25 February 2026 Colombia establishes temporary net-worth tax for legal entities under State of Economic Emergency - On 24 February 2026, the Colombian Government issued Decree No. 0173, establishing a temporary net-worth tax for legal entities, effective from 1 March 2026, with rates of 0.5% or 1.6% depending on the type of entity.
- The tax applies to legal entities and de facto partnerships that are income tax filers, with exemptions for healthcare companies, state-intervened companies and public utility providers in affected areas.
- The taxable event is ownership of net worth exceeding UVT200,000 (approx. US$2.83m) as of 1 March 2026, and specific deductions are allowed for certain assets, including shares in domestic companies and fixed real estate used for environmental purposes.
- Taxpayers must file their tax returns by 1 April 2026 and pay 50% of the tax, with the remaining balance due by 4 May 2026.
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The Colombian Government, on 24 February 2026, issued Decree No. 0173, establishing a temporary net-worth tax applicable to legal entities, with tax rates of 0.5% or 1.6%. The new temporary tax is imposed in connection with the State of Economic Emergency (due to severe weather conditions) declared in Decree No. 0150 of 11 February 2026. Below is a summary of the most relevant aspects that may be of interest. In addition to the taxpayers already subject to the net-worth tax, Decree No. 0173 adds legal entities and de facto partnerships that are income and complementary tax filers. The decree provides for three exemptions: - Companies in the healthcare sector
- Companies intervened by the State
- Public utility service providers located in the area affected by the declaration of the economic, social and ecological emergency
The taxable event is the ownership, as of 1 March 2026, of a net worth (gross assets minus liabilities) equal to or exceeding 200,000 Unidad de Valor Tributario (UVT)1 (approx. US$2,828,520) For a corporate demerger that occurs between 24 February 2026 and 1 March 2026, the net worths of the demerged entities and the beneficiary entities must be aggregated. If the combined net worth reaches the threshold, the beneficiary company will be considered a taxpayer as if the demerger had not occurred. From total net equity, the taxpayer may deduct the net equity value (NEV)2 of the following assets held as of March 1: - NEV of shares, quotas, or equity interests in domestic companies, held directly or indirectly
- NEV of fixed real estate assets acquired and/or used for environmental control and improvement by public water supply and sewage companies
- Value of the technical reserve of Fogafin3 and Fogacoop4
- For credit union entities under Article 19-4 of the Colombian Tax Code, the NEV of members' capital contributions
For compensation funds, employee funds and trade associations, the tax base is gross assets minus liabilities as of March 1, insofar as they relate to taxable activities. This chart denotes the tax rates for various types of entities: General | 0.50% | Financial institutions, insurance companies, reinsurance companies, stockbrokers, agricultural brokerage firms, agricultural, agro-industrial or other commodities exchanges, and capital markets infrastructure providers | 1.60% | Legal entities and partnerships that are income tax filers and that carry out activities related to the extraction of coal (hard coal) under Consultation of Economic Activity (CIIU) code 0510, lignite coal under CIIU code 0520, and crude oil extraction under CIIU code 0610 |
The tax return must be filed on 1 April 2026, with payment of 50% of the tax. The remaining 50% is due by 4 May 2026. Given the short timeframe for the accrual of the tax, it is essential to review the tax base, taxable persons, applicable tax rate and exclusions to properly determine the tax liability. Considering the automatic constitutional review process to be carried out by the Constitutional Court with respect to this decree, taxpayers should also take into account the possibility of citizen intervention, which allows them to argue potential violations of constitutional principles and of the Statutory Law governing states of emergency. Decree No. 0173 was issued together with five other decrees enacted by the National Government, related to the School Feeding Program, environmental measures, reactivation of the agricultural sector, and other matters. | * * * * * * * * * * |
Endnotes1 UVT is a unit of measure that Colombian tax authorities use to calculate taxes, penalties, thresholds and tax obligations. The value of the unit is updated each year. 2 NEV is equal to an asset equity value, multiplied by the amount resulting from dividing net equity by gross equity as of 1 March 2026. 3 Fondo de Garantías de Instituciones Financieras, meaning "financial institutions guarantee fund" and referred to as "Fogafín," is a Colombian financial authority responsible for protecting commercial bank accounts of the public. 4 Fondo de Garantias de Entidades Cooperativas offers a savings insurance mechanism referred to as "Fogacoop" that guarantees the savings of the registered cooperative's savers, up to a maximum insured value. | | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: Ernst & Young S.A.S. Bogota Latin American Business Center, New York | | Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor |
Document ID: 2026-0519 |
