The Colombian Ministry of Health, through Resolution 385 of March 12, 2020, declared a sanitary emergency throughout the national territory until May 30, 2020, which was first extended until August 31, 2020, through Resolution 844 of May 26, 2020.

Subsequently, a second extension was granted until November 30, through Resolution 1462 of August 25, 2020.

Then, through Resolution 2230 of November 27, 2020, a third extension was granted until February 28, 2021.

Finally, within the aforementioned timeline, the sanitary emergency was extended for the fourth time, until May 31, through Resolution 0222 of February 25, 2021.

Under the sanitary emergency, the National Government has adopted a series of transitory and exceptional measures aimed at mitigating the effects caused by COVID-19.

These measures, although transitory, will remain in force as long as the extension of the sanitary emergency is maintained, since their permanence in time is conditioned precisely to the validity of the emergency.

A nivel de las transacciones de comercio exterior se han expedido varias medidas transitorias que dependen de la emergencia sanitaria, por lo que se mantendrán vigentes hasta el 31 de mayo del año en curso, o hasta antes, en caso de finalizar la emergencia de forma previa.

Some of these measures are described below.

1. UAP and ALTEX

Among the transitory measures is the validity of the recognition and registration of Permanent Customs Users - UAP and Highly Exporting Users - ALTEX, since by Decree 436 of March 19, 2020, it was established that they will continue to be in force for the term of the sanitary emergency.

In this regard, it should be recalled that the UAP and ALTEX ceased to be present in the Colombian customs legal system, as of March 22, 2020, as established by Article 766 of Decree 1165 of 2019, so their current permanence is due exclusively to the exceptional measures adopted by the National Government.

In this exceptional context, it is important to draw attention to the obligation that UAP and ALTEX companies must file the modification of the global guarantee before the Sub-Directorate of Customs Registration Management of the National Tax and Customs Directorate -DIAN, by March 5, 2021, in order to avoid the customs registration being without effect.

Now, companies that carry out cross-border operations have the possibility of requesting before the DIAN the authorization as Authorized Economic Operator - AEO, which although it differs in its conceptualization and scope of the UAP and ALTEX, allows the company, among others, to maintain the benefits derived from the figures mentioned.

2. VAT on the acquisition of chemical raw materials to produce medicines.

Under Article 1 of Decree 789 of June 4, 2020, for the term of the sanitary emergency, chemical raw materials to produce medicines of tariff headings 29.36, 29.41, 30.01, 30.02, 30.03, 30.04 and 30.06, will be excluded from VAT.

In this regard, it should be recalled that Article 160 of Law 2010 of 2019 repealed headings 29.36, 29.41, 30.01, 30.02, 30.03, 30.04 and 30.06 enshrined in Article 424 (Excluded Goods) of the Tax Statute, whose repeal covers the entire article, including its numeral 1:

"Chemical raw materials destined for the production of pesticides and insecticides of heading 38.08 and fertilizers of headings 31.01 to 31.05 and for the production of medicines of positions 29.36, 29.41, 30.01, 30.03, 30.04 and 30.06."

Thus, the sale or importation of the mentioned raw materials to produce medicines of the indicated headings are subject to VAT and will only be temporarily excluded from the tax for the term of the sanitary emergency.

3. Authorization to carry out work outside the free trade zone

When referring to free zones, it is necessary to start from the definition established in article 1 of Law 1004 of 2005, as follows:

"The free zone is the geographic area delimited within the national territory, where industrial activities of goods and services, or commercial activities are developed, under special tax, customs and foreign trade regulations. The goods entered in these zones are considered outside the national customs territory for purposes of taxes on imports and exports".

According to the regulatory framework of the free trade zones, the activities of the industrial users must be developed exclusively from the delimited geographical area, except for specific exceptions, such as partial processing outside the free trade zone.

Notwithstanding the above, within the measures adopted by the National Government, under the sanitary emergency, Decree 411 of March 16, 2020, was issued, which in its article 1 consecrated:

"The free zone operator user, may authorize that the employees of the free zone and of the qualified or authorized users, perform their work outside the area declared as permanent free zone or special permanent free zone, under any system that allows remote work and that involves electronic information processing mechanisms and the permanent use of some means of telecommunication for the contact between the remote worker and the company."

Thus, during the validity of the sanitary emergency, the free zone user companies will have the possibility of requesting the user operator the authorization to implement remote work.

4. Other measures

In addition to the measures mentioned above, other measures of similar importance for foreign trade transactions have been issued, such as:

• Decree 1148 of August 18, 2020, whereby sanitary requirements are established to facilitate the manufacture and importation of products and services to address the COVID-19 Pandemic and other provisions are issued. 

• Decree 551 of April 15, 2020, which establishes a list of goods necessary for the prevention, diagnosis and treatment of COVID-19, which will be exempt from VAT, in imports and sales in the national territory, without the right to refund and/or compensation.

As it has been evidenced, the extension of the sanitary emergency generates effects in the development of foreign trade transactions, so it is advisable that the business community keeps a constant monitoring of its legal and fiscal matrix, in order to accurately identify the term of validity and applicability of the transitory and exceptional provisions, but more importantly, the equally transitory obligations that must be met in their capacity as taxable persons.

Best regards.

Erwin