Colombia Tax Reform 2026: What It Means for Expats

The short version: the Colombia tax reform 2026 bill has not passed and may never. The outgoing government filed it in Congress on July 20, 2026 — its fourth attempt at a reforma tributaria — seeking to raise COP 21.9 trillion (about US$6.8 billion, roughly 1% of GDP) for the 2027 budget (Presidencia de la República). Two days later, the incoming government publicly rejected it, before a single debate had happened. If you’re a foreigner who crosses Colombia’s 183-day tax-residency threshold, that leaves real uncertainty about what you’ll owe next year.

Last updated July 23, 2026 — this is a fast-moving legislative story, and the details below may change before the bill’s four required debates.

What the Colombia tax reform 2026 bill actually proposes

Finance Minister Germán Ávila presented the project alongside Pacto Histórico lawmakers on July 20. Its main provisions, per El Colombiano and Infobae:

• Top personal income tax rate up to 41%. The maximum marginal rate on individuals would rise from 39% to 41%, but only above roughly 31,000 UVT in annual taxable income — at the 2026 UVT of COP 52,374 (DIAN), that’s about COP 1.62 billion, or roughly US$506,000 at the Superintendencia Financiera’s certified July 23, 2026 exchange rate of COP 3,206.86 per dollar (Superintendencia Financiera de Colombia, TRM). That’s well above what most salaried expats or remote workers report as Colombian taxable income.
• Deductions stripped from personal income tax, widening the effective tax base even for filers who never approach the 41% bracket.
• A broader wealth tax. The bill lowers the impuesto al patrimonio threshold from 72,000 UVT to about 40,000 UVT — roughly COP 2.1 billion (about US$653,000) in net worth — and adds marginal rates up to 5%, up from 1.5% today. That would roughly triple the number of people who owe it, from about 32,000 filers to an estimated 105,000 (La República). This is the provision that matters most for high-net-worth foreign tax residents: like income tax, Colombia’s wealth tax is assessed on a resident’s worldwide net worth once you cross the residency threshold, not just what you hold here (Estatuto Tributario, Art. 292-3; Art. 295-3).
• 19% VAT restored on concerts, sporting events, hybrid vehicles, and gambling, plus higher excise taxes on cigarettes and vapes (Infobae).
• Occasional gains from lotteries, raffles, and bets rise from 20% to 30%, and separately, the withholding rate on dividends paid to non-residents and to foreign companies without a principal domicile in Colombia also rises from 20% to 30% (Infobae; Infobae).

Like any bill, it needs four debates — two per chamber — before becoming law, and Colombia’s three prior Petro-era tax reforms all had troubled paths through Congress; a related 2026 budget financing law was archived outright by the Senate’s Fourth Commission (El Colombiano).

Why it may never pass

President-elect Abelardo De la Espriella, who takes office August 7, 2026, rejected the bill within 48 hours of its filing. His transition team called it an attempt “to transfer to Colombians the cost of four years of fiscal disorder” and said the incoming administration “will not support a new tax reform,” pointing instead to fiscal discipline and spending efficiency (La República; Infobae).

That rejection doesn’t kill the bill outright — Congress, not the president, decides whether it advances — but it strips the incoming executive’s support from a project that now needs a fresh governing coalition to survive four debates in a legislature seated only days earlier (El Colombiano).

What this means if you’re a tax resident here

None of this changes your 2026 tax bill. The residency rule hasn’t moved: under Article 10 of Colombia’s Estatuto Tributario, you’re a tax resident if you spend more than 183 days in Colombia within any 365-day period, counting both arrival and departure days, and the days don’t need to be consecutive (Estatuto Tributario, Art. 10). Cross that line and Colombia taxes your worldwide income on the progressive scale set out in Article 241, currently topping out at 39% — versus a flat 35% for non-residents under Article 247, who are only taxed on Colombian-source income (Estatuto Tributario, Art. 241; Art. 247). For the visa and paperwork side of crossing that threshold in the first place, see our guide to moving to Medellín.

If some version of this bill survives the new Congress, what changes is the math above that threshold: a higher top rate for very high earners, fewer deductions for everyone else who already files, and — for anyone with substantial worldwide assets — a wealth tax that reaches much further down than it does today.

