In Colombia, tax-resident individuals and local entities are subject to income tax on their worldwide income and capital gains. They are also required to report their worldwide net assets.

Meanwhile, non-resident individuals and entities domiciled abroad are subject to income tax only on their Colombian-sourced income and capital gains and should report their net assets located in Colombia. For details on the tax residency rules applicable in Colombia, see 7.1 Requirements for Domicile, Residency and Citizenship.

Colombian-sourced income includes income arising from the rendering of services inside Colombian territory, the transfer of assets located in Colombian territory at the time the title transfer takes place, and the exploitation of tangible or intangible assets located inside the country.

Concerning the indirect transfer of assets, income obtained by the transfer of entities or assets in Colombia through the transfer of shares, participations or rights in foreign entities or structures may also trigger income tax in Colombia.

Income Tax

Ordinary income v presumptive income

Income tax in Colombia is determined based on the taxpayer’s taxable income (ie, using the ordinary system calculation: revenues minus costs and deductions) or presumptive income.

Presumptive income is equivalent to a percentage of the taxpayer’s net equity in the prior taxable year. Taxpayers are only required to pay income tax under this system when the presumptive income basis is higher than the taxable income under the ordinary system. In the case of resident individuals, presumptive income should be compared to the “general basket income” only (as explained below).

Presumptive income as from FY 2026 is equivalent to 0% of the taxpayer’s net equity of the prior taxable period.

Income tax rate

Resident individuals

Tax-resident individuals are subject to progressive income tax rates ranging from 0% to 39%.

Non-resident individuals

Income tax derived from non-residents is generally collected through a tax withholding mechanism (at a 20% general rate, with some specific exceptions described in the “Tax withholding mechanism applicable to non-resident individuals and foreign entities” subsection, below), the filing of an income tax return or by a combination of both.

The applicable collection mechanism depends on the income tax characterisation and whether the appropriate tax withholding was applied.

The income tax rate applicable to non-resident individuals liable to file an income tax return in Colombia is 35%.

Dividends paid out of profits taxed at the corporate level are subject to a 20% tax rate. In the event dividends are paid out of profits that were not taxed at the corporate level, these will be subject first to the general tax rate applicable to local entities and then to the 20% dividends tax indicated above. The latter is applied once the general income tax has been reduced.

Colombian entities

The general income tax rate applicable to Colombian entities is 35%.

Dividends paid to Colombian entities out of profits already taxed are subject to a 10% income tax rate. In the event dividends are paid out of untaxed profits, these will be subject first to the general tax rate applicable to local entities and then to the dividend tax of 10% indicated above, which applies to the net dividend amount once the general income tax rate has been applied.

The estimated effective tax rate for dividends derived from untaxed profits is 41.5%.

Foreign entities

As in the case of non-resident individuals, income tax derived from foreign entities is generally collected through a tax withholding mechanism, the filing of an income tax return or by a combination of both.

The general income tax rate applicable to foreign entities liable to file an income tax return in Colombia is the same as that applicable to Colombian entities (35%).

In the case of dividends, the rules described for non-resident individuals are also applicable to foreign entities.

Determination of taxable income (special rules)

Basket system applicable to resident individuals

Resident individuals are subject to a basket system, where income is characterised in different baskets with the following determination rules.

General basket – this includes labour income, capital income and non-labour income. The following exemptions, reliefs or deductions are available for determining taxable income in this basket:

• Revenues deemed as non-taxable income:
1. mandatory social security contributions; and
2. voluntary contributions to the individual’s pension saving scheme without exceeding 25% of the individual’s annual income, limited to 2,500 Tax Units (approximately USD38,053).
• Deductions:
1. 10% of labour payments made to individuals with dependants not exceeding 32 Tax Units (approximately USD487) per month or 72 Tax Units (approximately USD1,096) per dependant up to a maximum of four dependants; and
2. prepaid health insurance payments not exceeding 16 Tax Units (approximately USD243).
• Exempted income:
1. 25% of the total amount of labour income, not exceeding 790 Tax Units per year (approximately USD12,025); and
2. voluntary pension funds and AFC accounts (income exclusively used for housing purchases) contributions not exceeding 30% of the individual’s annual income, limited to 3,800 Tax Units (approximately USD57,841).

The above-mentioned tax benefits are applicable if they do not exceed 40% of the individual’s annual income limited to 1,340 Tax Units (approximately USD20,397).

Pensions basket – pensions not exceeding 1,000 Tax Units (approximately USD15,221) are exempted. Any amount exceeding this amount will be subject to income tax at the general progressive tax rates.

Dividends basket – dividends are taxed at the general progressive income tax rates. For dividends paid out of untaxed profits at the corporate level, these will be subject to the general tax rate applicable to local entities, depending on the period in which they are paid or accrued. The progressive income tax rates will apply once the entity’s income tax rate is reduced.

In addition, the following special tax withholding rules must be observed:

• dividends not exceeding an amount of 1,090 Tax Units (approximately USD16,591) are subject to tax withholding at a 0% rate; and
• dividends exceeding 1,090 Tax Units (approximately USD16,591) are subject to tax withholding at a 15% rate.

Individuals are also able to apply a 19% marginal tax credit upon their dividends’ taxable income exceeding 1,090 Tax Units (approximately USD16,591) within their annual income tax return.

Tax withholding mechanism applicable to non-resident individuals and foreign entities

Payments to foreign entities and/or non-resident individuals are generally subject to tax withholdings according to their nature, as follows.

• Direction or management fees paid directly or indirectly to parent companies or home offices: 33%.
• Technical services, technical assistance or consulting services, rendered in Colombia and from abroad: 20%.
• Interest, fees, rental income, royalties, exploitation of software, services and, in general, all personal service compensation deemed as Colombian source income: 20%.
• Interest when loans are granted for one year or more: 15%.
• Capital gains: 15%.
• Dividends: 20%, subject to the rules described above in connection to dividends paid out of taxed and untaxed profits.
• Payments made to non-resident individuals and foreign entities with a significant economic presence in Colombia: 10%.

If Colombian-sourced payments are not subject to income tax withholdings, the foreign entity or individual will be required to file an income tax return in Colombia. However, if income tax withholdings are applied in their entirety, this will be the final tax liability.

Tax treatment of payments made abroad may change if a double taxation treaty applies. Therefore, analysis should be carried out on a case-by-case basis.

Currently, Colombia has 14 enforceable double taxation treaties: with the Andean Community of Nations (Bolivia, Ecuador and Peru), Canada, Czech Republic, Chile, Spain, South Korea, Switzerland, India, Portugal, Mexico, the United Kingdom, Italy, Japan and France.

Controlled foreign corporations – CFC Regime

Colombian income taxpayers are required to report, within their income tax returns, passive income earned through controlled foreign corporations (CFCs).

