Colombia: Constitutional Court Strikes Down Emergency Tax Decree – Key Implications for Businesses

The Constitutional Court has declared Legislative Decree 1474 of 2025 unenforceable, removing a series of tax measures introduced during Colombia’s economic emergency.

The ruling (Judgment C-079 of 2026) has immediate implications for taxpayers, particularly those who paid or were subject to taxes under the decree.

What Changed?

The now-invalid decree had introduced temporary tax measures to support government spending during the state of economic emergency.

With the Court’s decision:

• those measures are no longer valid
• and in many cases, payments must be reversed

Direct Taxes

• Taxes created or modified under the decree must not be declared or collected
• Any amounts already paid must be refunded by the tax authority (DIAN)

Indirect Taxes

• Indirect taxes paid during the decree’s validity may also be refunded
• Taxpayers must demonstrate they actually bore the cost of the tax

The tax authority is required to:

• use existing refund mechanisms, or
• introduce a specific process within 30 days

Existing Rights Remain Protected

The Court confirmed that “consolidated legal situations” remain valid.

In practice, this means:

• taxpayers who obtained tax benefits while the decree was in force
• will retain those benefits, despite the decree being overturned

What This Means for Businesses

• Companies that paid taxes under the decree should review potential refund claims
• Groups operating in Colombia should assess exposure and documentation
• Timing will be important, as refund mechanisms may evolve quickly

Bottom Line

The decision effectively rolls back emergency tax measures, but creates a short-term compliance and refund window for affected businesses.

Early review and action will be key.

By LLOREDA CAMACHO & CO, Colombia, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact colombia@transatlanticlaw.com 

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