Colombia court orders VAT refunds for online gambling operators

• Colombia’s Constitutional Court voted 8-0 on April 15 to strike down Decree 1474 of 2025, which imposed a 19% VAT on online betting under emergency powers.
• Tax authority DIAN has been ordered to establish refund mechanisms for operators and registered businesses that bore the tax burden between December 30, 2025 and January 28, 2026.
• The government faces an estimated COP 25bn (approximately $6.9m) liability, though analysts expect only a fraction to be reclaimed due to the claim-based refund process.

Colombia’s Constitutional Court has unanimously annulled the emergency decree that imposed a 19% value-added tax on online betting, dealing a further blow to President Gustavo Petro’s effort to plug a multi-trillion-peso gap in the national budget.

On April 15, 2026, the court voted 8-0 to strike down Decree 1474 of 30 December 2025, which had introduced a package of tax measures, including the VAT increase on online gambling and alcoholic beverages, as a consequence of the state of economic emergency declared via Decree 1390 of 2025. Two magistrates, Vladimir Fernandez Andrade and Hector Carvajal Londono, issued concurring opinions.

Emergency powers rejected

The court found that the executive failed to meet the constitutional thresholds required to invoke emergency powers, reinforcing that fiscal policy must be scrutinized and approved by Congress. The ruling closes the door on the emergency-decree pathway for gambling taxation.

Carlos Camargo Assis, who authored the lead opinion on the parent Decree 1390, described the move as an affront to the functioning of Congress, arising from political conflicts over the government’s rejected legislative initiatives. That characterization now frames the broader annulment of the measures Decree 1474 introduced.

The April 15 ruling follows a provisional suspension issued in late January, when the court halted Decree 1390 by a 6-2 majority pending a full constitutional review. Legal experts described that earlier intervention as unprecedented, noting it was the first time in Colombia’s constitutional history the court had provisionally suspended such a decree.

Refunds ordered, but limited

Under the ruling, DIAN has been instructed to establish mechanisms to return funds collected between 30 December 2025 and 28 January 2026. The practical recovery of those funds remains uncertain, as claimants must demonstrate they directly bore the cost of the tax, placing a significant administrative burden on businesses seeking reimbursement.

The court introduced a key distinction that significantly limits the ruling’s financial impact. Funds collected through tax benefit schemes, estimated at approximately COP 1.6 trillion, will not be returned.

Around 175,000 taxpayers voluntarily settled outstanding debts under discounted terms, and the court deemed those payments legally consolidated, allowing the government to retain the majority of revenues collected during the decree’s enforcement period.

The government’s total liability is estimated at COP 25bn (approximately $6.9m). Analysts expect only a fraction to be reclaimed, as Colombia’s system requires taxpayers to initiate claims rather than receive automatic refunds.

What comes next

With emergency powers now ruled out, the government must pursue spending cuts or pass new legislation through Congress to address a budget shortfall exceeding 16 trillion pesos, stemming from the Senate’s earlier rejection of Petro’s Financing Law.

A legislative route faces steep headwinds. The Senate’s Fourth Committee voted 9-4 against making the 19% VAT on deposits permanent, and legal experts note that 2026 is a presidential election year in Colombia, with elections scheduled for 31 May, making new tax legislation politically challenging.

The government has already attempted an alternative approach. In March 2026, Decree 240 introduced a 16% national consumption tax on digital betting and gambling platforms, framed as a flood emergency measure. Whether the Constitutional Court will validate that architecture, or force the government back to Congress for a full legislative route, is set to be the next major flashpoint for the sector.

For operators active in Colombia, the annulment provides short-term relief. The government’s persistent pursuit of gambling revenue, through emergency powers, consumption taxes, and proposed congressional frameworks, signals that the sector will remain a central target for fiscal policy throughout the election cycle.