Key message

On October 29, 2026, the Government filed Bill No. 477 of 2026, the "Economic Rescue Law" (106 articles), with the House of Representatives. It lowers the corporate income tax rate, but raises payroll costs, broadens the VAT base and increases the burden on middle- and high-income individuals.

For most companies, the income tax savings alone do not offset the higher labor cost: the net effect must be measured case by case.

Legislative status. This is a bill: nothing described here is in force. Joint sessions of the economic committees are expected in the second half of November, with plenary votes in early December.

The ordinary legislative session ends on December 16, 2026; if the bill is not passed by then, the Government would need to call extraordinary sessions. The text may change substantially during the debates.

The five changes that matter most

• Payroll cost (from Jan 1, 2027): the exemption from SENA, ICBF and employer health contributions shrinks from salaries up to 10 monthly minimum wages (SMLMV) to only up to 2 SMLMV (partial between 2 and 3).
• VAT on technology (upon enactment): the VAT exclusion for software licenses for digital content, websites, hosting and cloud computing is repealed.
• Corporate income tax (tax year 2027): general rate drops from 35% to 33% (2027) and 31% (2028 onwards). Financial sector: 38% and 36%.
• General VAT (from Jan 1, 2028): the 5% rate is eliminated and the lists of excluded and exempt goods and services are rewritten.
• Regularization (until Jun 30, 2027): tax normalization (15%; 5% for digital assets) and reduced penalties and interest on debts with the DIAN.

Key measures

1. Labor cost (arts. 20–22)

This is the highest-impact change. Today, income-tax-filing companies do not pay SENA, ICBF or employer health contributions for employees earning less than 10 SMLMV. From January 1, 2027, the benefit would be limited as follows:

The employee's health contribution would no longer be a flat 4%; it would rise by brackets up to 8% (income above 20 and up to 25 SMLMV). For self-employed workers it would range from 12.5% to 15.5%.

This reduces take-home pay and puts pressure on salary negotiations, especially under net-salary-guaranteed contracts.

One point of the 4% family compensation fund contribution would be reallocated to health: a redistribution, not a new cost for the employer.

2. Corporate income tax (art. 57)

• General rate: 33% for tax year 2027 and 31% from 2028 (currently 35%).
• Financial and insurance sector: 5 additional points from 2027 to 2030 when taxable income is at least 120,000 UVT: total rate of 38% in 2027 and 36% from 2028 to 2030. The 100% surtax advance payment, due in two installments, remains.
• Minimum tax rate (15%): would apply only to entities of multinational groups with consolidated revenue of at least EUR 750 million in the prior year. Companies and groups below that threshold would no longer compute the minimum tax (TTD). Colombian subsidiaries of groups above it would remain subject to it.
• SIMPLE regime: no express changes to rates or thresholds.

3. VAT: two stages (arts. 27, 41–46 y 106)

Upon enactment (possibly December 2026 or early 2027):

Software licenses for the commercial development of digital content, and the supply of websites, hosting and cloud computing, become subject to the general 19% rate (items 20 and 21 of art. 476 of the Tax Code are repealed).

Benefits for electric and hybrid vehicles and other items under art. 468-1 are eliminated, as are paragraphs d) and h) of art. 481.

Spirits, wines and aperitifs become subject to the general VAT rate; so does online gambling, with foreign operators responsible for the tax.

The VAT exemption for exported services (art. 481, paragraph c) is not among the repealed provisions.

From January 1, 2028:

The 5% rate disappears (arts. 468-1 and 468-3 repealed): those goods and services would move to 19% unless included in the new lists.

The lists of excluded goods (art. 424), excluded services (art. 476) and exempt goods (art. 477) are replaced.

Still excluded, among others: interest and returns on credit, leasing, foreign exchange and derivatives transactions, debit and credit card fees, collective investment fund management fees, health, education and utilities.

The EfectIVA VAT refund for targeted households begins, calculated using e-invoicing data.

4. Individuals and withholding (arts. 47–51)

More people would pay tax, and at higher rates starting from middle-income levels.

Payroll teams would need to reconfigure their withholding systems. The bill does not state when the new withholding table takes effect; this should be clarified during the legislative process.

5. Wealth tax (arts. 66–68)

It becomes temporary (2027 to 2030 only). The threshold rises from 72,000 to 95,500 UVT of net worth as of January 1, with marginal rates of 0.5% and 1% (the 1.5% bracket is eliminated).

6. Normalization and DIAN relief (arts. 70, 71 y 99–104)

Normalization: 15% on undisclosed assets or nonexistent liabilities as of January 1, 2027; 5% for digital assets (crypto, stablecoins, NFTs). Return and payment due by June 30, 2027; late filing not allowed.

Overdue debts as of September 30, 2026: payment of 100% of principal, 40% of the penalty and interest at 5% per year.

Unfiled returns, amendments and formal non-compliance (including transfer pricing documentation and informative return) through September 30, 2026: comply and pay 40% of the penalty by June 30, 2027.

