Decree 3568 of 2011, the Colombian Tax and Customs Authority (DIAN) authorises as AEOs those importers, exporters and customs brokers who can demonstrate that they are committed to the security of the entire international supply chain. AEOs must also demonstrate that the supply chain meets the minimum security conditions established by the national government, thereby guaranteeing safe and reliable foreign trade operations. There are two programmes, according to section 5 of Decree 3568 of 2011: the first one is related to facilitation and security, and the second one is related to health facilitation and security. The objective of the AEOs is to enhance the security of the international supply chain and to facilitate the movement of legitimate goods.

Requirements of an AEO

There are some general requirements and some specific requirements, depending on the programme chosen by a company. The general requirements are that a company must:

  • be established in Colombia at least three years prior to the submission of the application and have a Legal Representative in the country;
  • be registered in the RUT;
  • have an effective trajectory in the development of activity for which the authorisation is requested, for at least three years prior to the presentation of the application;
  • have the necessary authorisations from the Colombian Tax and Customs Authority;
  • not have been subjected to any sanctions two years prior to the submission of the application;
  • not have any customs or tax duties and security rates debts, nor any payment agreements to fulfil these obligations;
  • have representatives and partners without criminal records; and
  • demonstrate financial solvency throughout three years of operations.

The specific health facilitation and security requirements are that a company must:

  • not have been subjected to any sanction by the ICA (Colombian Agricultural Institute);
  • be up to date on the payment of the legal obligations and services imposed by the ICA; and
  • not have been subjected to any sanitary sanctions by the INVIMA (Colombian National Institute of Food and Drug Surveillance).

Benefits of being an AEO

There are many benefits of being an AEO, such as:

  • cash flow, because customs tax payments should not be made with each import operation but in a consolidated way within five days of the next month;
  • reduction of timeframes in the logistics chain;
  • competitiveness and security in the chain;
  • not constituting guarantees to support the fulfilment of customs obligations;
  • customs clearance at the declarant’s facilities;
  • submission of the Request for Shipment Authorisation (RSA) at the place of shipment;
  • non-submission of early customs return, when mandatory;
  • tasks of consolidation or deconsolidation of load, transportation of load, or customs agency service through enabled warehouses;
  • the placing of goods in the customs warehousing procedure, once transit, multimodal transit operation (MTO) or combined transportation has ended;
  • consolidated and deferred payment;
  • 50% reduction in the value of rescue of certain goods; and
  • reshipment of goods at the time of customs intervention in the previous and simultaneous control.

International Trading Companies (ITCs)

According to section 65 of Decree 1165 of 2019, ITCs are those companies whose principal economic activity is the commercialisation and sale of Colombian goods abroad.

ITC requirements

The ITC requirements are found in section 66 of Decree 1165 of 2019, and are as follows:

  • the company must be created as an ITC;
  • the company must be registered before the Colombian Chamber of Commerce;
  • the company must obtain the Colombian National Export Registry from the Ministry of Commerce;
  • the application form must be filled out;
  • market research must be elaborated;
  • the company must not have been subjected to any customs, taxes or exchange sanctions; and
  • the company must have made a request at the Ministry of Commerce to be registered as an ITC.

ITC benefits

The benefits of being an ITC are as follows:

  • VAT exemption on purchases of national goods, provided these are effectively exported within the six months after the purchase is made in Colombia;
  • the intermediate services of production provided to those companies shall be exempted from VAT, provided the final good is effectively exported; and
  • the purchase of goods subject to export is not subject to withholding tax.

Logistics Distribution Centres

According to section 91 of Decree 1165 of 2019, Logistics Distribution Centres are authorised public depots located in ports, airports or the Specialised Logistics Infrastructures, in which goods can be stored between different processes. The Logistics Distribution Centres are the intermediaries in the supply chain since they receive, store and deliver goods to other companies or depots. Their objective is to streamline and optimise the distribution process.

Requirements of a Logistics Distribution Centre

According to section 93 of Decree 1165 of 2019, a Logistics Distribution Centre must meet the following requirements in order to be classified as such:

  • be established or have a Legal Representative in Colombia and be registered on the RUT;
  • have operating as a distribution centre as its main economic activity;
  • not have taxes, custom or exchange duties debts, nor payment agreements;
  • have the required physical, administrative, technological, communications and security infrastructure;
  • not have been subjected to any sanction; and
  • have a minimum storage area of 1,000 sq m.

The main benefits of a Logistics Distribution Centre

The main benefits of a Logistics Distribution Centre are as follows:

  • delivery time reduction;
  • costs optimisation;
  • service flexibility; and
  • national and foreign companies are allowed to store goods in warehouses for a term of one year, extendable for up to another year, with the benefit that customs duties and taxes do not have to be paid on the goods during that time.
Posse Herrera Ruiz

Cra 7 No. 71-52
Tower A 5th Floor
Zip Code 110231
Colombia

+57 (1) 325 7300

silvia.velasquez@phrlegal.com www.phrlegal.com
Author Business Card

Law and Practice

Authors



Posse Herrera Ruiz includes nine lawyers and finance experts in its customs and international trade practice, and offers advice and legal support to importers, exporters and domestic producers on issues related to foreign trade and customs, designing effective schemes for the operational and commercial needs of customers. The team has experience in issues related to tariff classification, technical regulations and customs assessments, origin provisions, customs penalties, the creation of tax-free zones, Special Import/Export Systems (Vallejo Plan) and free trade agreements. It has taken part as legal counsel for several domestic and foreign companies in different controversies before the customs authority, and in multiple investigations regarding dumping, countervailing duties and safeguards. The firm has experience in advising companies in a wide range of industries, such as pharmaceuticals, oil and gas, infrastructure, telecommunications and consumer products. It recently successfully defended the interests of a client in an Andean safeguard investigation regarding wooden boards.

Trends and Development

Authors



Posse Herrera Ruiz includes nine lawyers and finance experts in its customs and international trade practice, and offers advice and legal support to importers, exporters and domestic producers on issues related to foreign trade and customs, designing effective schemes for the operational and commercial needs of customers. The team has experience in issues related to tariff classification, technical regulations and customs assessments, origin provisions, customs penalties, the creation of tax-free zones, Special Import/Export Systems (Vallejo Plan) and free trade agreements. It has taken part as legal counsel for several domestic and foreign companies in different controversies before the customs authority, and in multiple investigations regarding dumping, countervailing duties and safeguards. The firm has experience in advising companies in a wide range of industries, such as pharmaceuticals, oil and gas, infrastructure, telecommunications and consumer products. It recently successfully defended the interests of a client in an Andean safeguard investigation regarding wooden boards.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.