Tax Matters: The taxable base of motor vehicles is established

12 November, 2021
Tax Matters The taxable base of motor vehicles is established

The Ministry of Transportation issued the Resolution establishing the taxable base for motor vehicles for the 2022 fiscal year. Let’s see:

1. Law 488 on the issuance of regulations on tax matters

Law 488 provides that tax regulations are issued, and other tax provisions of the Territorial Entities are dictated. Article 143 of said Law establishes the following: 

“Taxable base. It is constituted by the commercial value of the taxable vehicles, established annually by a resolution issued in November of the year immediately preceding the taxable year by the Ministry of Transportation. 

For vehicles entering into circulation for the first time, the taxable base is constituted by the total value recorded in the sales invoice or when they are imported directly by the user owner or holder for the total value recorded in the bill of entry. 

Paragraph. For used vehicles and those subject to temporary internment, not included in the resolution issued by the Ministry of Transportation, the commercial value to be taken to declare and pay shall be the one corresponding to the motor vehicle incorporated in the resolution that is most similar in its characteristics.”

2. Taxable base 2022

The value indicated for each one of the vehicles in the tables attached to this resolution is established as the taxable base for the 2022 tax period for the payment of taxes for motor vehicles according to the corresponding make, line, engine displacement, load capacity, passenger capacity, and model year.

3. Types of vehicles

The procedure to determine the taxable base of a vehicle depends on the type of vehicle, which are the following:

  • Automobile vehicles (according to the model year).
  • Pickup trucks and vans
  • Double cab pickup trucks
  • Electric vehicles
  • Motorcycles, motorcars, ATVs, motor tricycles, electric motorcycles, and electric motorcars.
  • Passenger vehicles
  • Cargo vehicles
  • Ambulance vehicles
  • Hybrid vehicles

4. Duty of the ministry of transportation regarding the taxable base

According to the competencies defined in Law 488 of 1998, the Ministry of Transportation has the sole obligation to define the taxable bases for new and used vehicles taxed and those temporarily entering the national territory.  Therefore, in case of requiring the value to liquidate the income tax withholding or other tax on vehicles excluded in Article 141 of the above-mentioned law, the value determined in the purchase and sales contract or in any other document proving the value of the vehicle must be considered. 

5. Taxes for public service and electric vehicles

The tax for public service cargo and passenger vehicles applies only and exclusively in the municipalities where such vehicles are taxed under Law 488 of 1998.

For electric vehicles, the applicable fees may not exceed one percent (1%) of the commercial value of the vehicle.

6. Taxable base for used vehicles

Used vehicles, which due to the effect of the taxable base established in the resolution, for the fiscal year 2022, change their rank compared to the limit values thereof, determined for such year by the Ministry of Finance and Public Credit, and as a consequence, the applicable rate percentage is increased, shall pay the respective tax with the rate percentage with which they paid the tax year 2021, on the value of the assigned taxable base.

7. Application and validity

The resolution exclusively applies for the fiscal year 2022. 

The resolution is effective as of January 1, 2022.

Source: Red Jurista 12/11/21