Colombia Court backs emergency VAT measures following budget rejection
2 Feb 2026: The Constitutional Court has backed a range of January 2026 VAT measures (below).
1 Jan: Colombia has implemented a package of emergency tax measures aimed at stabilising public finances after the rejection of the Government’s Financing Law underpinning the 2026 Budget. The measures were enacted through Legislative Decree 1474 of 29 December 2025, issued under the economic, social and environmental emergency powers declared by the Government.
The Colombian tax authority, DIAN, has confirmed that the decree introduces several immediate VAT changes, targeting consumption sectors perceived as resilient to price increases, as well as cross-border digital activity and low-value imports.
VAT increase on alcoholic beverages
One of the most significant changes is a sharp increase in VAT on alcoholic products:
- Liquors, wines, aperitifs and similar beverages are now subject to VAT at 19%, increased from the reduced 5% rate.
- Of the 19% VAT charged, 5% is allocated to Colombia’s departments, in line with Article 33 of Law 1816 of 2016.
This change is notable not only for the scale of the rate increase, but also for its potential constitutional implications. Alcoholic beverages are subject to a state monopoly regime, and the allocation of VAT revenue may be viewed as encroaching on the fiscal autonomy of territorial entities responsible for regulating and managing that monopoly. Legal challenges cannot be ruled out.
VAT on online gambling
The decree also introduces VAT on online games of chance, reflecting a broader global trend towards taxing digital gambling activity:
- Online gambling conducted exclusively over the internet is now subject to 19% VAT.
- The taxable base is the operator’s gross gaming revenue (GGR), defined as total bets placed minus prizes paid over a two-month period.
- VAT liability rests with the operator, including non-resident operators supplying services into Colombia.
This measure significantly expands Colombia’s VAT net for digital services and aligns online gambling with other taxable digital supplies already subject to VAT.
Reduced VAT-Free Threshold for Low-Value Imports
Finally, the decree tightens VAT treatment for low-value imports:
- The VAT exclusion for imports via postal traffic, express delivery or urgent shipments is reduced from USD 200 to USD 50.
- Goods exceeding USD 50 in value are now subject to import VAT.
This change is likely to have an immediate impact on e-commerce imports and aligns Colombia more closely with international trends to curb VAT leakage on low-value consignments.
