Colombia's Constitutional Court, in a 16 October 2025 ruling (C-431/25), confirmed that temporary taxes introduced during the security emergency referred to as the "Internal Commotion in Catatumbo" are valid to the extent that total collection does not exceed the authorized budget to be raised by these taxes.

To provide background, Decree 175 2025, issued on 14 February 2025, introduced several tax measures aimed at addressing a crisis in the Catatumbo region and other areas affected by public disturbances.

The Court highlights that these measures, which aim to support specific sectors, set clear rules for monitoring collections and provide a mechanism for refunds if tax revenues exceed authorized limits. Overall, the Court confirms that these emergency taxes are not general revenue measures.

Key points of the Court's decision are highlighted below.

Temporary taxes confirmed

The Court upheld the validity of temporary taxes introduced during the Internal Commotion in Catatumbo, which include:

• Stamp tax: 1%
• Value-added tax (VAT) on online gambling: 19%
• Catatumbo tax: 1% on hydrocarbons and coal

These taxes remain in effect until 31 December 2025.

Purpose of the taxes

The Court emphasized that these temporary taxes are not general revenue measures. They are strictly earmarked to cover urgent needs resulting from the Internal Commotion in Catatumbo. Funds collected can only be used for specific sectors such as healthcare, social protection, education, defense, agriculture and programs aimed at equality and inclusion.

This means the government cannot redirect these resources to other projects or general expenses. For businesses, this ensures that the taxes have a limited scope and duration, ending on 31 December 2025.

Refunds if collection exceeds limits

The Court emphasized a safeguard to prevent over taxation. Specifically, if the total amount collected from these temporary taxes exceeds the budget authorized for emergency measures, the excess must be returned to taxpayers.

For these purposes the Court ordered the:

1. Ministry of Finance to calculates the authorized budget within 30 business days following the Court's ruling
2. Tax authority (DIAN) to report the actual amount collected after the last payment deadline of the temporary taxes

If there is an excess in tax collections the Court instructed that:

• Refunds or compensation will be made proportionally to all taxpayers who paid these taxes.
• Taxpayers have five years from date of the DIAN report to request refunds or compensation.

This mechanism protects companies from paying more than what is constitutionally allowed. Businesses should monitor official reports to identify if they qualify for refunds.