Colombia updates self-withholding rates and minimum thresholds for income tax withholding

The National Government of Colombia has issued Decree 0572 of 2025, published on May 28, 2025, by the Ministry of Finance, to adjust self-withholding rates for income tax purposes and revise the minimum thresholds for withholding at source.

This reform aims to enhance the efficiency of the tax system, reduce tax evasion, and ensure timely tax collection.

What does the Decree establish?

Substitution of several articles of Decree 1625 of 2016, the Unified Regulatory Decree on Tax Matters

• Withholding on services, agricultural and livestock purchases, gold transactions, real estate acquisitions, ecclesiastical emoluments, among others.

  
  

• New self-withholding rates by economic activity.

  
  

• Updated minimum thresholds for withholding, such as payments under 2 UVT in some cases or 70 UVT for agricultural purchases.

Self-withholding rates by sector

The decree provides a detailed list of economic activities and applicable self-withholding rates, ranging from 0.55% to 4.5%, depending on the sector. Key examples include:

• Agricultural activities: 1.20%

  
  

• Electricity, gas, and water generation: up to 4.5%

  
  

• Construction: between 1.1% and 3.5%

  
  

• Manufacturing industry: between 0.55% and 1.20%

  
  

• Wholesale and retail trade: between 0.55% and 1.20%

  
  

Purpose of the measure

• Reduce gaps between self-withholding and final tax liabilities.

  
  

• Improve early collection of income tax.

  
  

• Prevent regulatory arbitrage among similar economic activities.

  
  

• Align the system with Colombia’s current economic conditions and tax equity principles.

  
  

Effective date

The new rules will take effect on June 1, 2025, and apply to the 2025 tax year, replacing the previous withholding and self-withholding rules under Decree 1625.

Why are these changes important?

This adjustment directly affects company cash flow, tax planning, and compliance, especially in sectors with high revenue volumes. Companies should review their CIIU classification and verify which self-withholding rate applies.