Any entity being controlled by one or more tax residents in Colombia (subordinated or related parties) and not being deemed as domiciled or resident in Colombia, may be deemed to be a CFC for tax purposes. In order to determine the existence of control, the definition of subordinate entities and foreign related parties applicable for transfer pricing purposes must be observed. Note that there is a presumption of control when the entity is in a tax haven.

Once the entity is deemed to be a CFC, any individual or entity with a direct or indirect participation of 10% or more in the capital stock or results of the CFC must include in their income tax return the income, minus costs and expenses related to the passive activities carried out by the CFC, and pay tax on it. If the CFC’s passive income represents 80% or more of the entity’s income, it is presumed that all income, costs and deductions would be considered as passive and therefore would be subject to the CFC regime. Conversely, if the CFC’s active income represents 80% or more of the entity’s income, it is presumed that all income, costs and deductions would be considered as active and therefore would not be subject to the CFC regime.

Passive income is considered as income derived from:

• dividends, interest or financial income;
• the transfer or exploitation of intangible assets, disposals or assignment of rights over assets that generate passive income;
• the sale or lease of real estate, the purchase or sale of tangible assets acquired or alienated from, for or on behalf of a related party, that are produced and used in a jurisdiction other than where the CFC is domiciled; and
• the provision of technical services, technical assistance, administrative, engineering, architectural, scientific, qualified, industrial and commercial services, for or on behalf of related parties in a jurisdiction other than where the CFC is domiciled.

A CFC’s net profits from passive income must be recognised in proportions equivalent to the taxpayer’s participation in the CFC’s capital or profits on an accrual basis and not a cash basis.

Capital Gains

Capital gains are defined as extraordinary income that is not related to the activities typically carried out by the taxpayer. The activities that trigger capital gains are specifically listed in the Colombian Tax Code (CTC) as follows:

• gains from the direct or indirect sale of fixed assets that have been held by the taxpayer for two years or more;
• profits obtained in the liquidation of legal entities, which do not correspond to undistributed profits or reserves;
• gains resulting from inheritances, legacies and donations (gifts); and
• prizes, awards, lotteries and gambling earnings.

Life insurance indemnities are taxed as capital gains, but only on the amount that exceeds 3,250 Tax Units (approximately USD49,469).

Distributions made by foreign trustees, private interest foundations or other similar fiduciary arrangements to Colombian tax residents are considered as gifts subject to capital gains tax.

The tax rate applicable to capital gains is 15%. As an exception, gains from lotteries, draws and gambling are subject to a flat rate of 20%.

Generally, the taxable base is the registered value of the assets or rights as of 31 December of the previous year.

Net Worth Tax

Individuals

Law 2277 of 2022 re-introduced a net worth tax applicable as of FY 2023 to individuals with large/high-value estates.

Net worth tax is levied mainly on resident individuals but also on non-resident individuals with respect to the equity they own in Colombia, as well as non-resident entities, with respect to assets located in Colombia such as real estate, yachts, boats, art, aircraft or mining or oil rights (other than shares, accounts receivables, portfolio investments, and/or financial leasing contracts with entities or persons resident in Colombia).

Net worth tax rate is 0.5% for the portion of the taxable equity exceeding 72,000 Tax Units (approximately USD1.096 million) and 1% for the portion that exceeds 122,000 Tax Units (approximately USD1.857 million). A temporary additional tax rate of 1.5% applies during FY 2023 to 2026 upon the amount exceeding 239,000 Tax Units (approximately USD3.638 million).

For the determination of this tax, the cost basis of the taxpayer’s primary residence could be excluded from the taxable base up to 12,000 Tax Units (approximately USD182,656).

Entities

For legal entities, Legislative Decree 0173 of 2026 introduced a wealth tax only for fiscal year 2026, applicable to taxpayer legal entities and de facto companies that are income tax filers, as well as permanent establishments (including branches) of foreign entities.

The tax is triggered by the possession of wealth as of 1 March 2026 equal to or exceeding 200,000 Tax Units (approximately USD3.04 million); the applicable rates are 0.5% as the general rule and 1.6% for certain taxpayers in the financial, insurance, securities market, and coal, lignite and crude oil extraction sectors.

The taxable base is the gross equity held as of 1 March less the taxpayer’s outstanding debts, subject to the exclusions expressly provided by the rule.

Other Taxes

The following taxes are also relevant to individual clients, estates and foundations.

Value-added tax – VAT

VAT is triggered on the import of goods into the country and rendering services when the direct user or recipient is located in Colombia. Certain goods (livestock, certain fruits and vegetables, seeds and others) and services (catering services for companies, food preparation services or bar services) are excluded from VAT. The general rate is 19%, but certain goods and services are subject to a 5% rate (coffee, corn for industrial use, agricultural machinery, prepaid medicine plans, security services and temporal services).

Industry and commerce tax

A municipal tax is triggered on revenues derived from the performance of industrial, service and commercial activities within a Colombian municipality at an applicable rate of 0.7% to 1%. The tax is triggered on gross income, excluding revenues for exports, proceeds from the sale of fixed assets, refunds, subsidies and withholdings.

Financial transactions tax

Financial transactions tax is imposed on any transaction whereby funds held by a Colombian entity in Colombian bank accounts are disposed of (eg, debits on bank accounts). The taxable base is the amount of funds withdrawn. The applicable rate is 0.4% and it is withheld and collected by the financial entities through which the transactions are conducted. This tax is generally levied on all financial transactions.

“SIMPLE” tax regime

As of 2020 (Law 2010 of 2019), a simplified tax regime was established for resident individuals and local entities whose prior year’s gross income does not exceed 100,000 Tax Units (approximately USD1.52 million) and who carry out certain economic or commercial activities (eg, owning a small shop, micro-market or hair salon), or who offer mechanical/technical services and consulting services, etc. A lower threshold of 12,000 Tax Units (approximately USD182,656) applies to individuals whose primary income derives from professional, consulting, or scientific services.

The SIMPLE tax regime unifies income tax, industry and commerce tax, VAT and excise tax for taxpayers registered under this regime. These taxpayers are obliged to file a unified annual tax return (although there are advance payments every two months) and make a unique tax payment at a rate between 1.2% and 8.3% on their gross income earned, depending on their economic activity code.

Inheritance and Gifts

Inheritance and gifts are deemed extraordinary income subject to the capital gains tax regime.

As mentioned in 1.1 Tax Regimes, the following extraordinary income is considered as exempted for capital gains purposes:

• the deceased’s primary residence – 13,000 Tax Units (approximately USD197,877 for 2026);
• the deceased’s real estate property other than their primary residence – 6,500 Tax Units (approximately USD98,939 for 2026);
• value inherited by the deceased’s surviving spouse and heirs – 3,250 Tax Units (approximately USD49,469 for 2026);
• assets or rights received by individuals not considered as heirs or a surviving spouse – 20% of the assets’ or rights’ value;
• assets or rights gifted or transferred by the deceased during their lifetime that were received gratuitously by a beneficiary – 20% of the assets or rights value without exceeding 1,625 Tax Units (approximately USD24,735 for 2026); and
• any books, clothing, personal belongings and furniture belonging to the deceased – 100% of the assets’ value.

