Colombia shifts 19% online gambling VAT to GGR, easing pressure on licensed operators

From 1 January 2026, Colombia will keep the 19% VAT rate on online gambling but change the tax base from player deposits to gross gaming revenue (GGR), a move that regulators and operators say finally aligns fiscal policy with the real economics of the market.

The Colombian government has confirmed a structural change to how VAT is calculated for licensed online gambling. After a year of controversy around a 19% VAT on deposits, a new fiscal decree effective 1 January 2026 sets the 19% VAT on gross gaming revenue (GGR) – that is, total stakes minus prizes paid – rather than on the full value of players’ deposits.

Finance minister Germán Ávila announced the adjustment on 30 December as part of a wider tax package aimed at closing a fiscal gap, explaining that the government would “maintain the 19% VAT criteria for games of chance, but on a taxable base that recognises prize payouts”. The change is formalised in Decree 1474 of 29 December 2025, which explicitly defines the VAT base for gambling as operators’ GGR.

Industry body Fecoljuegos has welcomed the reform as a major correction to what it called an “artificial and disproportionate” model. Under the old deposit-based system, introduced in February 2025 as an emergency measure, the effective tax burden could exceed 70% of real income, and Coljuegos data showed online GGR falling by about 30% within months as players shifted to unlicensed sites. With VAT now calculated on GGR, the combined headline burden on regulated operators is estimated at roughly 34% of GGR (15% exploitation rights plus 19% VAT, excluding corporate income tax and other charges).

Fecoljuegos president Evert Montero Cárdenas has described the shift as “a significant step forward” that recognises “the real mathematics of the business”, but stressed that Colombia still ranks among the highest-taxed online gambling markets globally and that further dialogue is needed to ensure long-term competitiveness versus offshore offerings.

For operators and suppliers, the move brings long-awaited clarity after months of uncertainty over whether the emergency VAT would be extended in its original form. Compliance and finance teams must now reconfigure reporting systems to calculate VAT on net gaming revenue, while regulators will watch closely to see if the new structure helps rebuild the regulated market’s share against illegal competitors in 2026.