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Returning capital from Colombia: liquidation payouts, capital reductions with reimbursement, how each slice is taxed and the Banco de la República cancellation

Last verified: 2026-10-27 · Status: Changing

Shareholders can take capital out of a Colombian company either through a liquidation, after every external creditor is paid, or through a capital reduction while the company keeps operating. A reduction with actual reimbursement needs creditor protection (no liabilities, assets at least twice liabilities after the reduction, or written creditor consent) and Superintendencia de Sociedades authorization for supervised companies, with a temporary waiver for earthquake hit companies. For tax, capital returned is not a dividend, retained profits paid on liquidation are extraordinary dividends, and any other surplus over contributed capital is an occasional gain.

USD figures use the TRM (tasa representativa del mercado) of COP 3,157.94 per US dollar valid 27 October 2026, from the official TRM series certified by the Superintendencia Financiera and published on datos.gov.co. Conversions are for orientation only.

Key facts

Assets after a capital reduction must be at least this multiple of external liabilities (absent creditor consent)	2 times liabilitiesCódigo de Comercio art. 145, as of 2026-10-27 · in force
End of the Decreto 1418 capital reduction authorization waiver	2027-08-19 dateDecreto Legislativo 1418 de 2026 art. 12, as of 2026-10-27 · in force
Dividend tax on foreign companies and non residents	20 %ET art. 245, as of 2026-10-27 · in force
Occasional gains rate, companies and non residents	15 %ET art. 313 and 316, as of 2026-10-27 · in force
Right to remit sale, liquidation and capital reduction proceeds	Yes, in freely convertible currency, once the investment is registered textDecreto 1068 art. 2.17.2.2.3.1, as of 2026-10-27 · in force

The rule

1. Shareholders may not ask for total or partial reimbursement of their shares before the company is dissolved and its external liabilities are paid. The Superintendencia de Sociedades authorizes a capital reduction when the company has no external liabilities, or when after the reduction assets are at least twice external liabilities, or when creditors accept it in writing; where liabilities include employee benefits, labor authorities must also approve.
Example: Assets COP 1,000,000,000, external liabilities COP 300,000,000: a reduction with reimbursement of COP 400,000,000 leaves assets of COP 600,000,000, exactly twice liabilities, so the test is met. / Assets US$316,662, liabilities US$94,999, reimbursement US$126,665.Código de Comercio (Decreto 410 de 1971), Art. 144 and 145, 1971-03-27 official text · verified 2026-10-27

2. Among the Superintendencia de Sociedades' functions is to authorize capital reductions in any company when the operation involves an actual reimbursement of contributions; it may grant the authorization through general authorizations under its own terms.Ley 222 de 1995, art. 86 num. 7 as modified by Decreto 19 de 2012 art. 151, Art. 86 num. 7, 1995-12-20 official text · verified 2026-10-27

3. Temporary regime: for one year from the declaration of the earthquake emergency, companies meeting Decreto 1418 art. 9 may reduce capital with reimbursement without Superintendencia de Sociedades prior authorization, if the legal representative certifies no external liabilities, assets at least twice liabilities after the reduction, or written creditor acceptance, using certified or audited statements; reimbursement in kind needs unanimity and labor ministry approval is still needed for overdue employee benefits. Non compliance makes the reform ineffective. The article is marked in force until 19 August 2027.Decreto Legislativo 1418 de 2026 (Diario Oficial 53.630 of 17 September 2026), Art. 12 and parágrafo, 2026-09-17 official text · verified 2026-10-27 · changed: Decreto Legislativo 1418 de 2026 (17 September 2026) suspended the Código de Comercio art. 145 prior authorization for qualifying companies in the emergency area until 19 August 2027.

