On 7 May 2026, Colombia's Council of State granted a precautionary measure that provisionally suspends the legal effects of Articles 2 through 8 of Decree 572 of 2025. The decree had introduced changes to certain withholding tax and self-withholding rules, including higher special self-withholding rates and lower minimum thresholds for withholding on selected payments.

Background

Decree 572 of 2025, effective as from 1 June 2025, amended several provisions of the Single Regulatory Decree in Tax Matters (Decree 1625 of 2016). In particular, Articles 2 through 8 of Decree 572 revised certain minimum thresholds for withholding and adjusted the special self-withholding regime for selected economic activities.

What was suspended

The suspended provisions addressed, among other items:

• Increases to special self-withholding rates for certain activities
• Reductions to minimum thresholds for withholding on selected concepts (including certain services and. other income items)
• Adjustments to withholding rules for purchases of gold by international trading companies
• Changes to withholding mechanics for certain real estate acquisitions (including housing-related thresholds)

Effect of the suspension

A provisional suspension prevents the suspended provisions from producing legal effects while the suspension is in place, without constituting a final determination on validity. Directorate of National Taxes and Customs (DIAN) Press Release No. 070 indicates that, as from 8 May 2026 and until the precautionary measure is lifted or a final judgment from the Council of State becomes effective, withholding agents should apply the bases and rates that were in force before Articles 2 through 8 of Decree 572 of 2025 replaced them.

The suspension does not eliminate the obligation to perform tax withholding or self-withholding; rather, it affects which rules and rates apply for the matters covered by the suspended provisions.

April 2026 withholding tax return filed in May 2026

Market participants have discussed two alternative approaches for the April 2026 withholding tax return filed in May 2026, given that Decree 572 of 2025 was in force during April but the court-ordered suspension and DIAN's communication occurred before (or around) the filing period.

Approach 1 — Suspension does not affect the April return

Under this approach, withholding is generally triggered at the time of payment or accrual. Because a provisional suspension is not a final annulment and is generally viewed as non-retroactive, the rules in force at the time of the April payments would be applied when preparing the April return.

Approach 2 — Suspension affects the April return

Under this approach, because the April return may not have been filed before the suspension took effect, the taxpayer would not yet have a consolidated legal situation for that period. Accordingly, at the time of filing, the suspended provisions would not be applicable, and the prior rules and rates would be used when determining the April withholding liability. This approach could be questioned by the tax authority, particularly in light of DIAN's statement that the effects apply as from 8 May 2026.

Entities may wish to document the basis for the approach adopted, including the timing of payments, system implementation considerations and the facts surrounding the filing of the April return.

Implications for multinational enterprises

Multinational enterprises with Colombian operations may need to review withholding and self-withholding calculations affected by the suspended provisions, including processes used to prepare the April 2026 withholding tax return filed in May 2026. Businesses may also need to monitor developments in the judicial proceeding, noting that the Council of State has temporarily suspended the effects of the challenged provisions while assessing the merits of the nullity action and a final decision on their validity remains pending.