Transfer of Assets

Tax exemptions applicable on transfer of assets should be analysed on a case-by-case basis. As an example, in the case of real estate, Article 44 of the CTC establishes non-taxable income proportions, from 10% to 100% of the profits on the sale of a property used as the taxpayer’s residence, as long as the property was acquired between the years 1978 and 1986.

Income tax planning alternatives should be analysed on a case-by-case basis.

As an example, anticipating real estate property disposal/transfer, taxpayers could apply for a step-up in the tax basis (costs) by applying the rule established in Article 72 of the CTC, which allows them to take the cadastral official appraisal as the asset’s fiscal cost which can be adjusted/increased at the taxpayer’s request.

Note, however, that the application of Article 72 could be subject to some conditions and limitations. It offers a basis step‑up for duly reported real estate held as fixed assets only, constrained by prior‑depreciation adjustments, valuation floors and Tax Office scrutiny under Article 90 CTC, as well as potential local property tax impacts when self‑appraisals are increased.

In Colombia, pre-immigration and exit planning is not based on a special tax regime, but on managing the timing of when tax residence is triggered and properly documenting tax-residence acquisition or cessation upon arrival and departure.

Pre-arrival steps typically include identifying foreign assets that will become reportable once resident, reviewing exposure under the CFC regime for interests in foreign entities, and addressing potential net worth tax exposure for high net worth individuals.

For definitional and compliance background, see 7.1 Requirements for Domicile, Residency and Citizenship and 1.1 Tax Regimes. However, the appropriate planning should be determined on a case‑by‑case basis.

There are no specific tax rules or planning mechanisms relating to real estate owned by individuals who are non-residents or non-citizens. As a general rule, real estate located in Colombia is subject to taxation in the country regardless of whether or not the owner is a Colombian tax resident/citizen.

On average, Colombia has a tax reform every two years. This situation leads to great uncertainty and taxpayers are obliged to review their structures regularly. Fear of tax uncertainty leads many taxpayers to consider implementing estate-planning structures located in jurisdictions with greater legal stability or that have an enforceable investment protection treaty with Colombia.

Regarding any real or perceived abuses/loopholes in tax laws, the OECD has praised Colombia for its high level of commitment to the international standard for transparency and exchange of information. After an assessment of the domestic legal framework by the OECD, Colombia obtained an overall rating of “compliant”, due to its legal provisions on financial information and its widening network of treaties on exchange of information.

On 25 May 2018, OECD countries agreed to invite Colombia to join the OECD as a member of the organisation after subjecting it to in-depth reviews by 23 OECD committees, and the introduction of major reforms seeking to align its legislation on taxation, anti-bribery, and trade and labour issues, among others, to OECD standards. On 28 April 2020, Colombia officially became the 37th OECD member country.

Colombia has achieved tax transparency and met global reporting requirements using the following framework.

Exchange of Information

Colombia has entered into several agreements for the exchange of tax information. For a list of countries with which Colombia has agreed to share information under the Common Reporting Standard (CRS), see the OECD website.

The OECD – Global Forum’s Peer Review of the Automatic Exchange of Financial Account Information 2025 Update, published in December 2025, remains the most recent substantive report on the implementation of the Automatic Exchange of Information (AEOI)/CRS standard. Recent updates to the OECD’s AEOI commitments list show that additional jurisdictions are scheduled to begin exchanges: Cameroon in 2026; Mongolia, Papua New Guinea and Paraguay in 2027; and Fiji, Tunisia and Zambia in 2028. The OECD also announced that Cabo Verde committed to start CRS exchanges by September 2027, while Morocco, despite its earlier voluntary commitment to begin exchanges in 2025, had not yet started and is now expected to do so by 2028 at the latest.

FATCA

In relation to the exchange of information, the Colombian and US governments have an enforceable Intergovernmental Agreement Model 1 (IGA), within the framework of Law 1666 of 2013, which made the Foreign Account Tax Compliance Act (FATCA) mandatory for Colombian financial institutions and taxpayers. The IGA was implemented by means of Resolution 60 of 2015, issued by the Colombian Tax Office (CTO).

SARLAFT

Colombia’s AML and CFT framework (Sistema de Administración del Riesgo de Lavado de Activos y de la Financiación del Terrorismo, or SARLAFT) was established pursuant to Law 526 of 1999 and Law 1121 of 2006. Under this framework, financial entities supervised by the Superintendencia Financiera de Colombia are required to implement a comprehensive risk management system aimed at preventing and detecting money laundering and the financing of terrorism. As part of their SARLAFT obligations, these entities must apply enhanced due diligence (know-your-customer or KYC) procedures to identify and report to the Financial and Information Analysis Unit (Unidad de Información y Análisis Financiero, or UIAF) the ultimate beneficial owners of their clients, understood as the natural persons who ultimately own or control, directly or indirectly, a given entity or structure. This includes the obligation to detect and report suspicious transactions to the UIAF, as well as to maintain adequate records and documentation supporting the identification of the beneficial ownership chain.

Ultimate Beneficial Ownership

Taxpayers are required to identify and report to the CTO the ultimate beneficial owner of legal entities and non-corporate structures such as trusts and other fiduciary businesses, collaboration agreements, private capital funds and pension funds.

The tax reform enacted in September 2021 (Law 2155) included some changes to the definition of the ultimate beneficial owner, incorporating a broader definition in the case of non-corporate structures, in which settlors, trustees, fiduciary or financial committees, and conditioned beneficiaries, among others, may be deemed ultimate beneficial owners for the purposes of the aforementioned report. Law 2155 of 2021 also created the Beneficial Owners Registry (Registro Único de Beneficiarios Finales, or the “RUB”) in order to regulate the taxpayers who are obliged to report information about ultimate beneficial owners and manage said information.

For the purposes of the RUB, the definition of ultimate beneficial owners will depend on which subject provides the report, as follows.

• For legal entities, the ultimate beneficial owner will be the shareholder who directly or indirectly, individually or jointly, controls 5% or more of the voting rights or economic benefits. In the event the ultimate beneficial owner cannot be identified, the legal representative or general manager will be regarded as the ultimate beneficial owner.
• In the case of non-corporate structures, the ultimate beneficial owner will, under certain circumstances, be the settlor, trustee, beneficiary or anyone who possesses ultimate control.

