Suspension of Decree 572 of 2025 – Amendment to Withholding Tax Rates

The judicial decision analyzed whether the provisional suspension of the Decree was appropriate, based on the requirements set forth in Sections 229, 230, and 231 of the Code of Administrative Procedure and Administrative Litigation, concluding that a partial suspension was warranted.

In said order, the following determinations were adopted, mainly:

Provisional suspension of Sections 2 to 8 of Decree 572 of 2025

The Council of State concluded, in a preliminary legality review, that the provisions that amended the withholding and self-withholding rates and bases do not include sufficient and adequate reasoning, nor are they duly supported by technical, economic, or legal evidence.

In particular, the Chamber noted that:

• Although the Decree includes a formal justification, it is limited to general statements about economic performance and the existence of gaps between the tax due and the withholdings, without quantifiable or verifiable support.
• The simulations, economic studies, or technical analyses that, according to the Government, supported the increase in rates and the reduction of thresholds were neither provided nor adequately explained.
• The affected economic activities were not precisely identified, nor were the criteria used for their grouping or to justify the rate adjustments.
• The Decree’s considerations do not make it possible to establish how the measures adopted align with the parameters of Section 365 of the Tax Statute, particularly regarding the purpose of facilitating, expediting, and ensuring tax collection.

Based on the foregoing, the chamber determined that, at this preliminary stage, there is an infringement of higher-ranking rules due to insufficient reasoning, which justifies the provisional suspension of Sections 2 to 8 of the Decree.

Effects of the decision

As a consequence of the partial provisional suspension:

• Sections 2 to 8 of Decree 572 of 2025 cease to have effect since May 8, 2026.
• The prior rules governing withholding tax bases are reinstated. Accordingly, as of May 8, the bases in force prior to Decree 572 of 2025 will apply again, for example: general purchases (27 UVT, instead of 10 UVT), services (4 UVT, instead of 2 UVT), and other taxable income, among others.
• The same will occur with the self-withholding rates.
• Section 1 of the Decree remains in force.

This measure is provisional and does not imply a final ruling on the legality of the Decree, which will be determined in the judgment deciding the nullity action. For further information, the press release issued by DIAN regarding the suspension of the Decree is attached: https://www.dian.gov.co/Prensa/Paginas/NG-Comunicado-de-Prensa-070-2026.aspx