Tax Code 
Tax Code
Definition
See
Tax Codes.
Use
When you create a company code using the template for Colombia, the system sets up tax codes that cover various forms of value-added tax (VAT). Within the general system, separate codes are provided for business liable to VAT at the normal rates, exempt businesses, and excluded businesses. Codes are also supplied for the simplified system. In both cases, there are tax codes for provisional tax postings.
General System
Businesses Liable to VAT at Normal Rates
Business that are neither designated exempt nor excluded charge VAT and are able to offset their input tax and output tax. Sample tax codes are provided for VAT and excise duty as follows:
VAT
Transaction |
Description |
Tax rate (%) |
Tax code |
Sales |
Domestic |
15 |
A1 |
Export |
0 |
A3 | |
Export (through agencies) |
0 |
A4 | |
Purchases (goods) |
Imports and other zero-rated |
0 |
V0 |
Domestic |
15 |
V1 | |
Provisional |
15 |
VG | |
Purchases (services) |
Imports and other zero-rated |
0 |
VA |
Domestic |
15 |
VB | |
Provisional |
15 |
VK |
Excise Duty
A sample tax code is provided for excise duty. The code, IC, is for 15% VAT and 40% excise duty over and above that.
Exempt Businesses
Transaction |
Description |
Tax rate (%) |
Tax code |
Sales |
Domestic |
0 |
A0 |
Export |
0 |
A3 | |
Export (through agencies) |
0 |
A4 | |
Purchases (goods) |
Imports and other zero-rated |
0 |
V0 |
Domestic |
15* |
V2 | |
Domestic (specific goods) |
15 + 5† |
V4 | |
Provisional |
15 + 5† |
VH | |
Purchases (services) |
Imports and other zero-rated |
0 |
VA |
Domestic |
15* |
VC | |
Domestic (specific services) |
15 + 5† |
VE | |
Provisional |
15 + 5† |
VL |
* This tax is posted to a VAT expense account.
† The 5% is posted to a VAT expense account.
Excluded Businesses
Transaction |
Description |
Tax rate (%) |
Tax code |
Sales |
Domestic |
0 |
A2 |
Export |
0 |
A3 | |
Export (through agencies) |
0 |
A4 | |
Purchases (goods) |
Imports and other zero-rated |
0 |
V0 |
Domestic |
15* |
V3 | |
Domestic (specific goods) |
15 + 5† |
V5 | |
Provisional |
15 + 5† |
VI | |
Purchases (services) |
Imports and other zero-rated |
0 |
VA |
Domestic |
15* |
VD | |
Domestic (specific services) |
15 + 5† |
VF | |
Provisional |
15 + 5† |
VM |
* This tax is absorbed in the cost of the purchase and posted to the appropriate inventory account.
† The 5% is absorbed in the cost of the purchase and posted to the appropriate inventory account.
Simplified System
Under the simplified system, VAT on all purchases is 7.5%. Separate tax codes have been created to distinguish between goods and services. There are also tax codes for the
calculation of provisional VAT.Description |
Tax code |
Goods |
RG |
Services |
RS |
Goods (provisional) |
RT |
Services (provisional) |
RA |