Value-Added Tax (SAP Library

Value-Added Tax

Use

Value-added tax (VAT) is known in Colombia as impuesto al valor agregado.

Features

In Colombia, the standard rate of VAT is 15%. However, Colombian law designates companies in certain lines of business as being excluded or exempt from VAT, depending on the goods or services involved.

Excluded goods and services (bienes y servicios excludidas) include basic raw materials; medical treatment; and public utilities. Businesses in these lines of business do not charge VAT on their sales, and they are not entitled to recoup input VAT that they have paid on their purchases; this is absorbed into the price of their inventories.

Exempt goods and services (bienes y servicios exentas) include books and magazines of a scientific or cultural nature; and goods for export. Businesses in these lines of business do not charge VAT on their sales, and are entitled to claim back input VAT.

Furthermore, no VAT is levied on exports.

In addition, a special procedure is required for when you purchase goods and services that might be used to produce goods or provide services that are excluded or exempt from VAT. In this case, you have to post, calculate, and report them using a special procedure (see Calculation of Provisional Value-Added Tax).