The Council of State has overturned the decision that had provisionally suspended Sections 2 through 8 of Decree 572 of 2025, which amended the withholding and self-withholding tax rates and thresholds applicable to income tax. As a result, these provisions will once again produce legal effects until a final decision on their legality is issued.
Background. Decree 572 of 2025 amended the self-withholding rates applicable to income tax and increased certain minimum withholding thresholds. The decree entered into force on June 1, 2025, and was challenged on the grounds that it allegedly violated the principles of legality, equity, progressivity, and taxpayers’ ability to pay.
On May 7, 2026, the Fourth Section of the Council of State ordered the provisional suspension of Articles 2 through 8 of the Decree. Through its recently issued decision, the Court revoked that interim measure and reinstated the effectiveness of the challenged provisions pending a final judgment.
Effects. The revocation of the suspension will become effective on the first calendar day of the month following the date on which the decision becomes final and binding. According to the Council of State, this period is intended to provide withholding agents with a reasonable timeframe to make the necessary adjustments to their systems for calculating, applying, remitting, and reporting the relevant withholding and self-withholding obligations.
Grounds for Revoking the Suspension. The Council of State concluded that there are insufficient grounds to maintain the provisional suspension. In particular, it noted that Decree 572 of 2025 includes supporting background information and justifications that, at least on a preliminary basis, provide technical, economic, and legal support for the amendments introduced.
The Court further held that the analysis set out in the May 7, 2026 order required a level of technical substantiation and quantification that exceeds the standard established under Article 231 of the Colombian Code of Administrative Procedure and Administrative Litigation (CPACA) for the granting of interim measures, as it entails a complex technical assessment more appropriately reserved for the final judgment on the merits.
Practical Considerations. It is essential to determine the exact date from which the increased withholding and self-withholding rates will once again apply, considering that the effects of the decision have been deferred and that these mechanisms operate in connection with obligations that arise on a periodic basis.
In any event, it is important to note that this decision does not resolve the merits of the dispute and does not constitute a final determination regarding the legality of Decree 572 of 2025.
Brigard Urrutia remains available to assist its clients in assessing the effects of this decision and evaluating its tax and operational implications.