Tax incentives and amendments to the Bogota Tax Administration

The draft agreement includes benefits for certain economic sectors, tax relief measures and structural adjustments to the district tax regime that could have relevant effects for investors, companies and owners of real estate located in Bogota D.C.

1.    Incentives for new investments and job creation

One of the main objectives of the draft agreement is to establish tax benefits for companies that develop new productive investments in Bogota.

The proposed measures include:

• Progressive ITT exemptions for taxpayers carrying out investment projects in productive fixed assets.
• Benefits aimed at industrial, technology, education, healthcare, telecommunications, specialized services and innovation sectors.
• Special schemes for projects located in the Fontibon and Engativa Airport Districts.
• Benefits subject to compliance with requirements related to minimum investment amounts and formal job creation.

The duration and percentage of these benefits would depend on the type of project, the value of the investment made and the specific conditions set forth for each incentive.

2.    Tax benefits for the real estate and construction sector

The draft agreement also proposes incentive mechanisms for urban development and construction activity.

The most relevant measures include:

• Urban renewal: Property tax exemptions are expected for owners who contribute real estate assets to urban renewal projects or to Urban Renewal Projects for Sustainable Mobility (PRUMS).
• Specialized leasing: A property tax exemption is proposed for residential projects intended for specialized leasing schemes that meet certain size, ownership and sustainability conditions.
• Airport Districts: Strategic projects developed within the urban interventions in Fontibon and Engativa could access benefits regarding:
• Industry and Trade Tax.
• Unified Property Tax.
• Urban Delineation Tax.

3.    Tax relief for outstanding obligations

The draft agreement includes a temporary tax relief scheme for taxpayers with outstanding district tax obligations.

The initiative proposes allowing a reduction of:

• 50% of accrued interest.
• 50% of applicable penalties.

The foregoing would be subject to payment of the outstanding principal amount and the remaining portion of interest and penalties within the term provided in the draft agreement.

This measure seeks to encourage the normalization of outstanding tax obligations before the Bogota Tax Administration. 

4.    Creation of a public lighting surcharge

The draft agreement proposes adopting a surcharge associated with property tax, specifically earmarked for the public lighting service.

The proposal defines:

• Taxpayers.
• Taxable event.
• Taxable base.
• Differentiated rates according to the property category.
• Maximum payment caps.
• Possibility to opt into the Alternative Installment Payment System (SPAC).

5.    Proposed changes to property tax

The initiative proposes amendments to the unified property tax rates applicable in Bogota D.C., including adjustments for:

• Residential properties.
• Commercial properties.
•  Industrial properties.
• Financial properties.
• Institutional properties.
• Rural properties.
• The draft agreement also introduces new rules for updating brackets and mechanisms associated with the determination of the tax for future taxable years. 

6.    Amendments to ITT and the SIMPLE Tax Regime

Regarding ITT, the draft agreement proposes relevant adjustments, including:

• New rates for industrial, commercial, financial and service activities.
• Changes to the filing periodicity of Industry and Trade Tax returns.
• Definition of a common regime and a preferential regime.
• New rules for taxpayers under the SIMPLE Tax Regime carrying out activities in Bogota.

Likewise, amendments are proposed in connection with:

• ITT withholding taxes.
• Firefighter surcharge.
• Benefits for new companies formalized in the Capital District.

7.    Procedural and audit adjustments

The draft agreement introduces significant changes regarding district tax administration, including:

• Regulation of electronic notification.
• New provisions regarding notification addresses.
• Adjustments to the penalty regime.
• Amendments to penalties for failure to provide information.
• Application of the principles of proportionality, graduality and favorability.
• These measures seek to strengthen tax management and audit mechanisms by the District Department of Finance.

8.    Elimination of certain district taxes

The proposal provides for the repeal, as of January 1, 2027, of:

• The outdoor visual advertising tax.
• The unified tax for the poor fund, games of chance and entertainment events.

Do you have investment projects in Bogota or would you like to assess the impact of these measures on your organization? Our Tax & Legal team has the experience to assist you in identifying opportunities, assessing risks and analyzing the tax incentives proposed in Draft Agreement 724 of 2026.