Special income tax self-withholding: minimum amounts do apply

The Council of State confirmed that the minimum amounts set for withholding tax also apply to the special income tax self-withholding, and it annulled the DIAN doctrine that held otherwise.

This was decided by the Fourth Section of the Council of State in its ruling of September 25, 2026, case file No. 30246.

For companies required to apply this self-withholding, the decision calls for a review of the calculation in Form 350 and an assessment of any amounts that may have been improperly self-withheld.

Which acts were annulled and what did the DIAN maintain?

The Council of State declared the nullity of two pronouncements:

• Official Letter No. 005622 of March 15, 2017: it held that the reference to the income tax withholding bases did not include the minimum amounts. It therefore concluded that the special self-withholding applied to 100% of the payment or account credit subject to the mechanism, regardless of its value.
• Concept No. 005623 of October 2, 2023: it ratified that interpretation, relying on the origin of the self-withholding in the CREE tax and on the need to guarantee resources earmarked for a specific purpose.

The Council's reasoning was limited to Article 1.2.6.7 of Decree 1625 of 2016, which provides that the bases established for calculating income tax withholding also apply to the self-withholding.

What changes in the withholding tax return?

Companies must determine which payments or account credits are subject to self-withholding based on the type of income, the minimum amount in force, and the special rules that apply.

Applying a rate to total monthly income without reviewing these conditions may result in excess self-withholding.

For this reason, before filing Form 350, we suggest the following:

• Identify the type of income and verify the threshold applicable to the period.
• Review the accumulation rules and the exceptions or special bases.
• Apply the self-withholding rate corresponding to the economic activity.
• Keep the reconciliation that supports the declared base.

It should be noted that the ruling neither changes the rates nor eliminates the special bases.

From when does the ruling apply?

It should be noted that the ruling takes effect immediately, from its finality and official publication.

For this reason, for prior periods, it is advisable to evaluate situations that are not yet consolidated.

Concrete action for companies

• Update your accounting and invoicing software.
• Configure thresholds by income type and special rules. Document the transactions not subject to self-withholding.
• Reconcile taxable income and self-withholding bases.
• Filed periods: analyze whether they are final, whether a correction is appropriate, whether it is feasible to offset the amounts in upcoming returns, or whether to file a request for refund of payments not owed.

Prepared by: Diego Sanabria Parra – Founding Partner.

THIS DOCUMENT REPRESENTS THE OPINION OF OUR FIRM. THE TAX AUTHORITIES MAY DISAGREE WITH OUR POSITION. IF YOU WOULD LIKE TO EXPLORE THE TOPIC FURTHER OR REQUIRE SPECIALIZED ADVICE, DO NOT HESITATE TO CONTACT US; WE ARE HERE TO SERVE YOU.