On February 24, 2026, under the State of Economic, Social and Ecological Emergency declared by Legislative Decree 150 of 2026, the National Government issued Legislative Decree 173. The emergency had been declared following hydrometeorological events affecting municipalities in Córdoba, Antioquia, La Guajira, Sucre, Bolívar, Cesar, Magdalena and Chocó. The tax measure extended the wealth tax for fiscal year 2026 to legal entities and de facto companies filing income tax returns. Legislative Decree 240 of 2026 later added permanent establishments and branches of foreign entities.
Five months later, the ordinary deadlines have already passed and the tax remains under review by the Constitutional Court. Its relevance is not limited to the amount paid: the proceeding will define how far the Government may go in imposing extraordinary tax burdens, differentiated by economic sector, during a territorially limited state of emergency.
What Decree 173 established
For legal entities and de facto companies, the tax was triggered by holding, as of March 1, 2026, a net worth equal to or greater than two hundred thousand UVT. Since the UVT for 2026 was set at $52,374, the threshold corresponds to $10,474,800,000. The date of the triggering event and the threshold were set directly by the decree, not by a subsequent decision of the DIAN (tax authority).
Decree 240 set a different rule for permanent establishments and branches of foreign entities: in those cases, net worth is determined as of March 31, 2026, based on assets and liabilities attributable to the permanent establishment in Colombia.
The general rate is 0.5%. However, the decree set a 1.6% rate for certain financial institutions, insurers, reinsurers, stock brokers, securities-market infrastructure providers, and companies engaged in coal and crude oil extraction. The sector burden is therefore 3.2 times higher than the ordinary rate.
For legal entities and de facto companies, the filing and the first 50% payment were due April 1, 2026, while the second installment was due May 4. For permanent establishments and branches, the dates were April 30 and June 1, respectively.
The constitutional debate: equality, connection and proportionality
The discussion should not be reduced to claiming the tax is confiscatory. Confiscatory taxation has a particularly demanding constitutional standard: it must be shown, with concrete economic evidence, that the levy absorbs or erodes the taxpayer's wealth-holding capacity unreasonably. The Court has warned that it is not enough to project a decrease in net worth or claim the rate is high; a material, generalized and disproportionate impact must be demonstrated.
The more direct challenge concerns horizontal tax equity. That principle requires that taxpayers with comparable economic capacity receive similar tax treatment, unless there is a sufficient constitutional reason to differentiate them. The relevant comparison is whether a financial or extractive company and a company in another sector, with the same net worth, can bear radically different rates solely because of the economic activity they carry out.
The mere existence of a sector rate does not by itself determine its unconstitutionality. The Court has accepted that the legislature may establish different tax treatments when the taxed sector shows special economic conditions, extraordinary profits, particular externalities, or a differentiated ability to pay. What the Government must show is that the sector criterion used is reasonable, sufficiently substantiated, and effectively connected to the purpose of the tax.
Added to that discussion is the special regime governing legislative decrees. Being a measure issued during a state of emergency, Decree 173 must not only respect equality and tax equity. It must also pass the tests of purpose, material connection, necessity, proportionality, sufficient motivation, and absence of arbitrariness required by Article 215 of the Constitution and the Statutory Law on States of Emergency.
That review took on a new dimension with Judgment C-191 of 2026. The Court declared the emergency conditionally constitutional, limited its territorial scope to the 181 municipalities whose impact was proven, and ordered that extraordinary funds be used only for expenses directly and specifically related to the disaster. It also required recalculating the cost of the emergency, justifying why ordinary funding sources could not be used, and administering the funds obtained separately. Those conditions now form part of the framework within which the wealth tax must be assessed.
The constitutional question, therefore, is not merely whether companies can contribute more. The Court will have to determine whether a national tax on corporate net worth, with an aggravated rate for specific sectors, was a necessary, proportionate measure directly linked to funding a territorially limited emergency.
Order A-533 of 2026: a limited suspension
Before ruling on the merits, the Court issued Order A-533 of 2026. The ruling provisionally suspended collection of the second installment only for two groups: nonprofit entities under the special tax regime, and legal entities in liquidation as of April 29, 2026. For all other taxpayers, the second installment remained payable and was due May 4.
The suspension did not resolve the dispute over the rates applicable to the financial and extractive sectors, nor did it signal how the ruling would go. The Court clarified that it was a provisional measure meant to avoid potentially serious effects while constitutional review was completed. It is therefore not accurate to present the order as a sign that Decree 173 will necessarily be declared unconstitutional.
What could happen to payments already made
The Court may declare the decree constitutional, exclude some of its provisions, condition its interpretation, or declare it wholly or partially unconstitutional. It also has authority to modulate the temporal effects of its decision.
If the unconstitutionality has only prospective effects, payments made while the rule was in force could stand. If the Court gives the decision retroactive effect, it may order the return or offset of amounts collected. In recent decisions on taxes created by legislative decrees, the Court has used both alternatives and, when it considered it necessary to fully restore constitutional supremacy, has ordered the return or offset of burdens already paid.
There is, however, no rule under which only those who paid "under protest" or left a reservation of legality receive a refund. The DIAN has expressly stated, through Ruling 5835 of 2026, that this figure does not exist in Colombian tax law and that a unilateral statement of disagreement has no effect on the enforceability of the tax nor keeps an administrative dispute open.
The possibility of recovering the funds will depend on the specific content of the ruling and the applicable refund or offset procedure. In tax matters, when the legal basis for a payment disappears, the law provides for the refund of undue payments, but its availability requires proving the corresponding legal and evidentiary requirements.
What companies should do
Companies subject to the tax should treat this matter as an active tax-risk front, not an academic discussion.
The first task is to keep the complete determination of gross assets, liabilities and exclusions applied as of March 1, 2026, or, for permanent establishments, as of March 31. The return, payment receipts, certificates of holdings in domestic companies, and documents supporting each liability and exclusion from the taxable base should also remain available.
Companies subject to the 1.6% rate should separately quantify the difference against the 0.5% general rate. That amount represents the economic exposure directly tied to the sector treatment and would be the starting point for a potential refund or offset request if the Court removes the aggravated rate with effects applicable to payments already made.
The economic classification used should also be reviewed. The special rate does not generically apply to any company related to mining, energy or financial services, but to the entities and activities expressly listed by the decree. An improper classification can generate both an unjustified overpayment and an inaccuracy contingency.
Finally, entities benefiting from Order 533 must keep the suspended second installment identified and provisioned. The suspension prevents its collection while the ruling on the merits is issued, but it does not yet amount to the definitive extinction of the obligation.
What comes next
Decree 173 continues to have effect, with the specific suspension ordered for nonprofit entities under the special tax regime and legal entities in liquidation. For other taxpayers, the filing and payment deadlines have already passed, and the expectation of an eventual finding of unconstitutionality did not justify failing to comply with the obligation.
The tax's constitutionality will depend on several questions that cannot be resolved merely by invoking the fiscal emergency: whether the measure was directly and specifically connected to the disaster; whether the Government proved the insufficiency of ordinary mechanisms; whether the collection is proportionate to the real cost of the emergency; and whether there is a sufficient constitutional justification for two companies with equivalent net worth to bear rates of 0.5% and 1.6% simply for belonging to different sectors.
Given the same net worth, the Constitution does not prohibit every different rate, but it demands an objective, demonstrable and proportionate reason to impose it.
Main sources: Legislative Decrees 150, 173 and 240 of 2026; Judgment C-191 of 2026; Order A-533 of 2026; DIAN Resolution 000238 of 2025 and official DIAN doctrine.