Preparado por Tomás Londoño Vélez
Through Legislative Decree 1390 of 2025, the national Government declared a State of Economic and Social Emergency throughout the country, with the aim of addressing a significant fiscal deficit projected for fiscal year 2026 and ensuring the financing of the General State Budget, after several fiscal initiatives failed to pass Congress.
In furtherance of this declaration, the Government issued Legislative Decree 1474 of 2025, which concentrated most of the extraordinary tax measures, with direct impacts on companies, financial institutions, and individuals.
Tax Scope of Decree 1474 of 2025
From a business perspective, Decree 1474 of 2025 temporarily reshaped the tax system by introducing measures that affected both corporate tax burdens and the net worth taxation of individuals.
Among the main changes were:
- A temporary increase in income tax for the financial sector, establishing a 15% surcharge on the general tax rate, raising the sector’s effective tax burden from 35% to 50%.
- Significant impacts on the oil and coal industries, through adjustments to sector-specific taxation and extraordinary contributions.
- A modification of the taxable event for the net worth tax (Article 294-3 of the Tax Code), reducing the threshold for tax liability from 72,000 UVT (COP 3,770,928,000 in 2026) to 40,000 UVT (COP 2,094,960,000 in 2026), substantially expanding the base of taxable high-net-worth individuals.
From a quantitative standpoint, these measures implied material increases in effective tax rates and in the number of taxpayers subject to net worth taxation, with direct effects on cash flow, tax planning, and investment decisions.
Settlement Measures and Positive Effects on Revenue Collection
Notwithstanding the above, the decree also introduced favorable measures in sanctioning and settlement matters, allowing, among others, taxpayers with outstanding tax, customs, and foreign exchange obligations with the DIAN as of December 31, 2025, to become compliant by March 31, 2026, by paying:
- 100% of the outstanding principal.
- Late payment interest at a rate of 4.5%.
- 15% of the applicable penalty, provided it was not lower than the minimum statutory penalty.
These measures encouraged significant revenue collection through the normalization of delinquent tax accounts, generating immediate liquidity for the State and fiscal relief for taxpayers.
What Did the Constitutional Court Decide?
On January 29, 2026, the Constitutional Court resolved to provisionally suspend Legislative Decree 1390 of 2025, which entails the suspension of the decrees issued under its authority, including Decree 1474 of 2025. As a result:
- New extraordinary tax burdens are frozen.
- Taxes created under the emergency regime that have not yet been consolidated may not be enforced.
- Legal uncertainty remains until a final ruling on constitutionality is issued.
Impact on Companies and Taxpayers
From a corporate standpoint, the suspension represents immediate relief in terms of tax planning, particularly for the financial, extractive, and large taxpayer sectors.
However, the decision does not eliminate fiscal risk, as the Court may uphold the decree in its final judgment, and the Government could pursue ordinary tax reforms with similar content.
Future Scenarios and Effects of a Potential Unconstitutionality Ruling
If the Constitutional Court declares the decree unconstitutional, a critical aspect will be the non-retroactive effect of the decision. In that scenario, taxes collected during the validity of the decree should remain in force, under the principles of legal certainty and fiscal stability. Additionally, taxpayers who benefited from settlement measures and tax relief provisions should retain those benefits.
This approach avoids systemic risks related to additional payments and/or mass refunds and tax litigation that could otherwise affect the State’s financial stability.
Conclusion for the Business Sector
The suspension of the decree marks a critical pause in extraordinary fiscal policy, but it does not eliminate the structural risk of tax adjustments in 2026.
For sectors such as financial services, oil, mining, large taxpayers, and high-net-worth individuals, fiscal volatility will continue to be a strategic factor in investment decision-making and corporate planning.