Taxes in Colombia: Benefits and Deductions in 2025 if You’re Under Colombia’s Ordinary Regime

Updated: September 2025

If you file taxes in Colombia under Colombia’s ordinary regime, there are several benefits, deductions, and tax credits you can take advantage of this year to legally optimize your tax return.

In plain language: these are the tools that help you pay less income tax, as long as you apply them correctly under the Colombian Tax Code (Estatuto Tributario, ET).

Here’s a simple overview of the main opportunities available for the 2025 tax year.

1. Non-taxable income: reduce your base without affecting deduction limits

Non-taxable income is one of the most effective ways to lower your taxable base.

For 2025, both individuals and corporations can apply the concepts listed in Articles 36-1, 36-3, 45, 46, 46-1, 48, 52, 57-1, and 57-2 of the Tax Code, all still in force.

🔹 Practical example: Dividends that one company receives from another can be treated as non-taxable income (if the rules are met).

These non-taxable items are not subject to the limits of the general income category, which makes them an especially valuable tool for individuals.

📋 Nexo Tip: Make sure you classify and report them properly in your tax return and exogenous information reports (DIAN Resolution 162 of 2023) to avoid penalties or audits.

2. Deduction for obsolete or perishable inventory losses

If your business handles inventory, you can deduct losses from perishable, damaged, or obsolete goods.

Under Article 64 of the Tax Code, these losses can be recognized as deductible expenses for 2025. This applies to companies with goods that are:

• Easily destroyed or lost (e.g., food, chemicals, pharmaceuticals).
• Written off due to obsolescence (e.g., old technology or outdated stock).

💡 According to Article 486 of the Tax Code, if the loss does not exceed 3% of the total value of purchases or inventory, you don’t have to adjust VAT (IVA).

✅ In other words, you can deduct the loss and still keep the VAT credit — as long as you comply with the legal limits.

3. Taxes in Colombia compensations: use past losses to your advantage

Tax compensations allow you to apply past fiscal losses or excess presumptive income from previous years to reduce your 2025 taxes in Colombia.

Here’s what applies this year:

• You can carry forward taxes in Colombia losses from the last 12 years (Article 147 ET).
• You can also apply excess presumptive income generated up to 2021, within a 5-year limit (Article 189 ET).

📊 In the corporate return (Form 110) and the individual return (Form 210), you’ll find dedicated fields for these compensations.

For corporations, these compensations do affect your adjusted taxable income and can reduce your minimum tax rate (TMT), according to Article 240, Paragraph 6 of the ET.

👉 In short: if your company or business has losses from prior years, don’t let them expire — they can significantly reduce your 2025 taxes in Colombia bill.

4. Tax-exempt income: benefits still available in 2025

Tax-exempt income remains an effective tax-saving strategy, though subject to certain limits and conditions.

For individuals

You can use the exemptions allowed under Articles 206, 206-1, and 235-2 of the ET, including:

• Voluntary pension contributions.
• Interest on mortgage loans.
• Labor income exemptions (within the 40% cap).

These are reported in Form 210, line 92, always respecting the maximum percentage limits.

For corporations

Only the exemptions under Article 235-2 apply, such as:

• Investments in Orange Economy projects.
• Agricultural and agroindustrial activities.
• Income from Andean Community (CAN) member countries.

⚖️ Note: Some exemptions no longer reduce the minimum tax base (TMT), which increases the effective taxable income.

This issue is currently under review by the Constitutional Court, and changes may take effect by the end of 2025.

5. ZOMAC regime: new rates for 2025

If your company operates in a ZOMAC (Zone Most Affected by the Armed Conflict), you’ll continue to enjoy reduced taxes in Colombia rates — with a few important adjustments starting this year.

• Micro and small businesses will now pay 50% of the general rate (35%) between 2025 and 2027.
• Medium and large businesses remain at 75% of the general rate.

📉 In practice, this means microbusinesses will see their effective rate go from 25% to about 17.5% of net income.

These companies must also adjust their self-withholdings (autorretenciones) according to Decree 572 of 2025 and DUT 1625 of 2016.

Strategy for 2025: renouncing payroll exemption to offset new self-withholding rates

Decree 572 of May 2025 increased self-withholding rates for companies that apply the payroll contribution exemption (Article 114-1 ET).

This exemption allows companies to avoid paying SENA, ICBF, and health contributions for employees earning up to 10 minimum wages — but it also triggers higher self-withholding obligations.

💡 As a result, some companies are now renouncing this benefit, opting to pay full social contributions and avoid the higher withholding burden.

Under DUT 1625 of 2016 (Art. 1.2.6.6), companies that renounce the exemption are no longer required to apply self-withholding, even if they have employees.

This can help improve cash flow, especially for companies with tight operating margins.

In 2025, the ordinary regime still offers a wide range of tools to optimize your taxes in Colombia legally and strategically.

From inventory deductions and compensations to tax-exempt income and regional incentives, there’s significant room to plan ahead and save.

👉 At Nexo Legal, we help you identify which benefits apply to your business or personal taxes in Colombia — ensuring compliance, reducing tax risks, and improving efficiency.

📩 Contact us for a personalized taxes in Colombia review for the 2025 tax year.