Published on October 9, 2026
The Colombian Tax Code provides for two mechanisms under which a company’s legal representative may be held liable, using their own assets, for tax obligations that, in principle, are the responsibility of the legal entity they represent. These mechanisms are joint and several liability and subsidiary liability.
Joint and several liability, provided for in Article 793 of the Colombian Tax Code, allows DIAN to demand payment from either the principal debtor or the jointly and severally liable party, without any order of priority between them. Subsidiary liability, governed by Articles 573 and 798 of the same Code, may only be enforced once collection efforts against the principal obligor have been exhausted without success.
In the specific case of the legal representative, Article 847 of the Colombian Tax Code establishes a ground for joint and several liability whereby, upon the dissolution of the company, if the legal representative fails to notify the tax authorities of this circumstance in a timely manner or fails to ensure that tax claims are given priority before the company’s assets are distributed, they may be held liable for outstanding debts, provided that they were joined as a party from the outset of the tax assessment proceedings.
Unlike joint and several liability, subsidiary liability applies when the legal representative fails to fulfill the company’s formal obligations and, after tax assessment proceedings have been conducted against the company, the company fails to satisfy the obligation.
The Constitutional Court, in Judgment C-140 of 2007, and the Council of State, in its judgment of September 30, 2021, have clarified that this liability only arises once the obligation has been determined and collection efforts against the principal debtor have been exhausted without success.
Regarding this matter, in Official Opinion 6375 of 2025, DIAN clarified that a change of legal representative does not automatically exempt the outgoing representative from liability or relieve the incoming representative of all responsibility. When a formal duty was breached during one representative’s tenure and, upon assuming office, the new representative can still remedy the breach, the tax authorities may join both as parties potentially subject to subsidiary liability, while safeguarding their right to a defense through notification of the administrative acts.
In this context, the legal representative’s diligence is the primary means of defense. Article 23 of Law 222 of 1995 requires directors and officers to act in good faith, with loyalty, and with the diligence of a prudent businessperson. According to the Constitutional Court, this standard requires them to be actively informed about and supervise the company’s compliance with its tax obligations.
The Colombian Tax Code also provides mechanisms to qualify the scope of liability. Article 572-1, for example, allows the appointment of a special agent to handle specific tax matters. More generally, subparagraph (c) of Article 572 authorizes the legal representative to delegate the actual performance of the company’s formal obligations to an attorney-in-fact, provided that this appointment is communicated to DIAN. This mechanism distributes operational tasks but does not replace the supervision that remains the legal representative’s responsibility.
In addition, keeping records of significant tax-related decisions and of any warnings communicated to the statutory auditor or the board of directors strengthens the legal representative’s position in the event of potential proceedings.
Ultimately, the legal representative’s tax liability does not disappear upon leaving office, nor does it arise automatically from every breach, as it depends on the applicable type of liability, its specific requirements, and the diligence demonstrated. Formal delegation, documentation of management activities, and an orderly departure from office are the most effective tools for mitigating this risk.
This bulletin is for informational purposes only and does not constitute legal advice. For specific cases, we recommend obtaining tailored legal counsel before making decisions based on the information provided herein. In compliance with personal data protection regulations, REYES ABOGADOS ASOCIADOS S.A. invites you to contact us if you do not wish to continue receiving our legal updates.