A legislative decree (Legislative Decree 0240 of 2026) issued on 12 March 2026 expands the scope of Colombia’s equity tax regime to bring permanent establishments (PEs) and branches of foreign companies within the regime. The decree, which applies as from 13 March, creates immediate obligations and opens a short-term opportunity for taxpayers to regularise past tax liabilities under favourable conditions. Below is a breakdown of what has changed and what actions affected taxpayers should consider.
Decree 0173 of 2026, issued in the context of the economic, social and environmental emergency, introduced an equity (net wealth) tax on legal entities as from fiscal year 2026. “Equity” for these purposes generally corresponds to a taxpayer’s net equity, as defined, reflecting a taxpayer’s economic capacity at a specific point in time and forming the basis of the equity tax.
Based on the decree, the equity tax applies at a rate of 0.5% on the gross assets minus liabilities of in-scope entities calculated at 31 March 2026, with a higher rate of 1.6% applying to the financial and extractive sectors. The tax applies where a legal entity's taxable income is equal to or greater than 200,000 tax value units (about USD 2,804,000). The tax may be recorded against reserves or 2026 profits/losses but is not deductible for corporate income tax purposes. Cooperatives may exclude member contributions and protection reserves. Covered legal entities were required to file a return by 30 March 2026 and must make two payments of the equity tax by 30 April and 1 June.
One of the most consequential changes in the March decree is the extension of the equity tax from legal entities and de facto partnerships to PEs and branches of foreign companies, substantially broadening the taxpayer universe.
As a result of these measures, nonresidents operating in Colombia through a branch or PE are now fully within the scope of the equity tax. A defensible attribution study is essential to support the equity calculation and reduce potential audit exposure.
The relief is not just a compliance exercise—it is a financial optimisation opportunity. The combination of deep penalty reductions and a historically low interest rate makes this one of the most advantageous regularisation windows in recent years. However, the benefits are limited in time. To maximise the opportunity, taxpayers should:
The measures introduced by Decree 0240 are complex, technical and highly time sensitive. Deadlines are approaching quickly, and the financial impact of inaction can be significant. Getting this right is not merely a compliance requirement—it is a strategic imperative.
Affected taxpayers should prioritise the following actions:
Martha Diovad Reyes Amaya
BDO in Colombia
Equity Tax
Decree 0173 of 2026, issued in the context of the economic, social and environmental emergency, introduced an equity (net wealth) tax on legal entities as from fiscal year 2026. “Equity” for these purposes generally corresponds to a taxpayer’s net equity, as defined, reflecting a taxpayer’s economic capacity at a specific point in time and forming the basis of the equity tax.Based on the decree, the equity tax applies at a rate of 0.5% on the gross assets minus liabilities of in-scope entities calculated at 31 March 2026, with a higher rate of 1.6% applying to the financial and extractive sectors. The tax applies where a legal entity's taxable income is equal to or greater than 200,000 tax value units (about USD 2,804,000). The tax may be recorded against reserves or 2026 profits/losses but is not deductible for corporate income tax purposes. Cooperatives may exclude member contributions and protection reserves. Covered legal entities were required to file a return by 30 March 2026 and must make two payments of the equity tax by 30 April and 1 June.
One of the most consequential changes in the March decree is the extension of the equity tax from legal entities and de facto partnerships to PEs and branches of foreign companies, substantially broadening the taxpayer universe.
Key Rules at a Glance
| Category | General Rule | Branches and PEs |
| Taxpayer | Legal entities and entities filing income tax returns (with previous exclusions maintained) | PEs and branches of foreign entities are added as taxpayers |
| Taxable Event | Net equity ≥ 200,000 UVT as of 1 Mar 2026 | Attributable net equity ≥ 200,000 UVT as of 31 Mar 2026 |
| Tax Base | Gross equity less liabilities | Attributable equity under the arm’s length principle (requires a technical study based on functions, assets personnel and risks) |
| Rate | 0.5% general / 1.6% financial and extractive sectors | Same rates |
| Filing and Payment | Filing: 1 Apr 2026 | Payments: 1 Apr and 4 May 2026 | Filing: 30 Apr 2026 | Payments: 30 Apr and 1 Jun 2026 |
As a result of these measures, nonresidents operating in Colombia through a branch or PE are now fully within the scope of the equity tax. A defensible attribution study is essential to support the equity calculation and reduce potential audit exposure.
Tax Relief Measures: A Strategic Window You Should Not Miss
| Relief Type | When It Applies | Key Requirements | Benefit | Deadline |
| Penalty & interest reduction | Tax, customs and FX liabilities overdue as of 31 Dec 2025 | Pay 100% of principal | 4.5% interest + only 15% of penalties | 30 Apr 2026 |
| Return corrections / omissions | Returns omitted or corrected up to 31 Dec 2025 (including transfer pricing obligations as of 30 Nov 2025) | File/correct and pay tax | 15% penalty, no interest | 30 Apr 2026 |
| Breach of formal obligations | Failures arising up to entry into force (excluding transfer pricing) | Comply with formal obligations | 2%–3% of gross income or assets | 30 Apr 2026 |
| Litigation settlement | Lawsuits filed before 31 Dec 2025 without final judgment | Pay 100% of disputed tax + partial penalties/interest | Up to 85% reduction in penalties and interest (4.5% rate) | 30 Jun 2026 |
| Tax normalisation | Omitted assets or fictitious liabilities as of 1 Apr 2026 | File independent return | 19% tax, no additional penalties or income impact | 31 Jul 2026 |
The relief is not just a compliance exercise—it is a financial optimisation opportunity. The combination of deep penalty reductions and a historically low interest rate makes this one of the most advantageous regularisation windows in recent years. However, the benefits are limited in time. To maximise the opportunity, taxpayers should:
- Conduct an assessment of outstanding liabilities;
- Quantify potential savings under each relief mechanism;
- Prioritise filings and payments ahead of tight deadlines; and
- Prepare robust documentation, especially for PE/branch equity attribution.
BDO Takeaway
The measures introduced by Decree 0240 are complex, technical and highly time sensitive. Deadlines are approaching quickly, and the financial impact of inaction can be significant. Getting this right is not merely a compliance requirement—it is a strategic imperative.Affected taxpayers should prioritise the following actions:
- Prepare equity attribution studies: Prepare robust, defensible analyses to determine the taxable base for PEs and branches.
- Conduct relief opportunity diagnostics: Identify and quantify benefits from penalty reductions, corrections and litigation settlements before deadlines expire.
- Obtain tax normalisation advisory: Request support in identifying, valuing and regularising omitted assets under the normalisation regime.
- Remain compliant: Prepare and review the equity tax filing in alignment with the updated rules, with a focus on accuracy and risk mitigation.
Martha Diovad Reyes Amaya
BDO in Colombia