Below we summarize the most relevant tax aspects proposed in the tax reform bill recently submitted to the Congress of the Republic:


    • Municipal tax (ICA) will now be treated as a tax deduction, rather than as a tax credit.
    • All tax discounts, special deductions and exempt income will be subject to a limit, which shall be 3% of the taxpayer’s ordinary taxable income. This implies that there will be limits to discounts such as: VAT on production fixed assets, donations, investments in environmental improvements, Colciencias and other exempt income.
    • The free trade zones will have to fulfill their export commitments in order to maintain the preferential regime that grants them a 20% tax rate.
    • An express prohibition is introduced indicating that the following cannot be deducted: payment of memberships in social clubs; the labor expenses of support personnel who work at homes or in other activities other than the income-producing activity; the personal expenses of shareholders, partners, clients and/or their families, all of which will be considered in-kind income for their beneficiaries.
    • The capital gains rate increases to thirty percent (30%).
    • The surcharge for the financial sector, which is three percent (3%), will become permanent.
    • The consideration paid by the mining and hydrocarbons industry as royalties will not be deductible for income tax effects.


    • For individual tax residents in Colombia, the tax rate for dividends on profits that were deemed non-taxable in accordance with article 49 of the Tax Statute (ET, by its acronym in Spanish) will now be the same as for ordinary income:

    • For foreigners, the tax and withholding rates on dividends will be twenty percent (20%).
    • In the case of foreigners who are residents in countries covered by double tax treaties (DTT), the dividends will be subject to the provisions of such treaties.
    • The seven point five percent (7.5%) withholding rate on distributions to national companies will remain in place, and the withholdings made by the company will be transferrable to the final investors.


    • Foreigners that have a significant presence will be taxed at the same rate as permanent establishments. The aim of this is to tax platforms such as UBER; Netflix, HBO, but it may include other entities in similar circumstances that are major providers of products imported by Colombian residents.
    • Significant economic presence means that an entity meets any of the following criteria:
  1. It has gross revenues of thirty-one thousand three hundred (31,300) tax value units (UVT, by the acronym in Spanish) (equivalent to $ 1,189,493,900) or more during the tax year, in transactions involving sales of goods or services to persons in Colombia.
  2. It uses a Colombian website, or a Colombian domain (.co);
  3. It maintains interactions or has market deployment covering three hundred thousand (300,000) or more Colombian users during the tax year, including the possibility of viewing prices in Colombian pesos (COP) or allowing payment in Colombian pesos (COP).
    • Foreign tax residents of a country that has a DTT in place shall be governed by the provisions of the DTT.


    • Retirement pensions of more than ten million ($10,000,000) will be taxed.
    • The exempt income in the case of work-related income shall be twenty-five percent (25%), but the quantitative threshold is reduced significantly, as it will no longer be 2,880 UVT ($ 109,448,640) per year, but instead 790 UVT ($30,022,370) per year, equivalent to two million, five hundred and one thousand, eight hundred sixty-four pesos ($ 2,501,864) per month.
    • The quantitative threshold of the forty percent (40%) threshold of exempt income and deductions under this category decreases from 5,040 UVT ($191,535,120) per year to 1,210 UVT ($ 45,983,630) per year.
    • Work-related earnings, non-work income from capital, pensions, dividends and capital gains will be added into a single total, which will be subject to the single progressive tax rate established in article 241 of the ET:

      • For income tax effects, in-kind payments that must be reported as income in favor of the beneficiary at market value are defined as those paid to third parties for the provision of services or the acquisition of assets that are for the use of the taxpayer or his/her spouse, or relatives within the fourth degree of consanguinity, second degree of affinity or one degree of civil relationship, whenever they are not the own income of such persons and they are not payments that must be made by law by employers to entities such as Colpensiones, Instituto Colombiano de Bienestar Familiar (ICBF), Servicio Nacional de Aprendizaje (SENA) and Family Compensation Funds.
      • In the case of free goods or services whose value cannot be determined, they must not be reported as a cost, expense or deduction in the income tax of the payer.
    • Exemptions to capital gains are reduced as follows:
      • On life insurance, it decreases from 12,500 UVT ($ 475,037,500) to 3,250 UVT ( $ 123,509,750).
      • On the profit from the sale of a house or apartment that is effectively used to live in, it decreases from 7,500 UVT ($ 285,022,500) to 3,000 UVT ($114,009,000) (This income exemption will now be available for all housing, rather than only for housing within certain value ranges).


    • Now all assets held abroad for one peso ($ 1) or more must be reported, which eliminates the exemption of only reporting assets abroad when their amount was less than 2,000 UVT ($ 76,008,000).


    • A permanent tax on equity is established for the following persons:
  1. National or foreign individuals and non-settled estates that are taxpayers of the income tax or alternative tax regimes.
  2. National or foreign individuals who are not Colombian residents, in connection with their assets held directly in the country, with the exceptions provided for in international treaties and internal laws.
  3. National or foreign individuals who are not Colombian residents, in connection with their assets held indirectly through permanent business establishments in the country, with the exceptions provided for in international treaties and internal laws.
  4. Non-settled estates of deceased persons who were not residents in the country at the time of death, in connection with assets held in the country.
  5. Foreign companies or entities that do not file income tax returns in the country and that hold assets located in Colombia other than shares, accounts receivable and/or portfolio investments, in accordance with article of Decree 1068 of 2015, and 18-1 of the same regulation, such as real estate properties, yachts, boats, works of art, aircraft or mining or oil and gas rights. Foreign companies that do not file income tax returns in the country, but which have signed financial lease agreements with entities or individuals that are Colombian residents, will not be subject to the tax on equity.
    • National companies are not subject to this tax.
    • The event that gives rise to the assessment of this tax is holding net assets (equity) of more than three billion pesos ($ 3,000,000,000)
    • The annual rate will be 0.5% of net assets for equity between 3 billion and 5 billion pesos.
    • The annual rate will be 1% if net assets is equal to or greater than 5 billion pesos.
    • It will accrue on January 1st each year.
    • The home or residence where the taxpayer effective lives will be subtracted from the tax base for up to 12,000 UVT ($ 456,036,000), but this excludes recreation homes, second homes or other types of properties.
    • The value of shares must be reported as follows:
      • Shares or equity interests in national companies not listed on the stock market, at the accounting carrying value. The same criterion applies to investment vehicles in which the underlying assets are shares.
      • Shares listed on the Colombian Securities Exchange, the quoted closing price on the trading day before the date on which the tax accrues.
      • Private equity interests, trusts, insurance with a material savings component, investment funds or any other trust business in Colombia or abroad, the equity value shall be the underlying net equity.
    • The tax administration (DIAN) is ordered to create a special surveillance program for those whose equity decreases compared to January 1st the previous year.


    • Some rates of the SIMPLE regime were reduced as follows:
      • For wholesales and retailing activities; technical and mechanical services in which is material factor predominates over the intellectual factor; electricians, bricklayers, construction services and automotive and house appliances repair shops; industrial activities including agro-industry, mini-industry and micro-industry; telecommunications activities in the range from 30,000 to 100,000 UVT, it decreases from 5.4% to 5%.
      • For professional, consulting and scientific services in which the intellectual factor predominates over the material factor, including the liberal professions, in the range from 15,000 to 30,000 UVT, it decreases from 12% to 7.9%, and in the range from 30,000 to $ 100,000 UVT it decreases from 14.5% to 8.3%.
    • The possibility is created for the following activities to be included in the SIMPLE regime:

    • Under the SIMPLE regime, the tax return will not be deemed to have been received if timely payment is not made.


    • Coal sales to final consumers will begin to be taxed.
    • The national carbon tax with have a specific rate depending on the greenhouse gases (GHG) emissions factor of each type of fuel, expressed in units of weight (kilogram of CO2eq) per energy unit (terajules), according to the volume or weight of the fuel. The rate will be twenty thousand five hundred pesos ($20.500) per ton of carbon equivalent (CO2eq). The following are the rates per unit of fuel:

      • Tax returns filed without payment will not be effective.
      • In the case of coal, the tax rate will apply gradually as follows:

– For 2023 and 2024: 0%.

– For 2025: 25% of the full rate.

– For 2026: 50% of the full rate.

– For 2027: 75% of the full rate.

