VAT on Online Gambling in Colombia Temporarily Suspended Pending Constitutional Court Review

VAT on Online Gambling in Colombia Temporarily Suspended Pending Constitutional Court Review

In 2016, Colombia became the first country in Latin America to establish a comprehensive legal framework for online casinos and digital sports betting, marking the beginning of a new era for the regulated gambling industry in the region.

As part of the 2016 regulatory overhaul, Colombia introduced key fiscal incentives to ensure the viability of the online gambling market and attract private operators. One of the most significant measures was the exemption of online betting from Value Added Tax (VAT). This exemption was critical given that licensed operators are required to return at least 83% of turnover to players and pay a 15% gambling tax on Gross Gaming Revenue (GGR). Imposing an additional 19% VAT on bets would have rendered the business model economically unattractive and raised concerns about its long-term sustainability.

Temporary Reintroduction of VAT in 2025

In February 2025, the new government, through Executive extraordinary powers adopted emergency measures without prior congressional approval, subject to subsequent constitutional review. This brought about the introduction of a 19% VAT on online gambling transactions.

The Executive issued a legislative decree temporarily suspending the VAT exemption for online gambling, thereby reinstating a 19% VAT on deposits made for online betting activities. This measure was temporary and scheduled to remain in force until 31 December 2025.

Subsequently, the President sought to make the VAT on online gambling permanent. However, Congress rejected this proposal, and as a result, the temporary VAT measure expired as planned on 31 December 2025.

New Emergency Decrees and Constitutional Review in 2026

On 29 December 2025, the government declared a State of Economic and Social Emergency following the failure of a tax reform bill intended to increase government revenues. Under this new emergency framework, the president introduced a package of exceptional and temporary tax measures for 2026, aimed at financing part of the national budget.

These measures included the reintroduction of a 19% VAT on online gambling, this time applied to Gross Gaming Revenue (GGR), defined as bets placed minus prizes paid.

However, on 29 January 2026, Colombia’s Constitutional Court, exercising its constitutional oversight powers, provisionally suspended the decrees declaring the State of Economic and Social Emergency, along with the tax measures derived from them. The suspension will remain in effect until the Court issues a final ruling on the constitutionality of the decree.

The Court’s final decision will be pivotal in determining the future tax treatment of online gambling in Colombia and the stability of the regulatory framework that has positioned the country as a regional benchmark since 2016.