What many companies start to question during income tax preparation
At this time of year, many companies in Colombia are preparing their income tax return and reviewing the tax impact of the previous fiscal period.
It is precisely during this process that important questions begin to arise regarding tax burden, cash flow, administrative costs and the efficiency of the tax scheme under which the company operates.
In many cases, business owners and financial managers discover that they continue to be taxed under a regime that is not necessarily the most convenient for their operational reality.
In this context, the Simple Tax Regime (RST) becomes relevant again as an alternative worth analyzing for certain companies.
What is the Simple Tax Regime (RST)?
The Simple Tax Regime is an optional system administered by the DIAN that seeks to simplify tax compliance for companies and individuals carrying out business activities.
Unlike the traditional ordinary regime, SIMPLE replaces income tax with an integrated scheme involving bimonthly advance payments and a consolidated annual return.
In addition, depending on the taxpayer’s economic activity and conditions, the regime can integrate other taxes such as:
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Industry and Commerce Tax (ICA)
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National Consumption Tax (INC) in some cases
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Other local tax components, as applicable
This makes it possible to centralize part of the tax obligations within a single system.
Simple Regime vs. Ordinary Regime: What Really Changes?
Many companies start comparing the ordinary regime and the Simple Tax Regime when reviewing the financial impact of their income tax return.
The main differences include:
| Ordinary Regime | Simple Regime |
|
Traditional income tax return |
Annual SIMPLE return |
|
Main payment due when filing |
Bimonthly advance payments |
|
Separate handling of some taxes |
Possibility of integrating taxes |
|
Greater operational complexity |
Administrative simplification |
|
Greater formal burden for some SMEs |
Simplified model for certain businesses |
However, SIMPLE is not always more favorable. Each company must analyze its operations, cost structure and tax behavior.
Why Do Many Companies Start Evaluating It During Tax Season?
During income tax return preparation, situations such as these often arise:
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High tax burden
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Significant cash flow impacts
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Differences between accounting profit and tax burden
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Complex compliance processes
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Multiple returns and obligations
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Difficulty projecting taxes
This is when some companies start to wonder whether the ordinary regime is really still the most suitable one for their operations.
In many cases, SIMPLE can be an interesting alternative for certain business models, especially companies in:
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Services
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Retail/trade
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Restaurants
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Independent professionals
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SMEs with simple operating structures
Benefits of the Simple Tax Regime for Companies and SMEs
Reduced Rates Based on Income Level
The regime applies differentiated rates depending on the economic activity and income level.
For some companies, this can mean a reduction in the effective tax burden compared to the ordinary regime.
Tax Integration
SIMPLE makes it possible to consolidate different taxes within a single tax scheme, reducing operational and administrative processes.
Bimonthly Advance Payments
Instead of facing a large payment when filing the income tax return, the regime works through bimonthly advance payments throughout the year.
This can make cash flow planning easier for some companies.
Administrative Simplification
Many companies particularly value the reduction in tax and operational complexity.
Simplifying processes can result in significant savings in administrative time and internal control.
Formalization and Access to Financing
Tax and accounting formalization facilitates access to:
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bank credit
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financing
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business relationships
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public tenders/bids
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business growth
Which Companies Can Benefit from the RST?
Although each case must be analyzed individually, the Simple Regime tends to attract:
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small and medium-sized enterprises
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service companies
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retail businesses
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restaurants
-
independent professionals
-
growing businesses
-
companies with simple administrative structures
However, not every company should automatically migrate to SIMPLE.
Common Mistake: Evaluating the RST Based Only on the Rate
Many companies focus solely on comparing tax percentages.
However, the analysis should be much broader.
The regime’s actual impact depends on multiple factors:
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cost structure
-
deductions
-
margins
-
operations
-
local tax obligations
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VAT behavior
-
cash needs
For this reason, SIMPLE should be evaluated from a comprehensive financial and tax perspective.
Deadlines and Dates Companies Should Keep in Mind
Companies currently under the Simple Tax Regime (RST), or those evaluating this scheme, should keep in mind some relevant deadlines during 2026.
RST Annual Consolidated Return
SIMPLE taxpayers must file the consolidated annual return in April of each year.
RST Bimonthly Advance Payments
The tax is paid through bimonthly advance payments during the year, due in:
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May
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June
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July
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September
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November
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January 2027
Deadline to Opt into the Simple Regime
Companies interested in joining the RST must update their RUT accordingly by the last business day of February each year.
For this reason, many companies take advantage of income tax preparation to analyze whether SIMPLE could be a suitable alternative for the next fiscal period.
You can also check our related report:
2026 Tax Calendar – HUB Accountants Colombia
How to Know If a Company Should Be Under SIMPLE?
Before making a tax decision, it is advisable to carry out an assessment covering:
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effective tax burden
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cash flow
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financial performance
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revenue projections
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deductible costs
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current tax obligations
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administrative and operational impact
Many companies remain in the ordinary regime simply because they have never carried out a proper comparative analysis.
Income tax preparation should not be limited solely to fulfilling a tax obligation.
It is also a key moment to review:
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tax structure
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tax efficiency
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administrative burden
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cash flow
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financial planning
In many cases, this analysis makes it possible to identify significant improvement opportunities for the company’s operations.
How Can HUB Accountants Help?
At HUB Accountants, we support companies in processes related to:
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Simple Tax Regime evaluation
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tax planning
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accounting and tax outsourcing
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tax diagnostics
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DIAN compliance
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administrative and financial organization
Our goal is to help companies make tax decisions aligned with their operational and financial reality.
Contact
Oscar Andrés Torres
Partner – HUB Accountants