Colombia’s Constitutional Court has provisionally suspended a decree that saw operators pay 19% VAT on gross gaming revenue (GGR).
Last January, President Gustavo Petro announced an emergency 19% VAT on player deposits through Decree 175 of 2025, in an attempt to raise finances for state coffers.
The policy was brought in via an emergency decree and was set to be removed at the end of 2025. The decision was widely lambasted by industry stakeholders in the Latam nation.
However, following Decree 1390, introduced on 22 December, the VAT on player deposits was shifted to VAT on operator’s GGR.
This change came into effect on 1 January.
Despite the recent change, the country’s Constitutional Court announced on 29 January that it was suspending the decree with immediate effect.
Outlining why, the court said it was to carry out a full constitutional review of the decree.
The suspension is set to remain in place until the court announces its final ruling at a later date, effectively removing any VAT requirements for online gambling operators in the market.
Potential scenarios from this point forward would see the VAT exemption continue, an unlikely reinstation of the VAT or even a new tax framework being implemented.
Colombia is due to hold its presidential election in May, which could make passing any new legislation this year difficult.
President Petro will not be standing for re-election as he is constitutionally barred from seeking a second term.
Iván Cepeda will instead be on the ballot as the presidential candidate for the left-wing Historic Pact party.
Commenting on the decision, Juan Camilo Carrasco, SORA Lawyers managing partner, told EGR the suspension was “unprecedented” in the South American country’s history.
He said: “Accordingly, and while the provisional suspension remains in force, VAT should be calculated only up to the date hereof, with no further tax effects arising from the suspended decree.
“The suspension will remain in place until the court adopts a final decision on the constitutionality of the emergency declaration and the measures derived therefrom.
“It is worth noting that this type of provisional suspension is unprecedented in Colombia’s constitutional history, which suggests that the emergency decree may face significant challenges in passing the court’s final constitutionality review.”
The initial VAT on player deposits led to several operators, including Rush Street Interactive (RSI) and Codere Online, to speak out against the decision.
At the time of the decree’s introduction, RSI considered reducing operating and marketing expenses in the market, while Codere Online said the ruling would lead to an increase in black market activity.
Stake said it would cover the deposit on players through a cashback promotion.
The post Colombian court suspends 19% VAT decree with immediate effect first appeared on EGR Intel.
Constitutional Court announces decision weeks after levy was switched from player deposits to GGR, leaving standard 15% GGR tax rate as only duty in place
The post Colombian court suspends 19% VAT decree with immediate effect first appeared on EGR Intel.