4. For tax purposes a dividend is any distribution of profits charged to equity to members, except capital reductions and share premium. Branch profit transfers to the foreign head office are also dividends. Dividends paid to foreign companies and non resident individuals bear 20 percent; if paid out of profits that were not taxed at company level, the corporate rate applies first and the 20 percent then applies to the rest.Estatuto Tributario (art. 30 as modified by Ley 1819 de 2016 art. 30; art. 245 as modified by Ley 2277 de 2022 art. 4), Art. 30 num. 1 and 2; art. 245 inciso 1 and parágrafo 1, 2022-12-13 official text · verified 2026-10-27

5. On liquidation, amounts received above the capital contributed are occasional gains (15 percent for companies and non residents) when they are not profits or reserves distributable as dividends and the company has existed two years or more; for younger companies they are ordinary income. Retained profits and reserves distributed on liquidation are an extraordinary dividend.
Example: Distribution of COP 1,000,000,000 to a foreign parent: capital COP 500,000,000 (not taxed), taxed retained profits COP 300,000,000 (20 percent, COP 60,000,000), other surplus COP 200,000,000 (15 percent, COP 30,000,000). Tax COP 90,000,000; net COP 910,000,000. / Distribution US$316,662; tax US$28,500; net US$288,163.Estatuto Tributario, Art. 301 and art. 313, 1989-03-30 official text · verified 2026-10-27

6. A registered foreign investor may remit abroad in freely convertible currency the proceeds of a sale of the investment, of liquidation of the company or of a capital reduction. The decrease or total or partial liquidation of a registered direct investment is recorded at any time by transmitting the Declaración de Cancelación de Inversiones Internacionales through the Sistema de Información Cambiaria, without supporting documents, by the investor, its attorney or representative, or the legal representative of the Colombian company.Decreto 1068 de 2015 (as replaced by Decreto 119 de 2017); Circular DCIP-83 of Banco de la República, Decreto 1068 art. 2.17.2.2.3.1 lit. d; DCIP-83 num. 7.2.1.4 lit. b, 2026-08-25 official text · verified 2026-10-27 · changed: Banco de la República rewrote DCIP-83 num. 7.2.1.4 (substitution and cancellation) on 25 August 2026.

Slice	Treatment	Rate	Source
Return of contributed capital (reduction or liquidation)	Not a dividend	None	ET art. 30, 301
Retained profits taxed at company level	Dividend	20 percent	ET art. 245
Profits not taxed at company level	Dividend	35 percent, then 20 percent on the rest	ET art. 245 par. 1, art. 240
Liquidation surplus that is not profit, company 2 years or older	Occasional gain	15 percent	ET art. 301, 313, 316
Same, company under 2 years	Ordinary income	35 percent for companies	ET art. 301, 240

Tax treatment of each slice paid to a foreign shareholder

Worked example

Capital reduction of COP 400,000,000 for a company with COP 1,000,000,000 of assets and COP 300,000,000 of liabilities meets the twice liabilities test; the reduction is registered, the foreign shareholder receives the money through an FX intermediary and a partial cancellation is transmitted to Banco de la República.
Liquidation of COP 1,000,000,000: COP 90,000,000 of tax (US$28,500), net COP 910,000,000 (US$288,163).

Step by step

Check whether retained earnings exist: paying them out first as dividends or through the liquidation determines the tax.
For a reduction, prepare certified statements and test the twice liabilities rule or obtain written creditor consent; get labor approval if employee benefits are owed.
Obtain Superintendencia de Sociedades authorization when the company is supervised and no general authorization or the Decreto 1418 waiver applies.
Approve the bylaw reform and register it at the chamber of commerce.
Pay through an FX intermediary and transmit the partial or total cancellation of the investment registration.

Common traps

Calling a profit distribution a capital reduction does not change its nature; ET art. 30 excludes only genuine capital reductions and share premium.
A reduction that breaches Código de Comercio art. 145 or Decreto 1418 conditions is ineffective and cannot be registered.
The Decreto 1418 waiver is temporary, covers only companies meeting its art. 9 conditions, and is under constitutional review as an emergency decree.
Without a registered investment there is no exchange right to remit proceeds; fix registration gaps before paying out.

Sources

← Taxes when liquidating a Colombian company: the 10 day DIAN notice, the short tax year, the final return, RUT cancellation and solidary liabilitySelling the shares of a Colombian company as a foreign seller: transfer formalities, the 15 percent rate, minimum price rules, the one month DIAN return and the Banco de la República update →