Colombia: Legislative Decree 1474 of 2025 – Extraordinary tax measures due to economic emergency

05 Jan 2026    2 minute read

In brief

In the context of the economic emergency declared by the Government on 22 December 2025, on 31 December 2025, the Government issued Legislative Decree 1474 of 29 December 2025, which establishes temporary tax measures to address the fiscal and social crisis resulting from the State of Economic, Social, and Ecological Emergency declared by the National Government. The measures include temporary changes to consumption tax, VAT, wealth tax, the financial sector, hydrocarbons, and coal, as well as benefits for the reduction of penalties and interest.

Contents

Key aspects

1. Increase in VAT and excise tax rates

  1. During 2026, goods subject to excise tax on spirits, wines, aperitifs, and similar products will be subject to a VAT rate of 19%. It should be noted that no transition period has been planned for this measure, so the new 19% rate will take effect on 1 January 2026, and will be applied immediately.
  2. Excise tax rates on these products and on cigarettes, manufactured tobacco, tobacco products, and vaping devices will also increase.
  3. Gambling operated exclusively online in the national territory, both domestic and foreign, will be subject to VAT during 2026 at a rate of 19%. The tax base will be the gross gaming revenue (bets minus prizes paid).

2. Wealth tax

  1. By 2026, wealth tax will be levied on wealth held on 1 January 2026, with a value equal to or greater than 40,000 UVT (approx. COP $2 billion), with progressive marginal rates:
  • 0.5% rate (40,000-70,000 UVT)
  • 1% rate (70,000-120,000 UVT)
  • 2% rate (120,000-240,000 UVT) up to 5% rates

3. Temporary tax on hydrocarbon and coal extraction

  1. A special tax is created for 2026 with a rate of 1% on the first sale or export of hydrocarbons and coal (items 27.01 and 27.09), applicable to companies with ordinary net income equal to or greater than 50,000 UVT. The tax is calculated on the sale value or FOB value for exports.

4. Tax normalization tax

  1. A supplementary tax normalization tax of 19% is established for omitted assets and non-existent liabilities as of 1 January 2026. It does not generate taxable net income or equity comparison, and the return must be filed before 31 July 2026.

5. Tax benefits

  1. Tax, customs, and exchange obligations in arrears as of 31 December 2025, may be eligible for a reduction in penalties (15%) and default interest (4.5%) if the total amount is paid before 31 March 2026.
  2. The settlement of tax, customs, and foreign exchange proceedings under judicial review is enabled, allowing for a reduction of up to 85% in penalties and interest if the tax and the remaining percentage are paid before 31 May 2026.

Given the immediate entry into force of most of the provisions of Legislative Decree 1474 of 2025, it is essential that companies urgently review their tax, operational, and contractual situation. We recommend that companies anticipate the financial and operational impact of these measures. Proactive preparation will be key to mitigating risks and taking advantage of the transitional benefits provided for in the decree.

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Contact Information
Ciro Meza Martinez
Partner
Bogota
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ciro.meza@bakermckenzie.com

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