COLOMBIA Law and Practice Contributed by: Rodrigo Castillo Cottin, Ana María López and Alejandra Becerra, Rimon, P.C.
These three mechanisms increasingly operate in tan - dem. 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 gov - ernment declared two successive states of econom - ic emergency and used them to enact fiscal meas - ures (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 implement - ing 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, con - stitutional 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 per - sists: 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 chal - lenging 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 pri - vate clients and their advisory teams of being able to manage multiple fronts simultaneously – tax compli - ance, administrative defence and constitutional litiga - Compensation for aggrieved parties in wealth dis - putes or disputes involving trusts, foundations or similar entities implies civil liability (torts) in Colombia. Requesting compensation for damages is usually car - ried out before the Colombian courts, which determine the type of damage and amount of compensation. tion – within a unified planning strategy. 5.2 Mechanism for Compensation
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