For how currency swings alone have already reshaped expat budgets this year, see our look at why the cost of living has increased for expats in Medellín. For how the outgoing government’s other fiscal moves are already landing, see our coverage of the labor reform driving up Medellín restaurant prices.

A worked example

Take a remote worker reporting, say, COP 200 million (about US$62,000) in Colombian taxable income for the year — comfortably inside typical digital-nomad and remote-employee territory. That’s nowhere near the roughly COP 1.62 billion (~US$506,000) threshold where the new 41% rate would apply, so the marginal-rate change wouldn’t touch them. What could still land on their return is the stripped deductions, which apply well below that threshold — meaning a filer far under the new top bracket could still see a modestly higher bill even though their rate never moves.

Now take someone holding, say, a paid-off Poblado apartment plus savings worth COP 2.5 billion (~US$780,000) in worldwide net worth. Today they fall under the wealth-tax threshold and owe nothing. Under this bill’s roughly COP 2.1 billion (~US$653,000) threshold, they’d newly owe it. For most remote workers and salaried expats, the deduction changes are the more likely exposure; for higher-net-worth residents, the wealth tax — not the marginal-rate headline — is the provision worth tracking.

What to watch after August 7

A new Congress is seated in the days before De la Espriella’s inauguration, and whether any piece of this bill survives depends on whether the outgoing Pacto Histórico bench can build a fresh coalition without the incoming executive’s backing — something none of the three prior Petro-era reforms managed on their own. Watch for:

• Whether the bill is formally withdrawn or simply left to die in committee before its four debates begin.
• Whether the new government instead files a narrower proposal built around spending cuts rather than new revenue.
• Whether the wealth-tax and dividend-withholding provisions specifically resurface in whatever comes next — those are the two with the most direct exposure for foreign residents.

Whatever happens in Congress, the residency paperwork itself keeps changing on its own schedule — Migración Colombia raised its cédula and visa-extension fees in 2024 independent of any tax bill, and it’s worth checking current rates before you budget for either.

The bottom line

This is a live legislative fight, not settled law — treat every figure here as a snapshot from July 23, 2026. If you’re close to or over the 183-day threshold this year, keep your travel and residency records precise, and check with a Colombian accountant before assuming any of the current 39% top rate, this bill’s 41%, or its lower wealth-tax threshold is what you’ll owe for 2027.

This article is reporting on a pending bill, not tax or legal advice. Colombian tax residency and liability depend on your individual facts — confirm your specific situation with a licensed Colombian accountant or tax attorney.

Frequently asked questions

What is Colombia’s 183-day tax residency rule?

You become a Colombian tax resident if you spend more than 183 days in the country during any 365-day period, consecutive or not; both arrival and departure days count (Estatuto Tributario, Art. 10).

Did Colombia’s tax reform pass?

No. The bill was filed on July 20, 2026, and still needs four debates in Congress. The incoming De la Espriella government publicly rejected it on July 22, before any debate took place, though Congress ultimately decides its fate (La República).

What’s Colombia’s current top income tax rate for residents?

As of July 2026, resident individuals are taxed on worldwide income at progressive rates up to 39%; non-residents pay a flat 35% on Colombian-source income only (Estatuto Tributario, Art. 241; Art. 247). The rejected bill would raise the top resident rate to 41%, but only above about COP 1.62 billion in annual taxable income.

Does the Colombia tax reform change the wealth tax?

Yes — it expands an existing tax rather than creating a new one. Colombia’s impuesto al patrimonio already applies today; the bill lowers its threshold from 72,000 UVT to about 40,000 UVT — roughly COP 2.1 billion (about US$653,000) in net worth — and adds marginal rates up to 5%, up from 1.5% today (La República). Like income tax, it applies to a tax resident’s worldwide net worth, not just assets held in Colombia (Estatuto Tributario, Art. 292-3; Art. 295-3).

Do I pay Colombian tax on my US income?

If you’re a Colombian tax resident — meaning you’ve spent more than 183 days in the country in any 365-day period — yes: Colombia taxes your worldwide income, including US-sourced income, on the same progressive scale as any other resident, currently topping out at 39% (Estatuto Tributario, Art. 241). Non-residents are taxed only on Colombian-source income, at a flat 35% (Art. 247). Whether tax paid to the US on the same income offsets what you owe in Colombia depends on your specific situation — check with a Colombian accountant.