October 17, 2019 Colombian Constitutional Court declares the 2018 tax reform unconstitutional The tax reform should continue to apply for tax year 2019. Taxpayers should continue to monitor the progress of any tax proposals introduced in Congress. If no action is taken, the tax regime in force before the 2018 tax reform will apply beginning January 1, 2020. On October 16, 2019, the Colombian Constitutional Court declared Law 1,943, the 2018 tax reform, unconstitutional because of procedural flaws in Congress's approval process. However, the Court decided that the tax reform will remain in effect until the end of 2019, giving Congress time to approve a new tax law that affirms the 2018 tax reform or introduce new measures that would amend the Colombian tax laws. If a new tax reform law is not approved by Congress by December 31, 2019, the tax regime in force before the 2018 tax reform will apply beginning January 1, 2020. Although the Colombian government publicly announced that it will file a tax bill that is similar to the one approved in 2018, historically proposals have been subject to several changes during the approval process in Congress. Therefore, currently there is a significant degree of uncertainty for 2020 and onwards. The Court did not address whether specific rules included in the 2018 tax reform were unconstitutional because the rules were either (1) already modified or repealed by another law or (2) not effective. ———————————————
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