On 15 October 2026, the Council of State (Consejo de Estado) rendered Sentence 28581 of 2026, dismissing nullity challenges against Decree 1601 of 2022 and affirming the validity of the presumed cost percentage system for determining the net income reference used to calculate the contribution base for independent workers’ social security obligations. The high court ruled that applying activity-specific presumed cost ratios constitutes a legitimate administrative simplification mechanism that balances formal compliance burdens with revenue preservation objectives. The decision upholds the regulatory framework allowing independent contractors to compute their contribution base on a deemed net income percentage—varying by economic activity—rather than requiring full accounting records. This methodology directly affects the calculation of health, pension, and occupational risk contributions for millions of self-employed Colombians.
Key Takeaways
- Judicial Endorsement of Simplified Compliance: The ruling legitimizes the presumed cost regime as a proportionate regulatory tool, protecting it from future constitutional challenges on equality or due process grounds.
- Sector-Specific Rate Certainty: Independent workers and their advisors retain reliable, activity-differentiated percentages for contribution planning, avoiding case-by-case discretion.
- Formalization Incentive Preserved: By maintaining a low-compliance-cost regime, the decision supports government formalization policies targeting the informal economy’s transition to contributory social security.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement