The "New" Tax Measures in the Midst of the Collapse of the Extractive Sector

Tax attorney María Alejandra Pedraza authored an article for Lexir analyzing the constitutional and economic risks of Legislative Decree 1474 of 2025, which prevents companies in Colombia's extractive sector from treating royalties as a cost or deduction for income tax purposes. Ms. Pedraza argues that the measure produces the same effect previously rejected by the Constitutional Court. She also critiques the reappearance of a 1 percent tax on the first sale or export of hydrocarbons and coal, which closely mirrors the exceptional levy created by Decree 175 of 2025 for the Catatumbo emergency. She concludes that Decree 1474 heightens burdens on a contracting sector and will likely be struck down for exceeding the limits that govern legislative decrees and states of emergency.

READ: The "New" Tax Measures in the Midst of the Collapse of the Extractive Sector