Colombian operators welcome new formula for calculating VAT on gambling

Colombia’s new gaming VAT framework represents a “first step towards restoring rationality” after an error that led the sector to the “brink of collapse”, trade body says.

Colombia.- The Colombian government has approved a new formula for calculating VAT on gambling following pushback from the industry. As of January 1, Value Added Tax on online betting will be levied at a rate of 19 per cent on gross gaming revenue (GGR) rather than on player deposits.

The move was signed off by finance minister Germán Ávila and enacted through an emergency fiscal decree. The change follows industry criticism of the decision to apply VAT to deposits from February of 2025.

The new framework defines GGR “total bets minus prizes paid to players”. Ávila said the move would “restore fiscal balance without suffocating productive sectors.”

“We believe there is room to maintain the 19 per cent rate while adjusting the taxable base to reflect real gaming income,” he added. “This approach respects the mathematical structure of the industry, ensures fairness in taxation and secures the revenues needed to meet our social commitments.”

While President Gustavo Petro’s administration’s introduction of a deposit-based VAT levy was initially intended as a temporary measure to raise funds for the conflict-hit province of Catatumbo, it was announced in September that the tax would become permanent under the government’s 2026 Budget.

That led some operators to pause their investments and expansion plans in Colombia. Codere Online said the decision had made “further investment in Colombia impossible.”

Coljuegos, the national gambling regulator, later reported that monthly tax contributions from operators had fallen by 46.6 per cent year‑on‑year, from COP 43.3bn (€10.3m) in July 2024 to COP 23.1bn in 2025.

The Colombian gambling trade body Fecoljuegos has welcomed the government’s decision to row back on the decision, describing the GGR‑based model as a “first step towards restoring rationality”.

The association’s president Evert Montero Cárdenas said: “This change enables the industry to abandon a state of manifest inefficiency and allows for a small but essential margin in the legal system. But it is a starting point, not an endpoint, in building a sustainable long‑term model.”

The body estimates that Colombian gambling operators now face an overall tax burden of around 34 per cent of GGR, including the 15 per cent concession tax and VAT but excluding other domestic levies.

Cárdenas added: “We recognise the government’s willingness to correct an error that placed the sector on the brink of collapse. This adjustment restores operational viability, but Colombia still needs a broader reform that encourages investment, innovation and formalisation.”

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