Colombia’s 2026 Economic Rescue Bill proposes corporate income tax reductions, investment incentives, changes to the global minimum tax and VAT rules, higher wealth and excise taxes, and personal income tax reforms to address fiscal deficits and public debt.
Colombia’s Chamber of Representatives (lower house of parliament) announced on 29 October 2026 that it is considering the Economic Rescue Law Bill of 2026, submitted by the Ministry of Finance.
The bill aims to address Colombia’s persistent fiscal deficits, rising public debt, and increasing interest payments, which the government considers threats to economic stability. Its six-pillar strategy focuses on reducing state operating expenditure, introducing targeted VAT measures to protect vulnerable populations, and encouraging investment and job creation to support economic growth and prevent a forced fiscal adjustment.
The main measures are summarised below:
Corporate income tax & investment incentives
- General tax rate reductions: The statutory corporate income tax rate drops from 35% to 33% starting 1 January 2027, and further reduces to 31% starting 1 January 2028.
- Financial sector surcharge: The 5% financial sector surcharge on institutions with taxable income of at least 120,000 UVT is extended until 31 December 2030. This results in a combined corporate income tax rate of 38% in 2027, decreasing to 36% for 2028–2030.
- The RUGE regime (Régimen Único para Generar Estabilidad Empresarial): A new 16-year legal stability regime will offer investment incentives, including reduced corporate tax rates of 20% for qualifying projects starting in 2027–2028 and 26% from 2029 onward. It also lowers withholding tax on dividends paid to non-residents from 20% to 8%, with accelerated depreciation and a 30% local procurement requirement.
Global minimum tax (TTD) & transfer pricing
The Depurated Minimum Tax Rate (TTD) remains at 15%, but its scope is restricted to companies belonging to multinational groups with consolidated annual revenues of at least EUR 750 million. Domestic companies outside multinational groups are fully exempt.
Value added tax (VAT/IVA) reforms
- Elimination of reduced rates: The 5% reduced VAT rate will be abolished from 1 January 2028, with most previously covered goods, including software licences, hybrid vehicles, and electric vehicles, subject to the standard 19% VAT rate.
- Digital & low-value imports: Repeals the USD 200 low-value import VAT exemption and imposes a 19% VAT on online gambling and sports betting deposits starting 1 January 2027.
- Direct monetary refund (EfectIVA): Launches on 1 January 2028 to protect the lowest 6 income deciles (100% refund for deciles 1–3, up to 50% refund for deciles 4–6). Beneficiaries will receive an advance liquidity payout in December 2027 before base expansion.
Wealth & property taxes
The liquid wealth tax threshold will increase from 72,000 UVT to 95,500 UVT, with rates of 0.5% on wealth between 95,500 and 145,500 UVT and 1% on amounts exceeding 145,500 UVT. The temporary tax will expire on 31 December 2030.
Stamp duty
The 70% allocation of National Stamp Duty revenues to the Pension Fund for Territorial Entities (FONPET) will be maintained.
Excise duties & public health taxes
- Tobacco & e-cigarettes: Increases cigarette taxes to COP 7,823 per pack in 2027 and COP 11,200 in 2028, plus a 10% ad valorem tax. Vapes and e-cigarettes will be taxed at COP 1,000 per ml in 2027 and COP 2,000 in 2028, plus a 30% ad valorem tax. Rates will be indexed to inflation plus four percentage points.
- Alcoholic beverages: Introduces a uniform specific tax of COP 1,000 per litre of pure alcohol, indexed to inflation plus four percentage points, alongside ad valorem rates of 10% for beer and 35% for spirits and wine.
- Ultra-processed sweetened drinks: From 1 January 2028, extends taxation to drinks containing artificial sweeteners, with rates of COP 45 per 100 ml for drinks containing less than 9g of sugar and COP 76 per 100 ml for those containing 9g or more.
Carbon pricing, normalisation & relief schemes
- Carbon tax expansion: Increases to 0.876 UVT per ton CO2eq in 2027, 1.23 UVT in 2028, and 1.59 UVT from 2029 onward, while capping carbon-neutral non-causation exemptions at 25%.
- Single-use plastics repeal: Completely repeals the Single-Use Plastics Tax.
- Tax normalisation (tax amnesty) and settlement relief: Establishes a 2027 Tax Normalisation scheme (15% general assets, 5% digital/crypto assets as of 1 January 2027). Offers transitory settlement relief for tax arrears up to 30 September 2026, allowing a 60% penalty reduction and a 5% interest rate if settled by 30 June 2027.
Personal income tax
- New bracket & top rate unification: Introduces a new 9% marginal tax bracket for net taxable income between 720 UVT and 1,090 UVT. Net taxable income exceeding 8,670 UVT will be subject to a unified top marginal rate of 39%.
- Tighter deduction caps: The annual 25% automatic exempt labour income cap is lowered from 790 UVT to 630 UVT, while the global cap on general exemptions and deductions is reduced from 1,340 UVT to 1,180 UVT.
