Agreement 1084 of 2026 – Bogotá Tax Reform

The regulation combines incentives for new investments, business reinvestments, strategic initiatives within the Airport District and certain real estate projects, together with new collection measures and amendments to the administration of district taxes.

Executive summary

Incentives for investment and business development

ICA exemption for attraction of large investments.

The Agreement establishes a progressive Industry and Commerce Tax (ICA) exemption for taxpayers that were not subject to ICA in Bogota before the Agreement entered into force, or that registered the cessation of activities in the Municipal Tax ID (RIT) at least one year beforehand, provided they carry out one of the expressly listed activities and invest in productive fixed assets.

The investment project must be submitted no later than June 30, 2031, and its implementation may not exceed five years from notice of the decision approving it. The exemption may be claimed beginning in the taxable year following completion of the investment.

The minimum number of jobs must be maintained throughout the benefit period. If the number decreases, the taxpayer will have two months to restore the required headcount; otherwise, the exemption for the relevant year will be forfeited.

ICA tax credit for taxpayers making new investments.

Companies registered in the RIT that invest in productive fixed assets and report growth in ICA liability may claim a tax credit equal to a percentage of the difference between the tax payable for the qualifying period and the tax payable for the same period of the preceding year. The required growth is equal, for the first year, to the annual change in the Consumer Price Index (CPI) plus three percentage points and, for the second year, to the annual change in the CPI.

The project must be submitted before December 31, 2027; the competent District authority must decide on its approval no later than June 30, 2028. The investment must be completed within a maximum period of three years, and the tax credit will apply during the two years following its completion.

Fontibon and Engativa airport district

The regulation adopts a special regime for investments made within the strategic initiatives of the Fontibon Airport District and the Engativa Airport District. The regime includes benefits related to ICA, property tax and urban delineation tax, subject to compliance with requirements concerning activity, investment, employment, location and sustainability. (It is important to verify the qualifying activities in order to be eligible for the progressive exemption).

As a key eligibility requirement, the applicant must not have been an ICA taxpayer in Bogota, or must have registered the cessation of activities in the RIT at least one year before the Agreement entered into force.

Projects falling within Section 5 of the Agreement must be submitted no later than June 30, 2035 and completed within a maximum period of five years. As a special condition, the direct jobs must be maintained throughout the benefit period.

Related real estate tax benefits.

• A 100% property tax exemption applies during years 1 to 5, followed by exemptions of 80%, 60%, 40%, 20% and 10% through year 10.
• A 100% urban delineation tax exemption applies to works or construction required to carry out the approved investment project.
• The project must hold one of the sustainable construction certifications recognized under the Agreement.

Urban renewal, rental housing and heritage

Urban renewal and PRUMS.

Owners contributing real property to housing projects located in urban renewal areas or to Urban Renewal Projects for Sustainable Mobility (PRUMS) may qualify for a property tax exemption on the real estate units received as consideration. Contributions must be made from the date the Agreement enters into force through December 31, 2031.

Specialized rental projects.

Residential projects intended for specialized rental may claim a property tax exemption for ten years, subject to conditions including a new-construction building permit issued after the Agreement, a minimum of 50 units, a single owner, actual use for rental purposes, a duly registered operator and sustainable construction certification.

Projects that use the qualifying properties for short-term stays or vacation rentals will not be eligible for this exemption. In addition, projects may not conduct short-term or vacation rental activities pursuant to Law 2068 of 2020.

Urban delineation tax in PEMP areas and sectors of cultural interest.

For the five years following publication of the Agreement, certain renovation, expansion, modification or structural reinforcement projects located within the Historic Center PEMP, the Teusaquillo PEMP and certain heritage properties within the area of influence of the foundational squares of Usaquen, Bosa, Suba, Usme, Engativa and Fontibon will qualify for a 100% urban delineation tax exemption.

Relief for district tax and non-tax liabilities

Persons with outstanding District tax and non-tax liabilities may obtain a 60% reduction of accrued interest and penalties. To qualify for the relief, they must pay, no later than December 21, 2026, 100% of the principal and 40% of the interest and penalties accrued as of the payment date.

For penalties imposed for failure to submit information, the liable party may obtain a 60% reduction and must pay 40% of the assessed penalty.

• The relief does not apply to tax liabilities of ICA withholding agents.
• The benefit does not apply to administrative acts challenged through an action of reinstatement of rightsbefore the administrative courts.
• The full payment must be made in a single payment no later than December 21, 2026.

Property tax surcharge for public street lighting

The Agreement adopts in Bogota a property tax surcharge to fund the public street lighting service, effective January 1, 2027. The taxable base will be the same as that applicable to the property tax for the relevant tax year.

The annual surcharge may not exceed 600 TVU for residential properties and 1,200 TVU for other properties. In addition, taxpayers excluded from property tax and those qualifying for a 100% exemption will not be required to file or pay the surcharge while such treatment remains in effect.

Property tax: main approved rates

The Agreement amends the property tax rate structure. For residential properties subject to the general scale, progressive rates ranging from 5.5 to 13.9 are adopted, depending on the taxable base.

Industry and commerce tax

Article 21 of the Agreement establishes rates ranging from 4% and 21% for the various activities, which should be analyzed individually to determine the applicable impact.

The rates would apply as of January 1, 2027 for annual filers and from the two-month period following approval of the Agreement for bimonthly filers.

Fire department surcharge.

Taxpayers subject to the surcharge would be determined based on an annual net income threshold of 38,000 TVU. Bimonthly filers would make advance payments equal to 1% of the ICA assessed.

Procedural and penalty provisions

• With respect to ICA filing frequency, beginning in taxable year 2027, taxpayers whose tax payable for the preceding year exceeds 391 TVU must file on a bimonthly basis (Ordinary Regime). Under the Preferential Regime, taxpayers with tax payable of up to 391 TVU will file annually and, if their net income is below 1,933 TVU, they will not be required to file a return and their tax liability will equal the withholdings applied to them.
• For penalties related to failure to submit information, the applicable rates are reduced from 5%, 4% and 3% to 1%, 0.7% and 0.5%, respectively.
• As a relevant provision of the Agreement, the Bogota District Department of Finance may serve notices at the email address registered by taxpayers in the RIT.
• A reduction applies to penalties self-assessed by the taxpayer (70%) and to penalties proposed or assessed by the tax authority (50%).
• As of January 1, 2027, the outdoor visual advertising tax and the unified tax for the Fund for the Poor, Games of Chance and Public Entertainment are abolished.