Tax reform Bill presented to Colombian Congress

The Bill aims to fill the fiscal gap left by the 2025 budget law, which has not been approved by the economic commissions of Congress.

As part of the proposed reforms, corporate income tax would be set at a progressive rate depending on the size of the company. The marginal rate of 35 percent would be phased down to 33 percent for companies with the largest turnover by 2029. For the smallest companies, this rate would be 27 percent by 2029. The minimum corporate tax rate would increase from 15 to 20 percent.

For individuals, the highest marginal rate for income tax is proposed to increase from 39 to 41 percent. this would apply to Colombian tax residents with an income exceeding 31,000 tax units. CGT would increase from 15 to 20 percent.

The Bill also proposes an equity tax, to apply to both domestic corporations and permanent establishments in Colombia, on “non-productive real fixed assets.” These are defined as tangible assets that do not consistently produce income or that are not directly connected to income-generating activities.

Law firm Holland & Knight notes that as Congress has not approved the 2025 budget it may seek to introduce changes to the tax reform Bill before it is approved.

Sources

• EY
• Holland & Knight (Spanish)
• Bloomberg Law (paywall)