Constitutional Court Blocks New VAT Rules on Gambling in Colombia
Colombia’s Constitutional Court has provisionally suspended a presidential emergency decree that changed how VAT applies to gambling.
The move creates fresh uncertainty for operators and public finances.
The suspension, announced after a 6-2 majority decision, affects Decree 1474 of 2025 – a package of measures from President Gustavo Petro’s administration that moved VAT on online betting from a charge on player deposits to a 19 percent levy on gross gaming revenue (GGR). The decree, signed by Finance Minister Germán Ávila in late December 2025, also included changes to taxes on wealth and alcoholic beverages and was incorporated into the government’s 2026 Budget framework.
Under the court’s provisional order, the contested provisions will not take effect while justices complete a full constitutional review. The ruling means authorities should not collect new taxes created by the decree during the judicial process, though it does not require refunds for payments already made under the suspended rules.
President Petro responded to the ruling by reiterating that the decree had been in force prior to the suspension and therefore enjoyed a presumption of legality. He cautioned that halting the tax changes could produce negative fiscal consequences for state revenues, particularly funds intended to support conflict-affected areas such as Catatumbo.
The industry reaction was immediate. Operators and trade groups had publicly criticised the initial decision in February 2025 to tax deposits, calling the move administratively burdensome and economically distortive. The later shift to a GGR-based levy had been broadly welcomed by many operators as a clearer and more manageable basis for tax calculation, but the court’s intervention restores legal ambiguity.
“The suspension underscores how fraught tax policy can be when introduced by decree rather than through the ordinary legislative process”, said Andrés Martínez, head of regulatory affairs at a Bogotá law firm that advises several gaming companies. “Operators will need to prepare for multiple scenarios: continued taxation on deposits, a return to pre-2025 rules, or eventual validation of the GGR approach. Each outcome has distinct compliance and cash-flow implications.”
Related: Colombia’s Betting Deposit Tax Takes Toll on Operators
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Legal Timeline and Likely Outcomes
Legal experts and market participants expect the Constitutional Court’s full review to take weeks or months, depending on the complexity of admissible challenges and potential requests for additional evidence. Key legal questions include whether an economic emergency decree was an appropriate vehicle for sweeping tax reform and whether the shift in VAT incidence violates constitutional protections or established tax principles.
For operators, the immediate priorities will include reassessing accounting systems, VAT collection mechanisms and ongoing tax filings. Some companies may temporarily freeze changes to customer billing practices pending legal clarity. Regulators such as the Dirección de Impuestos y Aduanas Nacionales (DIAN) will be watching the court process closely, as will regional governments that rely on tax transfers tied to gaming revenue.
Beyond Colombia’s borders, the case has drawn attention from Latin American operators and investors watching regulatory stability in the region. A final ruling that upholds the GGR method could become a reference point for other jurisdictions considering how to tax digital betting, while a judgment against the decree would reinforce the need for legislative debate and parliamentary oversight on fiscal policy.
“The broader lesson is that tax changes affecting digital markets require predictable procedures and clear legal foundations”, Martínez added. “Uncertainty undermines investment and complicates efforts to target revenue where it is most needed.”
Market participants and legal observers will monitor the court’s timetable and any interim guidance from DIAN or the finance ministry. The outcome will determine whether Colombia returns to pre-2025 VAT rules, adopts the GGR standard permanently, or faces a hybrid arrangement negotiated through further legislation.
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