THE GENERAL RATE OF VAT INCREASES TO 19%
From January 1st 2017 the general rate of VAT will increase to 19%, partly destined for the financing of health and education programs. A transitional regime for the sale of goods and services to the public is established
Regarding 1% of the increase in the VAT rate, 0.5 points will be destined to the financing of the insurance under the General System of Health Social Security. The remaining 0.5 points are destined for the education budget. 40% of these revenues are to be assigned to the financing of public higher education.
Law 1819 established a transitional regime for the application of the increase in the VAT rate. This regime applies only to businesses that sell pre-marked merchandise. This merchandise can be sold with the pre-marked price, while supplies last. In any case, from February 1st of 2017, business shall use the new VAT rate.
The new VAT rate can be found in Article 184, and the transitional regime in article 198, of Law 1819 of 2017.
