Strengthening penalties for tax crimes in tax reform Law 2277 of 2022

The Constitutional Court issued strong support for the changes introduced by Law 2277 of 2022 regarding tax crimes. In its recent Ruling C-019 of 2024, the Court affirmed that the modifications made comply with the principles of “consecutivity and flexible identity inherent in the legislative process.” This decision reinforces the legitimacy of the provisions that seek to combat tax evasion and fraud in the country.

One of the main provisions included in the reform is the imposition of more severe penalties for taxpayers who make omissions or false statements in their tax returns. It establishes that those who omit assets, declare a value lower than the actual value of the assets, or declare non-existent liabilities for amounts exceeding 1,000 times the current legal minimum monthly wage (smmlv), equivalent to $1.3 billion (approximately $340,000 USD) at this year’s minimum, may face prison sentences of between four and nine years.

Additionally, the law provides for a scale of penalties based on the amount evaded. If the tax value of the evaded amount is between 2,500 and 5,000 smmlv, the penalties will be increased by one-third. If it exceeds 5,000 smmlv, the penalties will be increased by half, reflecting the seriousness with which tax evasion is being addressed in the country.

The Superintendency of Companies recommends that the General Shareholders’ Meeting approve the Sustainability Report at its regular meetings.

At the end of last year, the Superintendency of Companies issued External Circular No. 100-000010 of 2023, which suggests recommendations for the preparation of a Sustainability Report. These recommendations include that the report be prepared annually by a designated person and, if prepared, be presented during the regular meeting where the financial statements are approved.

Although the preparation and presentation of the Sustainability Report during the regular meeting is not mandatory at this time, the Superintendency of Companies has expressed its intention to make these recommendations enforceable obligations for companies that exceed certain thresholds. Therefore, it is suggested that you begin its preparation and approval during this year’s regular meetings in order to be prepared for possible future regulatory changes. The Superintendency of Companies clearly expressed its desire and plan to convert these recommendations established in the Circular into fully enforceable obligations for those companies that exceed the thresholds defined in Article 5 of said Circular.

To which companies does the recommendation to prepare the Sustainability Report apply?

• Companies that are under the supervision or control of the Superintendency of Companies and that have achieved total revenues or assets equal to or greater than forty thousand (40,000) smlmv, as of December 31 of the immediately preceding year.
• Companies that are part of the (i) mining and energy, (ii) manufacturing, (iii) construction, (iv) tourism, or (v) telecommunications and new technologies sectors and that meet the requirements established in section 5.2 of the Circular.

Contents of the Sustainability Report

• Name of International Reporting Standard
• Table of Contents
• Company profile.
• Context and sustainability strategy of the companies
• Disclosure of management activities
• Assignment of a person responsible for the Sustainability Report

Publication:

• Annual internal communication to all company employees.
• Recommended publication on the company’s website.