The offense of omission by a withholding or collecting agent is defined in Article 402 of Law 599 of 2000 (Colombian Penal Code), under the category of “Crimes against the Public Administration.” This criminal offense penalizes the failure of withholding agents or self-withholding agents to comply with their obligations within the Colombian tax system, specifically regarding withholding at source.
What is withholding tax?
Withholding at source is a mechanism for gradually collecting tax during the tax period. The following are involved in this process:
- The State, through the tax authorities.
- The withholding agent or self-withholding agent: responsible for deducting and remitting the withholding.
- The taxpayer, who must pay the tax.
The withholding agent acts as an administrative intermediary, with the function of deducting the tax and remitting it to the State on time. The self-withholding agent is the one who withholds personally, assuming both responsibilities [Law 599 of 2000, Article 402].
Penalties for the crime of omission by a withholding agent
The law establishes strict penalties for agents who fail to deposit the withheld sums within two months of the payment deadline:
- Prison sentence of 48 to 108 months (4 to 9 years).
- A fine equivalent to twice the amount not deposited, not exceeding 1,020,000 UVT.
It should be clarified that if the agent extinguishes the tax obligation through payment or compensation, he may benefit from the preclusion or cessation of the criminal process, without prejudice to administrative sanctions [Law 890 of 2004, amendment to Article 402].
Case law and particularities
- The crime is committed by a qualified agent who performs temporary public functions, being considered a public servant for the purposes of criminal prescription.
- Common cassation requires maximum sentences exceeding 8 years for its admissibility, which limits this figure with respect to the crime of omission by withholding agent.
- The jurisprudence has evaluated the application of Law 890 of 2004 on the increase of the statute of limitations for crimes committed by public servants.
Emblematic case
An illustrative case in Colombia was the four-year prison sentence handed down to a merchant who owed the Colombian tax authority (DIAN) just $310,000 for unpaid withholding taxes. The individual went bankrupt and ended up in jail because he never sought a payment agreement or legal counsel, thus committing this crime.
Conclusion and recommendation
Due to the severe penalties and the DIAN’s constant vigilance in detecting this crime, it is vital that withholding agents and self-withholding agents fulfill their obligations promptly. It is essential to seek advice from tax experts to avoid committing this crime due to ignorance or negligence.
Knowing and complying with the rules is the best defense against facing criminal consequences that can seriously affect your assets and freedom.