First submissions to the RUB had to be completed before 31 July 2023 for legal entities/structures established before 31 May 2023. New legal entities or non-corporate structures established after 31 May 2023 must comply with the report within the two months following their inscription or obtaining their tax ID. Information provided to the RUB must be updated (if applicable) on the first day of January, April, July and October every fiscal year. Failure to comply with the reporting obligations, or the submission of incomplete or erroneous reports will trigger penalties for the taxpayers concerned.

This information will not be available to the public, but as set forth in Law 2195 of 2022 there will be some government entities that, in compliance with their legal and constitutional functions, will have guaranteed access to the information contained in the RUB (ie, the CTO, the Public Prosecutor’s Office, the General Comptroller’s Office, the Superintendence of Companies and Superintendence of Finance, among others).

Rules Against Tax Haven Practices

The national government enacted Decree 1966 of 2014 and Decree 2095 of 2014, which established the official list of jurisdictions that are deemed as low-tax jurisdictions for Colombian tax purposes.

Angola, Antigua and Barbuda, Qatar, Kuwait, Hong Kong, Trinidad and Tobago, the Seychelles, Yemen, Lebanon and the Bahamas, among others, were included in the official list.

The Colombian government may review and modify the list of low-tax jurisdictions pursuant to the criteria contemplated in Article 260-7 of the CTC to determine if any current jurisdictions may be excluded or if additional jurisdictions need to be included. This list has not recently been updated.

Anti-Abuse Rules

Article 869 of the CTC established a tax anti-abuse rule. This rule allows the CTO to re-characterise or reconfigure any operations or series of operations that may constitute abuse for tax purposes and disregard their effect.

Conduct is considered abusive if:

• the transaction is not reasonable from a commercial and economic perspective;
• a high tax benefit is achieved but is inconsistent with the risks undertaken by the taxpayer; and
• the execution of a structurally correct legal act or business is apparent, but its content hides the true will of the parties.

The process of re-characterisation or reconfiguration of a potentially abusive operation would have to be initiated by the CTO within the term of expiration of the statute of limitation of the corresponding tax return. Relevant definitions and procedures applicable to the CTO in order to apply tax anti-abuse rules are established in Resolution 4 of 2020.

Transparency and Privacy

Colombia balances transparency with privacy through statutory tax secrecy rules and data protection law. Tax returns data is confidential under Article 583 of the CTC and may be used by the CTO only for tax control, assessment and administration. Beneficial ownership data filed in the RUB is not public; access is granted only to competent authorities under Law 2195 of 2022. In parallel, the habeas data framework (regulated by Law 1581 of 2012 and Law 1266 of 2008) imposes purpose limitation, confidentiality and security obligations on data processing, including for tax authorities and financial institutions reporting under the CRS, FATCA or the RUB.

Most Colombian companies are family-owned. These companies are usually founded and managed by a matriarch or patriarch. Other family members carry out other high management roles in the company. In most cases, the matriarch/patriarch is unwilling to turn over wealth and grant control to younger generations until their passing, or until they are no longer capable of handling the company’s affairs.

As Colombia has forced heirship rules forcing the testator to assign certain compulsory portions, applicable to half of their estate, even against their will, Colombian families are constantly concerned about implementing estate and succession planning solutions to ensure a successful turnover of wealth, allowing the family estate to increase in value over time.

Colombian families have become increasingly global. This situation has created various challenges when transferring wealth to family members, as Colombian rules on forced heirship are mandatory and apply to the estate of the individuals (both national and foreign) whose last residence was Colombia.

This transfer of wealth may provide various challenges from a tax and estate planning perspective when several jurisdictions are involved. Colombian courts usually apply local law in respect of real personal property located in Colombian territory.

Colombian rules on forced heirship are mandatory and apply to the estates of all individuals (national and foreign) whose last place of domicile was Colombia.

Colombian and foreign heirs have the same rights and are entitled to equal treatment in Colombian probate proceedings. The Colombian Civil Code forces the testator to assign certain compulsory portions, applicable to half of their estate, even against their will.

The compulsory portions are:

• maintenance provided by law;
• the marital portion; and
• the legitimate portion.

Maintenance Provided by Law

A compulsory portion is assigned for the subsistence of the beneficiary in a way that corresponds to their standard of living. Individuals entitled to maintenance include the deceased’s spouse, descendants per stirpes, ancestors or siblings. The amount of maintenance is assessed and declared by a judge.

Marital Portion

The marital portion corresponds to a part of the estate assigned by law to the surviving spouse or permanent partner lacking the necessary means for subsistence. Taking into account the existence of any legitimate descendants, the surviving spouse or partner will be included among the deceased’s heirs (children) and will receive a “marital portion” corresponding to a share of the estate equal to the portion to be inherited by each legitimate descendant.

Legitimate Portion

The legitimate portion corresponds to a part of the estate assigned by law to the legal heirs. Legal heirs are the deceased’s children or, in their absence, their descendants or ancestors. This portion is obtained by dividing half of the inheritance between all legitimate descendants and the surviving spouse or permanent partner.

The legal heirs converge to the succession and are excluded or represented according to the order and rules of the intestate succession.

Should there be any legitimate heirs

The testator may favour the particular descendant that they prefer, assigning part of the estate in the proportion desired.

Should there be no legitimate heirs

A testator may dispose of a certain part of their wealth, up to half of their estate. Should there be no descendants or beneficiaries entitled to inherit, either directly or by representation, the freely disposable portion will represent the entire estate. Otherwise, the Colombian state will inherit the entire estate, through the Colombian Family Welfare Institute.

The general rule for marital property is the community of property regime, which automatically comes into effect for all marriages and remains so until the community of property is dissolved either because of death, judicial decision or as result of free will. In this regime, the spouses commonly own community property. It is not similar to co-ownership because the spouses (joint owners) do not possess a share in the property but are owners of the community property.

Certain assets acquired by the spouses before marriage are considered as individual assets. However, any income, profits or increases in those assets’ value, derived from the individual property (including income generated by assets transferred to foundations and trusts), are part of the community property.

The right of a spouse to unilaterally dispose of assets is unlimited. A spouse is entitled to dispose of personal property and the assets of the community of property as they see fit. However, other dispositions will require, as a rule, the approval of the other spouse. This would be the case with real estate.

Colombian law respects both prenuptial and postnuptial agreements, although they must be granted by public deed. In the case of foreign agreements, the latter are recognised if they are duly notarised and apostilled.

The cost basis of property transferred during an individual’s lifetime is the registered value of the legal act including attributable costs. However, the cost basis of property transferred at death is the cost basis declared by the deceased as of 31 December of the previous year.

From a tax perspective, there are no mechanisms available to help the transfer of assets to younger generations, tax-free.

As a rule, inheritances or legacies are considered as capital gains, taxed at a 15% rate. However, certain structures may be used to obtain tax deferral or reduce the taxable base. This should be analysed on a case-by-case basis.

