On 15 April 2020, Colombia has issued Decree 560 of 2020 regarding insolvency processes, which are intended to mitigate the extent of the effects on companies affected by the declaration of a state of emergency due to COVID-19. The corporate insolvency regime contained in Law 1116 of 2006. According to the Decree, the following tax measures will be adopted until 31 December 2020:
- Entities that involved in insolvency proceedings will not be subject to withholding or self-withholding at the source as income tax and will be exempt from paying and paying the advance of income,
- They will be subject to withholding tax as a sales tax of 50%, and
- They are not obliged to settle presumptive income for the taxable year 2020.
The Decree is applicable from 16 April 2020.
