In a recent development, the deputy director of regulations and doctrine of the National Tax and Customs Directorate (DIAN) of Colombia issued an addition to the unified concept No. 106 of 2022 on July 18, 2023.
This new decree further specifies the obligation to invoice the assignment of Exploration and Production (E&P) contracts. While full details of the regulation are unavailable at the moment, its impact on the way multinational corporations and global law firms operating in Colombia approach these contracts is thought to be considerable.
This recent update continues the trend of the Colombian tax authority taking proactive steps to clarify tax legislation, to ensure that local and foreign businesses are fully informed. However, it also represents further complexities that legal professionals and businesses must navigate to ensure compliance.
In light of this development, companies in E&P sectors and law firms advising these entities should reevaluate their tax compliance strategies in Colombia.
Legal professionals can access the official announcement via this link.