Ongoing disputes: settlement and court conciliation by paying 40% of penalties and the full principal.

Covers only DIAN-administered obligations (not municipal ICA or property tax) and cannot be combined with Legislative Decree 1419 of 2026.

7. E-invoicing and enforcement (arts. 88–93)

Invoices missing requirements: penalty of 5% of the transactions, up to 3,500 UVT (no cap for repeat offenses).

Failure to invoice: the higher of 5% of the prior month's net income and 5% of the median income for the business activity (CIIU code).

The DIAN could verify violations in person or remotely, and taxpayer explanations would be limited to those recorded in the inspection report.

8. Multinational groups (arts. 86–87)

Indirect transfer of Colombian companies: exceptions are tightened (20% threshold tested over the prior 12 months). The Colombian related party would be jointly liable for the foreign seller's taxes.

Digital assets: new permanent rules on source, tax basis and valuation; tokenization of Colombian assets would be treated as a sale of the underlying asset.

9. Other measures

RUGE: new stability regime for large investments (from 2,580,000 UVT), with a 20% income tax rate (projects starting 2027–2028) or 26% (from 2029), and an 8% dividend tax for non-residents.

Sector taxes: excise taxes on spirits, beer, cigarettes and vapes increase; the carbon tax rises; the sweetened-beverage tax is redesigned from 2028; the single-use plastics tax is repealed. Capital gains tax on lotteries and betting rises to 30%.

How does it affect your company?

Software and technology companies. Impact: 19% VAT on digital-content software licenses, hosting and cloud upon enactment; higher payroll cost for employees earning 3 to 10 SMLMV, who make up most of these teams. What to review: contracts and price lists (is VAT included in the price?), invoicing, VAT obligations on services from abroad and the 2027 payroll budget.

Companies providing services to their parent (shared service centers). Impact: higher labor cost which, passed on to the parent, raises the related-party price. Exported services keep their VAT exemption. If group revenue exceeds EUR 750 million, the 15% minimum tax still applies. What to review: transfer pricing policy and markup, intercompany agreements, export-of-services support and the minimum tax (TTD) calculation.

Financial sector entities. Impact: 38% rate in 2027 and 36% from 2028 to 2030 with taxable income of at least 120,000 UVT, plus a 100% surtax advance. VAT exclusions for interest, leasing, foreign exchange, card fees and collective investment fund fees remain. What to review: current and deferred tax and cash projections; advance payment schedule; payroll impact.

All companies. Impact: relief on penalties and interest until June 30, 2027, and new invoicing penalties. What to review: an inventory of debts, disputes and unfiled or incorrect returns as of September 30, 2026.

Key dates

Our recommendations

This is not the time for final decisions, but it is the time to prepare scenarios so you can act quickly once the final text is approved.

1. Model your 2027 budget with actual payroll. Quantify the added SENA, ICBF and health cost for each employee earning 2 to 10 SMLMV and compare it with the 2-point income tax saving.
2. Review software, hosting and cloud contracts. Identify which current contracts are VAT-excluded and how the 19% would be passed through, on both sales and purchases from foreign providers.
3. Take inventory of DIAN exposures. Debts, unfiled or incorrect returns, formal penalties and ongoing disputes as of September 30, 2026 may qualify for penalty reductions of up to 60%.
4. Multinational groups: confirm whether consolidated group revenue exceeds EUR 750 million to determine whether the 15% minimum tax still applies, and assess how higher labor costs affect transfer pricing.
5. Prepare payroll and IT teams to update withholding tables, health contributions and, in 2028, product classification for VAT.
6. Follow the bill. We will keep you informed of relevant changes during committee reports and debates.

Our team can help you quantify the impact on your company.

Legal notice

This bulletin summarizes Bill No. 477 of 2026 as filed on October 29, 2026, and is for information purposes only. Its content may change during the legislative process, and its provisions will only be enforceable once the law is passed, signed and enacted.

It does not constitute tax, accounting or legal advice for any specific case, nor an instruction to defer payments, filings or appeals. Before making decisions, consult your advisor based on the final text and your specific situation.

Short footer version: Informational content on a bill subject to change; not advice for any specific case.

Source: Bill No. 477 of 2026, as filed (106 articles). Estado del trámite

Abbreviations: ET, Estatuto Tributario (Tax Code); UVT, Unidad de Valor Tributario (tax value unit); SMLMV, salario mínimo legal mensual vigente (monthly minimum wage); IBC, ingreso base de cotización (contribution base); TTD, tasa de tributación depurada (minimum tax rate); RUGE, Régimen Único para Generar Estabilidad Empresarial (business stability regime); DIAN, autoridad tributaria (tax authority).

The content of this newsletter is merely informative, that´s why it cannot be used under any circumstances as advice on the matter described in it. If you need advice on any of the aspects discussed, our team of professionals will be willing to assist you. contacto@jadelrio.com