VAT ON IMPORTS

VAT taxable base on imports.

The taxable base on which VAT is calculated on imports is defined in Article 459 of the Tax Statute, which states in its first paragraph:

"The taxable base on which sales tax is calculated in the case of imported goods shall be the same as that used to calculate customs duties, plus the value of this tax."

In other words, the value stated on the import declaration is taken, plus any customs duties that may have been imposed.

VAT rates on the importation of goods.

The rate applicable to the goods or services is applied. For example, if the imported product is subject to a 19% tariff, that will be the VAT rate for the import settlement.

VAT discount paid on imports.

The VAT paid when importing a product is deductible if the importer is liable for VAT, declares VAT, and the import meets the requirements for VAT to be deductible, i.e., the general rule applies.

However, due to the particular nature of VAT accrual on imports, certain considerations must be taken into account.

Some taxpayers have paid VAT based on the date of the invoice issued by the foreign supplier, which may be before or after the date of nationalization of the import, and this may result in the loss of the opportunity to deduct VAT.

Due to custom, there is a risk that we simply take the invoice date as a reference, which is the general rule.

However, regarding the timing of VAT accrual on imports, the Fourth Section of the Council of State stated in ruling 17428 of December 5, 2011, presented by Judge Hugo Fernando Bastidas Bárcenas:

"In fact, as explained, there is only one moment of VAT accrual on imports, as provided for in Article 429 of the Tax Code, and that is when the imported goods are nationalized."

This has a direct effect on the date on which the VAT paid can be claimed as a discount, a term established in Article 496 of the tax statute.

In this regard, the Council of State stated in the aforementioned ruling:

"And since that tax is deductible, when Article 496 E.T. stipulates that deductible taxes may only be accounted for in the tax period corresponding to the date of their accrual, said accrual is none other than, in the case of VAT generated on imports, that referred to the nationalization of imported goods."

Consequently, in the case of imports, VAT is payable on the date on which the import is nationalized or legalized, regardless of the invoice date, and based on this information, the deductible VAT is accounted for and declared.