Pursuant to article 519 of the Colombian Tax Code, all public instruments and private documents whereby the creation, existence, amendment, extinction, extension or assignment of obligations is evidenced, and that are (i) executed or accepted in Colombia, (ii) executed abroad to be performed in this country, or (iii) whereby obligations in this country are established, are subject to stamp taxes at a rate of 1.5% applicable over (x) the total amount of the contract, if determined as of the date of execution of the relevant document, or (y) the amount of each payment, if the value of the relevant contract could not be determined at the time of execution, provided the following conditions are met:
Pursuant to article 540 of the Colombian Tax Code, the stamp taxes applicable to a document had to be paid in order for said document to be admitted by any authority or considered as evidence within judicial or administrative proceedings.
Therefore, in Colombia for a document to be used to initiate judicial or administrative proceedings or to be admitted as evidence therein the interested party had to provide proof of payment of the relevant stamp taxes accrued.
This changed at the end of last year, when a Colombian citizen filed a suit before the Colombian Constitutional Court against the above-mentioned article 540 to obtain a declaration of unconstitutionality in respect of said article arguing that it breached the following principles of the Colombian Constitution:
In view of the above, as from judgment C-1714 of December 12, 2000 the lack of payment of the stamp tax (or of proof thereof) is no longer an impediment to use a document in administrative or judicial proceedings in Colombia.
On the other hand, it is worth noting that there is another article of the Colombian Tax Code in this connection that has not been declared unconstitutional. This is article 544, whereby public servants that admit documents subject to stamp tax without it having been paid are subject to fines.
However, it could be argued that this article has become inapplicable since the legal prohibition to admit such documents on which it is based (article 540) is no longer a part of Colombian law and, therefore, any public servant that admits these documents would not only not be violating any legal provision but instead would be giving effect to the Constitutional Court's ruling.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.