After court ruling, how can the nearly $25 billion from VAT on liquor and others be returned? Experts weigh in
The Constitutional Court's decision to overturn the economic emergency decreed at the end of 2025 not only nullified the tax measures adopted at that time, but also opened a new front on how the collected resources could be returned.
TL;DR
- The Constitutional Court unanimously invalidated tax measures from a late 2025 economic emergency decree.
- Funds collected through tax benefits, totaling about $1.6 trillion, will not be returned as they are considered legally consolidated.
- Approximately $25 billion from specific indirect taxes, such as VAT on liquor, may be eligible for refunds.
- Reclaiming VAT on liquor presents significant challenges for consumers due to the indirect nature of the tax and the burden of proof required.
- The high cost and complexity of the claim process are expected to deter most individual consumers, leaving much of the $25 billion unrefunded.
- Large taxpayers or distributors may have an easier time claiming refunds due to organized accounting and significant amounts.
- The principle of consolidated legal situations explains why most collected funds are not being returned.
- The Directorate of National Taxes and Customs (DIAN) would need to establish specific refund procedures, but the onus is on the citizen to initiate the claim.