Update on tax reliefs in withholding at source on employment income
Accordingly, it is possible to apply the tax reliefs applicable to each individual case in order to reduce the taxable base by up to an additional 15% and reach the maximum 40% deduction, without exceeding an annual cap of 1.340 UVT (equivalent to COP 70.181.160 for 2026).
Types of tax reliefs | |
1. Economic dependents of the Employee
· Children under 18 years of age, or under 23 if they are students and the worker covers their educational expenses, or of any age who are in a state of dependency due to physical or psychological factors certified by the Forensic Medical Institute. · The worker’s spouse or permanent partner, parents, or siblings who are in a situation of dependency either due to lack of income or income in 2025 below 260 UVT ($12.947.740) as certified by a certified public accountant, or who are in a situation of dependency resulting from physical or psychological factors certified by the Forensic Medicine Institute. | What documents do I need to submit?
· Supporting documents of the applicable dependents (children, spouse, parents), and the corresponding dependency certificate (issued by the Institute of Legal Medicine or a public accountant). |
2. Payments for private health insurance
· Payments made by the employee, as the policyholder, to prepaid health care plans that cover the employee, their spouse, and up to two children.
· The payments eligible for tax relief are the monthly premium for the prepaid health care plan or health insurance policy, and the medical care vouchers included in the payment statement. Payments made by the employer DO NOT qualify for tax relief and will be adjusted by the payroll team.
| What documents do I need to submit?
· Payment certificate issued by the prepaid medical insurance provider or health insurer for payments made during 2025. Maximum benefit: 16 UVT per month (COP 837.984). |
3. Interest payments on home loans
· An employee who has taken out a home loan may reduce their taxable income by reporting the amount paid in interest.
| What documents do I need to submit?
· Bank certificate detailing the interest paid on housing acquisition loans (mortgage loan or housing leasing). Special considerations apply to jointly held loans. Maximum benefit: 100 UVT per month (COP 5.237.400).
|
4. Voluntary contributions to pensions and savings accounts
· Voluntary pension contributions and savings in AFC accounts (Savings and Construction Promotion) are exempt from withholding tax and count toward the 15% additional deductions.
| What documents do I need to submit?
· AFC account certificate or AVP voluntary contribution enrollment certificate from a pension fund administrator; provide the amount to be deducted monthly from payroll. |
Tax relief can be claimed at any time of the year; however, it is important to note that it will only apply from the date it is claimed through March 31 of the following year. Tax relief claimed in 2025 will not take effect until April 1, 2026.