Colombia has no regulations concerning the succession of digital assets. However, general civil law principles apply: digital assets qualify as intangible property under Article 653 of the Civil Code, and the general rules on succession by cause of death extend to both tangible and intangible assets.

For tax purposes, the CTO’s Unified Ruling on Crypto‑Assets (2023) confirms that inherited crypto‑assets constitute capital gains under Articles 299 et seq of the CTC.

In practice, the main challenges are operational rather than legal. Access to digital assets such as email accounts, cryptocurrency or other tokenised assets depends on the availability of private keys or seed phrases, which may be irrecoverable if the decedent left no instructions. For assets held through foreign platforms, the provider’s terms of service and the law of its domicile will typically govern the access and transfer process, often requiring a grant of representation or court order.

Colombian law allows individuals to create trusts, private foundations, family companies, family partnerships or similar structures to hold, administer and regulate succession to private family wealth.

Civil Law

Colombian civil law does not provide rules on common law trusts or private foundations. However, there are rules on civil and commercial local trust agreements whereby a settlor transfers property or the administration of certain assets to a trustee in exchange for fiduciary rights.

Local trusts are commonly used in Colombia as instruments to administer properties or businesses with a specific purpose, or to grant guarantees or collateral, considering that trustees are professional regulated entities.

Common Law Trusts or Foreign Foundations

There are no civil or commercial regulations regarding the establishment of common law trusts or foreign foundations in Colombia. However, common law trusts are recognised in the CTC. The following requirements have to be observed.

Distributions made by a foreign trust or foundation

Colombian tax residents are subject to income tax based on their worldwide source income. Therefore, any distributions made by a foreign trust or foundation would be subject to tax in Colombia at a 15% rate as a capital gain. Life insurance indemnities are taxed as capital gains, but only on the amounts that exceed 3,250 Tax Units (approximately USD49,469).

Reporting of assets

Assets held by a trust/foundation (which is revocable and directed) are understood to be held directly by the unconditioned beneficiaries or by the settlor/founder and must be reported for all tax purposes as part of their own net worth.

If the underlying assets of an irrevocable and discretionary foundation cannot be attributed to the beneficiaries, the settlor must report the latter. But if the settlor cannot be identified or determined, the reporting obligation falls on the beneficiaries irrespective of whether they are conditioned or have control over the assets and income of the structure. This is the case, without any consideration of the trust/foundation’s irrevocable and discretionary character.

Reporting of income

If a trust/foundation were to be revocable and controlled by the settlor, then it would be considered as a controlled foreign corporation under Colombian law. Hence, net profits derived from passive income obtained by the trust/foundation must be recognised immediately in proportions equivalent to the participation in the trust/foundation’s capital or profits, and not upon receipt of profits, which means no tax deferral is applicable in this case.

Accordingly, Colombian tax residents must report the passive income realised by the trust/foundation in their income tax returns, considering the nature and characteristics of said income.

Civil Law

Colombian civil law does not provide rules on common law trusts or private foundations. However, there are rules on civil and commercial local trust agreements whereby a settlor transfers the property or administration of certain assets to a trustee in exchange for fiduciary rights.

Local trusts are commonly used in Colombia as instruments to administer properties or businesses with a specific purpose, or to grant guaranties or collaterals, considering that trustees are professional regulated entities.

Foreign Structures

There are no civil or commercial regulations regarding the establishment of foreign trusts and private foundations. However, foreign entities are recognised and respected by Colombian law and tax authorities and may be used as structures to administer private wealth and circumvent forced heirship rules in Colombia. Anti-abuse rules must be observed.

Local Trusts

In Colombia, only those companies duly authorised by the Colombian financial authority (Superintendencia Financiera de Colombia, or SFC) may offer local trust services and act as trustees. Such entities are subject to supervision and special regulations.

Colombian tax law treats local trusts as flow-through entities for tax purposes. Thus, a local trust must determine its profits annually and the beneficiaries have to include such profits in their own income tax returns for that same year and pay the relevant taxes.

Title to the assets that an individual contributes to the trust fund must pass to the trust (exceptions apply) or such assets will have to be declared by the individual as part of their equity and will thus be subject to net worth taxes. Additionally, if the individual receives fiduciary rights over the trust fund because of said contribution, they are required to report such rights for Colombian income tax purposes.

Foreign Structures

In the event beneficiaries are not subject to any condition necessary to benefit from the assets or income in a foreign trust or private interest foundation, they will be required to report their “participation” in the structure for all tax purposes.

If a beneficiary or the donor of a trust, foundation or similar entity also serves as a fiduciary in Colombia, the following rules must be observed.

Place of effective management

Entities incorporated in accordance with Colombian law, or having their main domicile in Colombia, or entities whose “place of effective management” (PEM) is located in Colombia are considered Colombian residents for tax purposes.

If the beneficiary or donor of a trust, foundation or similar entity serves as a fiduciary and is located in Colombian territory, a PEM would be triggered, as the entity would effectively be administered in Colombia.

CFC

If the trustee is located in Colombia and has control over the capital or economic rights over the trust, foundation or similar entity, then that individual will have to report in their income tax any passive income of the CFC, as if it was directly received by them.

In Colombia, the tax consequences of a beneficiary or donor also serving as fiduciary do not arise from the accumulation of roles per se, but from the degree of control, revocability or retained economic benefit over the underlying assets. Where the dual role evidences effective control or disposition, tax authority doctrine treats the assets and income as attributable to the Colombian tax resident holding that position.

Under rules introduced by Law 2155 of 2021, when beneficiaries are conditional or lack control over the trust or foundation assets, or if the ultimate beneficiary cannot be determined, the reporting obligation falls on the founder, settlor or original transferor – regardless of the structure’s discretionary or irrevocable character, and irrespective of the powers granted to protectors, advisers or other fiduciaries or third parties.

Additionally, where a Colombian tax resident or legal entity holds a fiduciary or equivalent position in a foreign trust, foundation or similar vehicle, the arrangement may trigger reporting obligations under the RUB, particularly regarding the identification of natural persons exercising ultimate effective control.

The most popular method for asset protection planning is the incorporation of a separate vehicle from the individual’s personal estate, providing asset protection from third parties or creditors.

Individuals may also place assets held in their own names into a local trust in order to designate them or their proceeds to a specific purpose or persons. The assets placed into a properly structured local trust form an estate separate from the assets of the settlor.

In structuring asset transfers, whether or not gratuitously made, attention should be paid to Colombia’s creditor protection laws. The Colombian Commercial and Civil Codes include specific rules on the enforcement of a revocation action (acción revocatoria) against the unjustified actions performed by debtors prior to the request of a treaty process, a mandatory liquidation process or a restructuring process.

