TITLE: Colombia's Constitutional Court Orders Government to Return 25 Billion Pesos in Online Betting Taxes
BODY:
On an unspecified date, Colombia's Constitutional Court (Corte Constitucional) unanimously annulled Decree 1474 of 2025, which had imposed a 19 percent value-added tax (VAT) on spirits and online betting, along with lowering the wealth tax threshold to 2 billion pesos. The decree was issued under an economic emergency declaration that the court found unconstitutional.
The court determined that the economic emergency violated constitutional principles because it was not based on unforeseen or unforeseeable circumstances that would justify the president's use of extraordinary powers. The ruling, delivered by Justice Juan Carlos Cortés, ordered the Colombian Tax Authority (DIAN) to return taxes collected directly and indirectly between December 30, 2025, and January 28, 2026.
The court distinguished between different types of tax revenue. Approximately 1.6 trillion pesos collected through tax benefits—which allowed around 175,000 taxpayers to settle obligations with discounts on penalties and interest—need not be returned, as the government considers these legally consolidated. However, indirect taxes, particularly VAT on spirits totalling approximately 25 billion pesos, must be refunded to taxpayers who can demonstrate they bore the cost through documentation including electronic invoices and bank statements.
The DIAN has 30 days from notification to implement existing legal mechanisms or create a specific procedure for processing refunds. However, experts note that practical recovery will be difficult, as Colombian law operates on a "requested right" basis where citizens must initiate claims. Without formal requests, funds may remain consolidated in the national treasury. Larger commercial entities such as liquor distributors with organized accounting records will have better capacity to claim refunds than individual consumers.