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Article 23 of the proposed bill amends paragraph 2 of Article 20-3 of the Colombian Tax Code, which governs the taxation of non-resident individuals or foreign entities selling goods or providing digital services to users in Colombia under the SEP standard.
The main change is an increase in the applicable tax rate on gross income from these operations, rising from 3% to 4.5%. This represents a 50% increase in the tax burden for foreign companies involved in the digital economy that choose to file and pay the tax directly, instead of being subject to withholding at source. The option to file directly through the income tax return is maintained, which simplifies compliance for non-residents.
Bill No. 031 of 2025 (Chamber of Representatives), which includes this amendment, was filed on 21 July 2025, and is currently under discussion in the Third Committee of the House of Representatives. The debate and vote on the articles, including Article 23, have been postponed until next Tuesday, so there is not yet a final decision on its approval.
The increase to 4.5% for digital economy companies with SEP in Colombia is a significant change in the taxation of digital goods and services from abroad. It is essential for potentially affected companies to review their exposure and prepare strategies to anticipate a possible reform.
At Baker McKenzie, we invite all our clients to consult with us to analyze the specific impact of this potential reform on their operations and to anticipate any necessary adjustments to their tax and compliance structures. We are ready to provide strategic and technical support in response to any regulatory changes regarding the digital economy and international taxation.
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