Further asset protection can be obtained through an enforceable investment agreement with the following jurisdictions:

• bilateral investment treaties – China, Spain, Switzerland, Peru, India, Japan, France and the United Kingdom and Northern Ireland; and
• free trade agreements (investment chapters) – Canada, Chile, the European Free Trade Association (Switzerland, Liechtenstein, Iceland and Norway), Costa Rica, the EU, Mexico, the North Triangle (Guatemala, El Salvador and Honduras), the Pacific Alliance (Chile, Mexico and Peru), South Korea, the USA, Israel and the United Kingdom.

In Colombia, a testator only has an unlimited right of disposal over the half of their estate that corresponds to the freely disposable portion. The testator may decide the beneficiary of the assets comprising the remaining half of the estate, but must respect the compulsory portion that corresponds to their heirs.

Certain corporate arrangements (national or foreign), involving life insurance policies and the use of foreign or national legal entities/structures, may be implemented when forced heirship rules do not meet the wishes or needs of the testator or their family. These arrangements can be achieved by legally allowing assets to be passed down to intended beneficiaries, thereby successfully circumventing Colombian forced heirship rules.

Given these constraints, various lawful planning strategies may be implemented to facilitate the orderly transfer of wealth and control to the next generation while respecting forced heirship rules. Among the most commonly used structures and mechanisms are the following.

Wealth Transfer Structures

The most common vehicles include family holding companies – typically structured as a Sociedad por Acciones Simplificada (SAS) – which centralise assets and allow gradual share transfers through donations or sales during the founder’s lifetime. Other tools include donations with reservation of usufruct, lifetime partition of assets, life insurance policies (which pass outside the estate) and trusts or private foundations used to administer family assets with tailored distribution instructions.

Family Governance Arrangements

To reduce the risk of disputes and ensure continuity, Colombian families increasingly adopt governance frameworks alongside the corporate structure. These typically include:

• shareholders’ agreements governing transfer restrictions, pre-emptive rights, tag-along and drag-along clauses, and decision-making protocols;
• family protocols setting out shared values, succession criteria, roles and conflict-resolution mechanisms; and
• family councils or assemblies that formalise communication and oversight across generations.

While not binding in the same manner as corporate by-laws, family constitutions are recognised in practice and often incorporated by reference into shareholders’ agreements to strengthen their enforceability.

Partial Interest in an Entity Transferred During Life

If a partial interest is transferred during someone’s lifetime, it is presumed that the fair market value of the interest cannot be lower than its cost basis and its net asset value (valor intrínseco) increased by 30%.

If the partial interest being transferred is received as consequence of a gift, the value of the interest is its cost basis.

Partial Interest in an Entity Transferred After Death

However, if a partial interest is transferred at death, any amount received as consequence of an estate, legacy, donation or conjugal portion is considered as a capital gain subject to capital gains tax at a 15% rate. The value of the interest is its cost basis.

Colombia’s private wealth dispute landscape in 2026 is shaped by the convergence of enhanced tax enforcement capabilities, evolving reporting obligations for foreign structures, and an unprecedented period of fiscal instability driven by emergency legislation. While traditional succession disputes remain a constant, the disputes generating most advisory activity are those arising from the CTO’s increasingly sophisticated data-driven enforcement, the expanding scope of taxation under emergency decrees and the broader institutional uncertainty surrounding the constitutional limits of executive tax powers.

Tax Authority Enforcement and Information Cross-Referencing

The most significant structural driver of wealth-related disputes is the national tax and customs agency (Dirección de Impuestos y Aduanas Nacionales, or DIAN)’s deployment of automated cross-referencing tools fed by multiple data streams. Three mechanisms are particularly relevant to private clients.

First, the exogenous information (información exógena) reports which require banks, notaries, real estate registries, financial institutions and other third parties to report annually on transactions conducted with or on behalf of taxpayers. This information, which covers banking movements, property transfers, investment portfolios and, increasingly, digital economy transactions, feeds directly into the CTO’s cross-referencing engine and forms the evidentiary backbone of most enforcement proceedings. For private clients with complex asset structures, discrepancies between reported wealth and third-party data are typically the initial trigger for formal inquiries.

Second, the DIAN performs systematic cross-checks between a taxpayer’s income tax return, net worth tax filing, VAT declarations, withholding reports and banking records to identify inconsistencies. Where declared income appears insufficient to support reported asset growth, or where wealth tax filings are inconsistent with income declarations, the system generates automated flags that may lead to formal assessment proceedings. These cross-referencing exercises have become more precise following the implementation of real-time electronic invoicing validation and the integration of CRS data received from foreign jurisdictions.

Third, the CTO has adopted a campaign-based enforcement approach, directing targeted audit waves at specific taxpayer segments. Recent campaigns have focused on large-patrimony individuals, taxpayers reporting foreign assets, holders of interests in foreign fiduciary structures, and contributors to the tax normalisation programmes. In 2026, the DIAN initiated pre-filing audit campaigns verifying withholding certificates, self-withholding amounts and cost deductions before returns were even submitted.

These three mechanisms increasingly operate in tandem. The disputes that result typically take the form of formal assessment notices, penalty proceedings for under-reporting or omission, and administrative litigation before the DIAN and ultimately the Council of State.

Emergency Legislation and Constitutional Limits

Between December 2025 and March 2026, the government declared two successive states of economic emergency and used them to enact fiscal measures (including a reduced net worth tax threshold, a financial sector surcharge and a tax normalisation programme) that Congress had previously rejected through ordinary legislative channels. In January 2026, the Constitutional Court provisionally suspended the first emergency decree. The decree was subsequently declared unconstitutional, rendering all its implementing tax measures definitively void.

A second emergency, grounded in severe weather events affecting several Caribbean departments, remains partially in force and was used to issue a further wave of fiscal decrees extending the wealth tax to legal entities, permanent establishments and branches of foreign entities. For private clients, this situation creates an unusual category of disputes: taxpayers who complied with obligations under the first emergency now face unresolved refund claims, while those subject to the second emergency must comply with measures, the constitutional foundation of which remains under review. The disputes take the form of administrative refund proceedings, constitutional challenges to implementing decrees, and litigation over the scope of anti-fragmentation rules targeting corporate reorganisations carried out near the accrual date.

Political Transition

A new government will take office on 7 August 2026 with an ambitious fiscal adjustment programme and a commitment to restore the ordinary legislative process for tax policy. However, considerable uncertainty persists: the incoming administration lacks an automatic majority in Congress, and much of its fiscal agenda will require legislative approval in a politically fragmented environment. For private clients, the transition signals that a comprehensive tax reform is widely expected in the short term, but its content, timing and legislative vehicle remain unpredictable. Whether fiscal policy is institutionalised through Congress or continues the pattern of emergency legislation will materially affect the volume and nature of wealth-related disputes in coming years. Advisers should maintain planning flexibility and anticipate potential structural changes to wealth tax, reporting obligations and enforcement priorities.

