How to Know Whether Your Company Is Micro, Small, or Medium-Sized
Today, June 27, we celebrate International SME Day, so we're explaining Decree 1074 of 2015, which sets the criteria for classifying companies as micro, small, or medium-sized.
Note: this article was originally published in 2021 with the UVT (tax value unit) figure in effect that year. The UVT is updated annually; contact us for the current figure.
Under article 2.2.1.13.2.1 of Decree 1074 of 2015, the sole criterion for classifying companies as micro, small, or medium-sized is annual income from ordinary business activities. Net worth or number of employees isn't taken into account. Keep in mind that "income" here means gross annual sales, excluding income from investment or financing.
The income threshold is set in UVT (tax value units) based on accounting records; the UVT for 2021 was set at $36,308 COP, so the classification runs as follows:
- Micro-enterprises:
- Manufacturing sector: income at or below 23,563 UVT.
- Services sector: income at or below 32,988 UVT.
- Trade sector: income at or below 44,769 UVT.
- Small enterprises:
- Manufacturing sector: income above 23,563 UVT and at or below 204,995 UVT.
- Services sector: income above 32,988 UVT and at or below 131,951 UVT.
- Trade sector: income above 44,769 UVT and at or below 431,196 UVT.
- Medium-sized enterprises:
- Manufacturing sector: income above 204,995 UVT and at or below 1,736,565 UVT.
- Services sector: income above 131,951 UVT and at or below 483,034 UVT.
- Trade sector: income above 431,196 UVT and at or below 2,160,692 UVT.
- Large enterprises: income above the medium-enterprise threshold.
If you still have doubts about how your company is classified, contact us by clicking here.
On top of the above, also keep in mind that:
* The income counted is the total accrued as of December 31 of the immediately preceding year.
* For new companies with less than a year of operation, income is measured as of the last day of the immediately preceding month.
* If a company operates in more than one sector, the income from its highest-earning sector applies. See paragraph 3 of article 2.2.1.13.2.2 of Decree 1074 of 2015.
* A company's size classification is certified by its legal representative and statutory auditor, or, if it has no statutory auditor, by its public accountant.
* For individuals (sole proprietors), accreditation is done via a certification issued by that same individual.
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