Colombia Aims to Full Deployment of Clearance Model by 2019

Francisco de la Colina
May 18, 2017

In line with other countries in Latin America, Colombia opted to roll out e-invoicing on a voluntary basis, coupled with individual mandates to join the e-invoicing framework to specific taxpayers (often within strategic industry sectors or upon exceeding certain annual turnover threshold).

At the end of 2015, Colombia issued Decree 2242 updating their e-invoicing framework. The change meant implementing a clearance model that mandates invoices to be: 1) digitally signed to guarantee integrity and authenticity; 2) issued in xml format; 3) pre-authorized by the tax authority. From November 2015, when the Decree 2242 was published, the possibility to voluntarily join the old e-invoicing framework was shut down for newcomers and the Decree allocated on the local tax authority (DIAN) the responsibility to manage the taxpayers´ timely transition to the new e-invoicing framework.

Remarkably enough, under the rules set out in the Decree DIAN was unable to mandate new taxpayers to adhere to the e-invoicing framework until the regulatory basis for invoice factoring was adopted by the legislative. This regulation was only passed late in 2016, together with a set of legal instruments that constitute a major modification of the Colombian tax legislation. For practitioners and providers in this group, it is worth noting that Colombia is moving towards a general e-invoicing mandate for all taxpayers, intended to be fully implemented by 2019. The system follows a clearance model where pre-authorization of the e-invoice is required for it to be fiscally valid, envisaging the involvement of locally authorized service providers in the e-invoicing workflow.

Compared to other pioneer clearance countries where it took several year to reach full deployment, it is an ambitious plan for Colombian DIAN to achieve that in less than two years. Certainly, technology maturity and experience from nearby countries in the region will speed the adoption process.

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Francisco de la Colina

Francisco de la Colina is a lawyer working on the regulatory team at Sovos TrustWeaver.
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