Forms of Disputes

In practice, wealth disputes in Colombia take several concurrent forms:

• administrative proceedings before the DIAN (assessments, penalties and refund claims);
• judicial actions before the Council of State challenging emergency decrees or implementing regulations;
• constitutional challenges before the Constitutional Court; and
• increasingly, hybrid proceedings where a single taxpayer faces simultaneous enforcement action regarding unreported foreign structures, net worth tax assessments under emergency legislation and cross-referencing discrepancies flagged by the DIAN’s automated systems.

This convergence underscores the importance for private clients and their advisory teams of being able to manage multiple fronts simultaneously – tax compliance, administrative defence and constitutional litigation – within a unified planning strategy.

Compensation for aggrieved parties in wealth disputes or disputes involving trusts, foundations or similar entities implies civil liability (torts) in Colombia. Requesting compensation for damages is usually carried out before the Colombian courts, which determine the type of damage and amount of compensation.

Local Trusts

Local trusts are used in Colombia as instruments to manage properties or businesses with a specific purpose or to grant guaranties or collaterals, considering that trustees are professional regulated entities.

Only those companies duly authorised by the SFC may offer trust services and act as trustees. Such entities are subject to supervision and special regulations.

Colombian law sets forth a number of legal duties for trustees, which cannot be delegated to third parties, or waived. These include the following:

• the duty to carry out trustee activities in a diligent manner;
• the segregation of assets;
• the management of assets in a trust in accordance with the trust agreement;
• a trustee’s duty to act on behalf of, and for the benefit of, the beneficiaries;
• a trustee’s obligation to consult the SFC when in doubt regarding its duties or when it deems necessary, potentially acting against the instructions set forth in the trust agreement;
• a trustee’s duty to do its best to maximise the trust’s profitability;
• upon a trust’s termination, a trustee’s obligation to transfer the assets to the final beneficiary set forth in the agreement; and
• the requirement that a trustee should report accounts at least every six months.

Foreign Trusts

Regarding the use of corporate fiduciaries or other professional fiduciaries, there are no civil or commercial regulations establishing a higher standard of conduct or additional supervision or regulations.

Colombian law authorises individuals residing in Colombia and legal entities created under the laws of Colombia to invest and hold assets outside Colombian territory without the need to obtain further permits or authorisations. However, said tax residents and local entities must comply with all tax and foreign exchange reporting regulations.

In Colombia, the piercing of the corporate veil has been developed by case law and seeks to identify the individuals or legal persons who are beneficiaries of the legal entity. However, this procedure must be ordered by a judge and is not common on a day-to-day basis.

From a tax perspective, Article 869-2 of the CTC, allows the CTO to pierce the corporate veil of any entity used by its shareholders, partners, directors or administrators to commit tax abusive conduct under Article 869, mentioned in 1.7 Transparency and Increased Global Reporting.

The CTO may also obtain information regarding ultimate beneficial owners using the following mechanisms:

• Colombia’s AML and CFT framework, SARLAFT – financial entities are required to identify and report to the CTO the ultimate beneficial owners in accordance with SARLAFT regulations mentioned in 1.7 Transparency and Increased Global Reporting; and
• electronic tax information – Article 631 of the CTC requires Colombian affiliates or subsidiaries of national or foreign entities to identify and report the ultimate beneficial owners to the CTO electronically.

There are no specific laws that encourage fiduciaries to invest assets prudently. However, and as mentioned in 6.1 Prevalence of Corporate Fiduciaries, current regulations set forth a number of legal duties required of trustees in terms of investing and maintaining assets that cannot be delegated to third parties, or waived.

Generally, parties involved in a fiduciary agreement will determine the risks and limitations in the investment of assets. Colombian law does not require the diversification of assets or the application of modern portfolio theory. Certain exceptions may apply if government assets or pension funds are involved.

It is understood that a foreigner is a resident in Colombia when they are the holder of a residence visa.

An individual, whether Colombian or foreign, is a tax resident in Colombia if they remain in the country, continuously or discontinuously, for more than 183 calendar days in any period of 365 days. When a discontinuous residence of more than 183 days occurs between two taxable periods, the individual will be considered a resident as of the second taxable period.

Colombian nationals are considered as tax residents if:

• their spouse, life partner or dependent children are Colombian residents;
• 50% of the individual’s income is Colombian sourced;
• 50% of the individual’s assets are managed or deemed located in Colombia;
• the individual is unable to prove tax residency in another jurisdiction; and
• the individual is resident in a jurisdiction considered as a tax haven by the Colombian government.

Colombian individuals who meet the above-mentioned requirements will not be considered tax residents if:

• 50% or more of the individual’s income is sourced in the jurisdiction in which they are domiciled; or
• 50% or more of the individual’s assets are located in the jurisdiction in which they are domiciled.

Latin American or Caribbean citizens by birth may obtain Colombian citizenship if they are domiciled in Colombia for a term of one year. Spanish citizens may obtain Colombian citizenship if they are domiciled in Colombia for a term of two years.

Foreigners who are not Latin American, Caribbean or Spanish nationals may obtain Colombian citizenship provided that they are domiciled in Colombia for a term of five years counted from their visa’s date of issue. This term may be reduced to two years if the individual is married to a Colombian national or has Colombian children.

Foreign entities such as trusts and private foundations may be used to hold and manage assets for minor children or adults with disabilities and may be transferred once specific conditions are met.

Under Law 1996 of 2019, Colombia replaced judicial interdiction with a supported decision-making framework. A court proceeding is required only when no voluntary arrangement (support agreement or advance directive) has been put in place, or when additional safeguards are needed. In such cases, an interested party (such as a relative or spouse) may request the family judge to appoint one or more support persons to assist the individual in handling their affairs.

The court proceeding involves an assessment of the individual’s specific needs and determines the scope and duration of the support. Once appointed, the court retains supervisory authority: support arrangements are subject to periodic judicial review to ensure they remain appropriate and that the individual’s rights and autonomy are respected. The judge may modify or terminate the support if circumstances change.

Voluntary mechanisms, such as support agreements (formalised before a notary or conciliation centre) and advance directives (executed by public deed), do not require court intervention for their creation, although they may be subject to judicial review if challenged by third parties.

In practice, this has posed a difficulty in representing those individuals who were declared incapacitated under the previous legislation.

In Colombia, Law 1996 of 2019 provides a supported decision-making framework that enables individuals to plan in advance for potential loss of capacity. The principal voluntary mechanisms are:

• Support agreements – these allow designation of one or more persons to assist in specific legal acts, formalised before a notary or conciliation centre (Decree 1429 of 2020).
• Advance directives – these allow the individual to set out their wishes and preferences regarding future legal acts, executed by public deed or conciliation agreement.
• Powers of attorney – these may be used for patrimonial, corporate or contractual matters, but must be co-ordinated with the support regime, as representation requires an express mandate for specific acts.

