Colombia Introduces New VAT Treatment for the Music Sector

Colombia’s new Music Law changes VAT treatment from July 29, 2026. Musical works become VAT-exempt, while qualifying instruments, specialised software, hardware and certain manufacturing inputs are excluded from VAT.

Colombia has introduced new VAT incentives for parts of its music sector through Law 2615 of 2026, also known as the Music Law. The law was enacted on July 29, 2026,

and applies from the date of its promulgation. The law introduces a broad framework for supporting Colombia’s music industry, but the most relevant change from a tax and retail perspective is contained in Article 16, which modifies Article 478 of the Colombian Tax Statute and introduces favourable VAT treatment for several categories of music-related goods and services.

What is changing?

The new rules distinguish between products that are VAT-exempt and products or services that are excluded from VAT. This distinction is important and businesses should not treat the two categories as identical.

Under the amended Article 478, musical works become VAT-exempt. This includes compositions, sheet music, arrangements, original phonograms and other musical creative works in physical or digital form. The law treats these as cultural products comparable to scientific and cultural books and magazines.

At the same time, the law provides VAT-excluded treatment for certain other music-sector products and services. These include:

• musical instruments;
• specialised software and hardware for sound editing and creation; and
• certain intermediary licensing services for making phonograms available online.

However, this treatment is linked to non-mainstream artists, and the conditions for obtaining that status are to be further regulated by the Colombian Government through the Ministry of Cultures, Arts and Knowledge and the Directorate of Arts.

The law defines a non-mainstream artist broadly as an artist or group outside the mainstream music industry that develops its career independently or together with other non-mainstream artists. The Government must establish the detailed accreditation criteria, potentially taking into account factors such as income from artistic activity.

Additional VAT relief for instrument manufacturing and repair

Another change concerns businesses involved in the production and maintenance of musical instruments.

Raw materials, inputs, parts, components and specialised tools are excluded from VAT when they are used exclusively for the manufacture, repair, maintenance or assembly of musical instruments in Colombia.

This relief is specifically linked to luthiers, artisans and musical-instrument manufacturers registered in the Music Information System – SIMUS.

What does this mean in practice?

The reform does not mean that every musical instrument or music-related product sold in Colombia automatically becomes VAT-free. Businesses first need to determine the exact legal category of the product or service and whether the conditions attached to the relief are fulfilled. In particular, eligibility may depend on the status of the artist, SIMUS registration or other conditions that still require further government regulation.This is especially important because Colombian VAT legislation distinguishes between VAT-exempt (exento) and VAT-excluded (excluido) transactions. The legal and input VAT consequences can differ depending on which category applies.

For retailers and other businesses selling affected products, the change may therefore require a review of product tax classification and VAT determination in POS, ERP, invoicing and accounting systems. Businesses should avoid simply applying a general zero VAT treatment to all music-related products.

What should affected businesses do?

Businesses selling or manufacturing products covered by the new rules should:

• identify which products and services fall within Article 478;
• distinguish between VAT-exempt and VAT-excluded items;
• determine whether the non-mainstream artist condition applies;
• verify any applicable SIMUS registration requirements;
• review VAT and product tax codes in POS, ERP and accounting systems; and
• monitor further regulations defining accreditation and practical eligibility conditions.

Here you can find the official text of Colombia’s Law 2615 of 2026:

https://www.alcaldiabogota.gov.co/sisjur/normas/Norma1.jsp?i=193857 

http://www.secretariasenado.gov.co/senado/basedoc/ley_2615_2026.html 

Filip Kalaba, Junior Legal Consultant at Fiscal Solutions