What You Need to Know About the Accounting Services in Bogota, Colombia
There will be an overview of the demand growth for professionals who provide accounting services in the country. There is a brief summary of the economic outlook and the current trends in the nation, especially under the market of Mergers and Acquisitions. This explains the current tax law changes in Colombia, as well as the opportunities and difficulties they show. Moreover, you will know how the Bogota, Colombia accounting services affect the economy’s future.
Overview: There are more Mergers and Acquisitions in the Colombian Market
Colombia has the 4th largest economy. It is a Latin American country that has a Mergers and Acquisitions market which is the 4th most active. Colombia is only behind Brazil, Chile and Mexico. It has resulted in macroeconomic stability and the projected growth rates are from 2% and 4%. The gathered data about the growth rate was from the 2nd half of 2017. However, the peach accord implementation when merged with the FARC is going to overpower the policy agenda politically, and the continuity gets assumed. The growth of the GDP should increase by 2018 due to infrastructure spending, bigger oil prices and some from private investment.
At the beginning of 2015 and up to 2016, they include Colombia in 39 mergers and investments amounting up to $5.6 billion, but it wasn’t just that. Since that time, the big mergers such as the $100 billion beer mergers – Anheuser-Busch Inbev and SABMiller. As well as the $2 billion privatization of ISAGEN, a public company providing power utility, by Brookfield Asset Management. They are responsible for showing the strength of the Colombian M&A market. Another acquisition came from Terpel, which is ExxonMobil and gave it a 50% control of their oil and lubricant market.
In terms of the regulatory changes that happened last December 29, 2015, the Colombian Congress passed the Law 1819 of 2016, which reformed the country’s tax code. Importantly, the law added the processes needed for the alignment of the tax system and the guidelines of OECD’s Base Erosion and Profit Shifting (BEPS). There were other charges that added to the general income tax rate in general about withholding dividends and removed equality income tax (CREE) and surcharges.
The Opportunities and Challenges Faced by Accounting Services in Colombia
The new changes made to the Colombian IFRS should be recognized as a chance for companies to show the financial statements in a universal language for better business management. This new standard they adopted allows other markets in the world to enter the country. Furthermore, it is very helpful to the innovation of tools and financial information. Although, the legal and regulatory requirements of accounting add a challenge for Colombia, which does not align with the standards of financial reporting. Colombia has a lot of established sources involving the rules and standards of accounting. Some of the requirements are conflicting. Therefore, the preparers, accounting or auditing firms usually get confused about how certain accounting methods are applied. As well as disclosure obligations that can cause the deterioration of the quality of financial statements.
In a lot of cases, the rules in tax accounting need accounting treatments which are in conflict with the requirements. These are inventory costing, retail method valuation, leaving contract accounting, bad debt provision, and adjustments in inflation. Due to this, auditing and accounting firms encounter a challenge when trying not to cause different opinions. They also do not want to have any misinterpretation of the statements from taxation authorities.
Expectations About Colombia’s Future Economy
Colombia was able to attract more investors and mergers compared to other Latin American countries. It is because of how they adopted policies of the free-market. The middle-class population of almost 50 million people and the positive environment for regulations are factors too. The buyers typically want for the infrastructure and energy sectors. But there have been more investments in technology, pharmaceuticals, real estate, and finance sectors. This only proves there is more diversity and urge to invest in Colombia, which increases the demand to outsource the accounting services.
The accounting services are very helpful to anyone who wants to invest in Bogota, Colombia. They have an appointed person to answer all questions of interested investors.