Tourism Law In Colombia And The Tax Benefits

Miguel Torres Ruiz

Partner, AL Partners

The last 31st of December 2020 the Colombia Government issued a modification of the Law 300 of 1996 through the tourism law 2068 of 2020, that has the principal purpose of promote sustainability implement mechanisms for the conservation, protection and use of tourist destinations and attractions, as well as strengthen the formalization and competitiveness of the sector and promote the recovery of the tourism industry, through the creation of incentives, the strengthening of quality and adoption of measures to drive transformation and opportunities in the sector.

The new Law establish new guiding principles as follow:

  1. Social, economic, and cultural development: Tourist activity, conform to article 52 of the Political Constitution, it is a social and economic right that contributes to the integral development of people, sentient beings and territories and communities, which encourages the use of free time and revalue the cultural identity of communities and It is developed on the basis that every human and sentient being has the right to a healthy, productive life in harmony with nature.
  2. Sustainable development. Tourism activity is a social right of the people, which contributes to the well-being of the human being and is developed in observance of the principles of sustainable development.
  3. Universal Accessibility. It is the duty of the tourism companies, to tend, in accordance with article 13 of the Political Constitution, for the elimination of spatial, physical environment, communicative, attitudinal and service barriers that impede access, use and enjoyment of the tourist activity in a safe and comfortable way.

Tourist provider services and tourist quality

In order to ensure that both the provision of tourist services and the tourist destinations comply with quality, safety and sustainability standards, the Ministry of Commerce, Industry and Tourism will determine quality levels taking into account the size and capacities of the service providers.

Tourism promotion program aimed at Colombians residing abroad.

The Ministry of Commerce, Industry and Tourism, Procolombia and the Ministry of Foreign Relations, within the framework of the “CO-nectados” and “Colombia Nos Une” programs, will establish tourism promotion mechanisms aimed at Colombians residing abroad; in order to encourage migrant nationals to travel to the country and enjoy tourist services in the national territory.

There will be dissemination of the main cultural events in Colombia, its tourist attractions and incentives will be promoted for the visit with special emphasis on the different cities of the world where this population is most concentrated.

Parafiscal Contribution for Tourism.

The Government creates a parafiscal contribution for the promotion, sustainability, and tourism competitiveness. This contribution will in no case be transferred to the user.

The generating event of the parafiscal contribution for tourism is the provision of tourist services or the performance of activities by the subjects who benefit from tourist activity as provided in article 3 of Law 1101 of 2006.

Special obligations for electronic operators or digital platforms for tourist services.

The Electronic operator or the digital platforms for tourist services that are provided and /or enjoyed in Colombia is a provider of tourist services, and in this sense, they will have the following special obligations:

  1. Have an active and current registration in the National Tourism Registry.
  2. Interoperar con el Registro Nacional de Turismo en los términos y bajo las condiciones definidas por el Gobierno nacional en desarrollo de la política de Gobierno Digital para que quien utilice la plataforma cuente con inscripción activa y vigente en el Registro Nacional de Turismo. Para este efecto, la plataforma electrónica o digital deberá habilitar un espacio en el que el prestador de servicios turísticos haga visible su número de inscripción en el Registro Nacional de Turismo.
  3. Enable the necessary fields for the tourist service provider that uses the platform to report the services offered and the conditions, as well as the confirmation and cancellation policies. This information may be consulted by whoever has bought a product in order to file a complaint or claim and must be provided to the competent authority when requested.
  4. Not to publish or withdraw or eliminate advertisements and / or offers from tourism service providers that do not have an active and current registration in the National Tourism Registry, or when requested by the inspection, surveillance, and control authorities.
  5. Deliver to the Ministry of Commerce, Industry and Tourism the information of the tourist service providers that use the platform. This information must be sent when the Ministry of Commerce, Industry and Tourism requests it for statistical purposes, in the exercise of its powers.
  6. Deliver the information required by the inspection, surveillance and control authorities, as well as the tax inspection authorities, in the exercise of their powers.
  7. Have mechanisms for handling requests, complaints and claims for tourism service providers and tourists.
  8. Pay the parafiscal contribution for the promotion of tourism, according to the mechanisms or procedures determined by the national government for its inspection and collection.

Tax incentives for the promotion of tourist activity

With this new law also was incorporate some additional tax benefits as follow:

  1. Modification of Article 211 of the Tax Code: Tourism service providers with active and current registration in the National Tourism Registry, who develop as their main economic activity any of those described below, will be temporarily exempt, until December 31, 2021, from paying the surcharge or special contribution in the electricity sector.

For the application of the benefit, the user providing tourist services must develop tourist activity in an open business establishment to the public, duly accredited by registering in the Registry Trade.

2. Modification of Article 240 of the Tax Code: Some specific activities will be subject to income tax at rate of 9% related to tourism. Also, this benefit will applicable for a period among 6 and 20 years.

3. Tax Discount for investments made in control, conservation, and improvement of the environment in tourist activities.

4. Passenger air tickets, related services and the administrative fee associated with their marketing are subject of 5% of VAT. The general rate is 19%.

5. The provision of hotel and tourism services to residents of Colombia, including meeting tourism, is exempt from VAT since 1st January 2021 until December 31st 2021including congresses, conventions and exhibitions, and entertainment, by those who have active registration in the National Tourism Registry and provide their services in the exercise of the functions or activities that according to the law correspond to tourism service providers.

6. Exclusion of the VAT in franchise agreement. Commercial establishments that carry out activities to sell food and beverages prepared in restaurants, cafeterias, supermarkets, ice cream parlors, greengrocers, patisseries and bakeries, for consumption in the place, to be carried by the buyer or delivered at home, developed to through franchise contracts, they are excluded from VAT from the issuance of this Law and until December 31st, 2021.

Tourist service companies that want to develop any tourism activity in Colombia could account with a large benefit considering that the Government wants to incentive this sector that was tremendously affected by COVID 19.

****This document was prepared for academic purposes, which is why it does not correspond to an advisory or consultancy, so Al Partners is not responsible for any contingency that may arise with reference to this article ****


Contributing Advisors

Martha Stella Polo

Partner, AL Partners