–  Starting in 2028: the full rate


    • The event that gives rise to the tax is the sale, withdrawal for own consumption, or importation for own consumption of single-use plastics used for product containers or packaging.
    • The tax will accrue on sales made by producers, on the date the invoice is issued; on withdrawals for use by producers, on the date of the withdrawal; and on imports, on the date of customs clearance.
    • The taxpayer responsible for this tax is the producer or importer, as the case may be.
    • The tax base for this tax is the weight in grams of the single-use plastic container or package.
    • The tax rate is 0.00005 UVT per each (1) gram of container or packaging.


    • The taxpayers responsible are individuals and legal entities that export crude oil, coal or gold.
    • The event that gives rise to the tax is the export of crude oil, coal or gold when the international price is above certain thresholds, which in the case of oil is an FOB price of US$ 48.
    • The rate is 10% on the price above the threshold.


    • The taxpayer responsible is the producer, importer or its related parties.
    • The event that gives rise to the tax is the production and first sale or import of ultra-processed sugar-sweetened beverages.
    • This tax accrues upon the first sale by the producer or upon issuance of the invoice or equivalent document, and in the case of imports, at the time of customs clearance. It will be treated as a cost that is deductible for income tax effects; it would not give rise to an offsetable tax in VAT and it should be separately stated in the sales invoice. The procedures and penalties established for the National Excise Tax will also apply to this tax.
    • Zero-calorie sweeteners are not considered added sugar.
    • Rate:

    • Taxed goods:


    • The taxpayer responsible for this tax is the producer, the importer, or their related parties.
    • The event that gives rise to this tax is the production and first sale or import of ultra-processed foods with high added sugar content.
    • This tax accrues at the time the producer delivers the product for distribution, sale, publicity, promotion, donation, commission, or uses it for self-consumption, and in the case of imports, at the time it arrives in the country. It would not give rise to an offsetable tax in VAT and the procedures and penalties established for the National Excise Tax will also apply to this tax.
    • The rate will be 10%.
    • Products subject to this tax:

    • Ultra-processed foods are industrial formulations made from substances derived from food products or synthesized from other organic sources. In their current form, they are scientific and technological inventions of modern industrial foods. Most of these products contain little or no integral foods. They are ready to consume or to heat, and therefore require little or no cooking. Some substances used to manufacture ultra-processed foods, such as fats, oils, starches and sugars, are directly derived from foods. Others are obtained through additional processing of certain food components, such as the hydrogenation of oils (which produces toxic trans fats), hydrolysis of proteins and the “purification” of starches. The great majority of the ingredients of most ultra-processed foods are additives (binding, cohesion, coloring, sweetening, emulsifying, thickening, foaming and stabilizing agents; sensory “enhancers” such as added flavors and aromas; preservatives and solvents).Ultra-processed foods are industrial formulations mainly made from substances extracted or derived from foods, combined with additives and artificial ingredients that add color, flavor or texture to attempt to imitate food products. These products are nutritionally unbalanced. They have high contents of free sugars, total fat, saturated fats and sodium, and low contents of protein, food fiber, minerals and vitamins compared to non-processed or minimally-processed products, foods and preparations.
    • Added sugars are defined as monosaccharides and/or disaccharides that are intentionally added to water or food products during processing by the manufacturer. This classification includes white sugar, brown sugar, raw sugar, corn syrup, corn syrup solids, high-fructose corn syrup and/or its derivatives, malt syrup, maple syrup, fructose sweetener, liquid fructose, honey, molasses, anhydrous dextrose and crystalline dextrose, among other sweetener with high calorie content.


    • Revenue that does not represent income in the sale of shares listed in the stock market.
    • Distribution of profits in shares or parts of equity interest, or capitalization by transfer to the capital account.
    • Exempt income of the hotel industry.
    • Exempt income of the orange economy.
    • Income derived from investments that increase the productivity of the agricultural sector and exploitation of new forestry plantations, including bamboo, rubber and cashew trees.
    • Copyright revenues from books of a scientific or cultural nature, and the first edition and printing of books, publications printed in Colombia.
    • Audio-visual Investment Certificates in Colombia, discount on 35% of the investment made in Colombia
    • Donations aimed at the immunization of the Colombian population against COVID-19 and any other pandemic
    • Investments or donations in film projects (165% deduction)
    • Investments or donations in creative economy projects (165% deduction)
    • Days without VAT
    • Mega-investments, differentiated rates and other tax benefits
    • ZESE regime in Guajira, Norte de Santander, Arauca and Buenaventura.