In practice, these instruments are used to anticipate who may assist or represent the individual in legal, patrimonial, corporate, banking or tax decisions, preserving the individual’s autonomy and reducing the risk of disputes with third parties or family members.

In response to demographic trends and structural coverage gaps, Colombia enacted a major pension reform under Law 2381 of 2024, scheduled to take effect on 1 July 2025. This reform, one of the few major legislative initiatives successfully passed by the current administration, emerged from a process of public consultation led by the Comisión de Reforma de Protección a la Vejez, and seeks to promote equity and long-term sustainability in the national pension system.

The New System of Social Protection for Old Age

The law introduces a four-pillar model under the new System of Social Protection for Old Age, aiming to expand coverage, address gender disparities, and provide more flexible retirement pathways.

1. Solidarity pillar

This component is designed to support elderly individuals living in poverty or vulnerability who are not eligible for a pension. It grants a Solidarity Basic Income, a non-pension benefit adjusted annually based on Colombia’s CPI. Eligibility depends on age, nationality, residency, and socio-economic status, with special provisions for individuals with disabilities. While modest in value, this transfer plays a vital role in preventing extreme poverty among older adults.

2. Semi-contributory pillar

Targeting individuals who contributed to the pension system but did not meet the minimum requirements, this pillar grants a Lifelong Annuity, financed partly by state subsidies. While not inheritable, the annuity is meant to provide a stable post-retirement income. Women receive a higher state contribution (30% v 20% for men), reflecting policy efforts to address gender-based inequities.

3. Contributory pillar

This is the core of the reform and applies to all formal workers. It adopts a hybrid model: contributions on earnings up to 2.3 monthly minimum wages (approximately USD1,183 for 2026) go to “Colpensiones”, the public fund, while any excess is managed by private pension funds. The two components are integrated to form a unified pension. This design shifts part of the pension flow from private to public hands and changes the long-term dynamics of pension fund management.

4. Voluntary savings pillar

This final pillar remains unchanged and allows individuals to make additional contributions to supplement their retirement savings.

Transition Measures

To safeguard acquired rights, the law includes a transition regime: individuals close to retirement – that is, women with 750+ weeks and men with 900+ weeks of contributions by 1 July 2025, will remain under the previous legal framework. Additional provisions for women include a 50-week credit per child (up to three) and a gradual reduction of the contribution requirement to 1,000 weeks by 2036.

Legal Challenges and Institutional Uncertainty

Despite its scheduled implementation, the law’s future remains uncertain. Several constitutional claims have been filed, primarily questioning the legislative process that led to its approval.

In June 2025, the Constitutional Court identified procedural flaws in the legislative process, specifically in the final voting session, and suspended the law’s implementation, returning it to Congress for reconsideration. The House of Representatives re-approved the pension reform on 28 June 2025 – however, the suspension remains in effect until the Constitutional Court issues its final ruling on the law’s constitutionality (at the time of publication of this guide, the court had not yet ruled on this matter).

Implementation measures tied to pension transfers have also been challenged under litigation: in April 2026, the Council of State provisionally suspended Decree 415 of 2026, which ordered private pension funds to transfer certain assets to Colpensiones, after finding that the forced transfer of resources for individuals who have not yet consolidated their pension entitlement exceeded the government’s regulatory authority and contradicted the law’s own transitional framework (Article 76, Law 2381 of 2024; Decree 1225 of 2024).

As a result, most of Law 2381 of 2024 remains suspended, with narrow exceptions continuing to apply. Full implementation remains contingent on the Constitutional Court’s final decision and the resolution of related judicial proceedings.

There is no legal distinction for natural or adopted children, or those born out of wedlock, in terms of estate and succession planning. In accordance with Law 29 of 1982, natural and adopted children have the same rights and obligations. This would also be the case for posthumously conceived children.

A progressive recognition of legal rights for same-sex couples has taken place through case law. Currently, same-sex couples:

• can constitute de facto marital unions;
• may formalise their union before a judge or notary public; and
• have the same pension, social security, property and inheritance, and adoption rights as heterosexual couples.

The most recent legal development took place with Ruling SU-214/2016, whereby the Constitutional Court accepted same-sex marriages.

In Colombia, unmarried couples may acquire legal recognition if they constitute a de facto marital union, defined under Law 54 of 1990 as a permanent and singular community of life between two adults not married to each other. Same-sex couples have been included since 2007 through Constitutional Court ruling C-075 of 2007.

Succession

A patrimonial partnership is presumed after at least two years of cohabitation or may be declared by public deed, conciliation agreement or judicial decision (Law 979 of 2005). For succession purposes, permanent partners have been progressively equated with spouses through Constitutional Court decisions (C-283 of 2011, C-238 of 2012 and C-456 of 2020), extending intestate succession rights and other civil law references to “spouse” to permanent partners of both different-sex and same-sex couples, on equal terms.

Tax Implications

From a tax perspective, permanent partners receive substantially the same treatment as married spouses. They qualify as dependants for income tax purposes, benefit from equivalent occasional-gains thresholds on inherited assets, and may be designated as beneficiaries under insurance and pension instruments with no adverse tax differentiation.

Reason to Formalise the Union

Compared with marriage, a de facto marital union may produce equivalent patrimonial, succession and tax effects, but generally requires formal declaration to be enforceable against third parties. Mere cohabitation without the elements of a permanent and singular community of life does not automatically give rise to a patrimonial partnership or succession rights. For this reason, planning commonly involves formalising the union, defining the patrimonial regime, preparing wills and reviewing beneficiaries across financial assets, insurance policies and wealth planning structures.

The CTC establishes that non-profit corporations, foundations and associations are subject to a special tax regime with respect to income tax (20% rate) and complementary taxes, provided that they comply with the following conditions:

• they are incorporated under Colombian law;
• their main purpose and resources are directed towards health; primary education, formal education, college education or sports education; culture; scientific or technological advances; ecological research, environmental protection or social development programmes;
• their activities are of general interest and may be freely accessed by the community;
• their capital contribution or surpluses cannot be distributed; and
• their surpluses are reinvested, in their entirety, in the activity of the entity’s corporate purpose and such corporate purpose corresponds to the activities mentioned in the preceding clause.

Further to this, there is an annual registration requirement. The entity must file a yearly online request to continue benefiting from the special tax regimen. Otherwise, it will be subject to the general corporate income tax rate (35% from FY 2023 onwards).

Of the gifts made to entities operating under the special tax regime, 25% can be credited for income tax purposes. However, the above-mentioned requisites must be met.

Entities approved by the CTO as eligible for the special tax regime are subject to income tax at a 20% rate. However, any income surplus is considered exempt, if the funds are destined directly or indirectly for programmes that develop the entity’s social purpose and meritorious activities. Any excess benefits or surpluses that are not reinvested in programmes that develop the entity’s social purpose are deemed as taxable for the next fiscal year.