INTERNATIONALIZATION PLAN AND ANNUAL SALES PLAN FOR FREE TRADE ZONE INDUSTRIAL USERS

The industrial users of free zone that were constituted as such, before December 13, 2022, maintain the income regime established in article 240-1 of the Tax Statute, which enjoy a 20% income tax rate, for income from the export of goods and services.

In relation to other income different from those from the export of goods and services, the applicable rate is the general rate, i.e. 35%.

Now, by virtue of the provisions of paragraph 6 of article 11 of Law 2277 of 2022, (tax reform for equality and social justice), which in turn was regulated by Decree 0047 on January 30, 2024, issued by the Ministry of Commerce, Industry and Tourism, it was stated that the industrial users of free trade zone constituted after December 13, 2022, may apply the differential income tax rate of 20% of the income tax, as long as they subscribe and comply with the internationalization plan and the annual sales plan, the latter, defined as the document through which the industrial user sets the maximum income objectives for (i) the export of goods and/or services; (ii) operations in the national customs territory; and (iii) income different from the development of the activity for which it was authorized or qualified.

This document must be submitted to the Ministry of Commerce, Industry and Tourism, who, after verifying the requirements, will approve the internationalization plan and the annual sales plan by means of an administrative act.

Likewise, industrial users must submit an annual report covering the period from January 1st to December 31st of each taxable year. This report must detail the amounts of sales and the percentage of compliance with previously established commitments, since the non-compliance with the objectives defined in the internationalization plan and the annual sales plan, or the lack of presentation of such plans, will lead to the application of the 35% income tax rate.

Notwithstanding the above, industrial users that have been qualified before December 13, 2022, will not be required to submit the internationalization plan and the annual sales plan to the Ministry of Commerce, Industry and Tourism in order to maintain the differential income tax rate, reason for which, all those industrial users that had already been constituted as such become very relevant, since they are more competitive and enjoy these tax benefits without having to assume large commitments or set goals that may not be able to meet in that estimated period of time.