The proposed 2026 budget legislation introduces significant reforms to corporate surtax, VAT, personal income tax, net wealth tax, and capital gains tax, with new tax rules for crypto-asset transactions.

Colombia’s Ministry of Finance submitted a tax reform bill to Congress outlining several measures for the 2026 budget on 1 September 2025.

The proposed legislation brings changes to various taxes, including VAT, income tax, net wealth tax, and the supplementary tax on capital gains. It aims to raise COP 26.3 trillion in 2026 to finance next year’s budget.

The main proposed measures are as follows:

CIT surcharge on financial sectors

The surcharge on financial institutions will increase to 15%, while surcharges on the coal and oil sectors will be aligned under harmonised rules.

CIT surtax on nonrenewable resources

  • The thresholds for applying the CIT surtax on certain nonrenewable resource extraction activities would be reduced.
  • For coal companies, the surtax rate would increase from 10% to 15%, resulting in a potential combined rate of up to 50%.

Tax rate for nonresidents with SEP 

Nonresidents with significant economic presence (SEP) in Colombia that choose to file an income tax return would see their gross revenue tax rate rise from 3% to 5%.

Church tax rate

Churches will be subject to the 35% rate based on their commercial activities.

Withholding tax on dividends

  • The withholding tax on dividends paid to nonresidents would increase from 20% to 30%.
  • The holding period for applying the reduced 15% capital gains rate on fixed asset transfers would be extended from two years to four years.

Crypto taxation

New rules will govern the taxation of crypto-asset transactions.

Tourism services

The VAT exemption for tourist services used in Colombia by foreign residents will be removed.

VAT on games of chance

The standard 19% VAT rate will now apply to games of luck and chance, though lotteries remain excluded.

Capital gains on gambling and lotteries

The capital gains tax rate on gambling and lotteries would increase from 20% to 30%.

Hybrid vehicles

  • The preferential 5% reduced VAT rate for hybrid vehicles will be eliminated.
  • The general 19% VAT rate would apply to hybrid vehicles.

VAT on liquid fuels

  • Preferential VAT rates will be phased out between 2026 and 2028. Gasoline and diesel will temporarily face a 10% VAT before moving to the general rate; ethanol and biofuels will also shift to the standard rate.
  • The VAT on diesel fuel will be progressively increased from 5% to 10% in 2026–2028, and to 19% in 2028.
  • Gasoline will be subject to a 10% VAT rate in 2026 and 19% in 2027.

VAT exemption for couriers

The VAT exclusion for courier and urgent shipments valued at USD 200 million or less from countries with Free Trade Agreements (FTA) would be eliminated.

National consumption tax

  • The tax rate on certain vehicles (SUVs, pick-up trucks valued over USD 30,000 FOB), as well as some planes, motorcycles, yachts, and similar goods, would increase from 16% to 19%.
  • Entertainment and cultural services exceeding 10 tax units (approx. USD100) would be subject to a 19% consumption tax.

Tax on hydrocarbons and coal

  • The 1% tax on the first sale or export of hydrocarbons and coal, initially temporary until 31 December 2025, would become permanent.
  • Taxpayers with taxable income up to 50,000 tax units (approx. USD 622,000) in the prior year would be exempt, though related parties must be considered when calculating the threshold.

Carbon tax

The carbon tax would increase from COP 20,500 (approx. USD 5) to COP 42,609 (approx. USD 10) per ton of CO2 equivalent.

Equity tax

The threshold for liability would decrease to 40,000 tax units (approx. USD 498,000). The maximum tax rate would rise to 5%, up from the current 1.5% (noting that under current law, this rate is expected to fall to 1% in 2027).

Normalization tax

A normalisation tax would be reinstated to address undeclared assets or nonexistent liabilities as of 1 January 2026. The applicable rate would be 15%.

Taxation of digital assets

Digital assets that derive value from an underlying Colombian asset will be treated as generating Colombian-source income.

Expanded indirect asset transfer rules

Indirect transfers of Colombian assets may trigger joint and several liability for the Colombian entity if the foreign transferor fails to comply, and digital asset transfers may also fall under these rules.

New reporting requirement for foreign shareholders changes

Companies must report any changes in their foreign shareholder structure.

Extended holding period for capital gains

The minimum holding period for capital gains tax on fixed asset sales is extended from two years to four years.

Simplification of GAAR Application

The special procedure previously required for the tax authority to apply the GAAR is eliminated.

Personal income tax

The top marginal income tax rate for individuals earning above 31,000 UVT will rise to 41%. (The tax value unit (Unidad de Valour Tributario – UVT) for 2025 is COP 49,799).