To carry out a prize promotion in Colombia, an authorization from Coljuegos, which is the public entity in charge of administering the state monopoly of gambling activities, must be obtained.
To this effect, where there is a payment to enter, a fee equal to 14% of the value of the gross income (100% of the tickets sold) must be paid.
For promotional games (with no direct payment to enter), as they do not generate an income, the fees are calculated based on the value of the prizes to be awarded.
An administrative fee equal to 1% of the value of the prizes to be awarded must be paid.
Regarding online games, operators have to pay annual fees equivalent to 811 times the legal minimum monthly wage (US $223,867 approximately) and fees equal to 17% of the gross income.
For these purposes, online games are understood as games of chance in which the sweepstake and the payment of the prize are made through internet. If the sweepstake is made through physical means and the internet is only a means of commercialization, the game is not considered an online game.
Players will be subject to capital gain tax at a 20% rate on the amount of paid prizes. This tax will be paid completely through the withholding applied by the prize promotion operator.
Prize promotion and gaming activities, unlike online gaming activities, are subject to 19% VAT. Tax basis varies depending on the type of prize promotion/ gaming activity.
Prize promotion operators are subject to corporate income tax at a fixed rate of 33% over any net income generated from the prize promotion activities in Colombia. Corporate income tax rate will be reduced progressively until 30% as of 2022. For purposes of calculating the net taxable income, the online gaming/ prize promotion operator can treat as deductible expenses the prizes paid to the participants.
Last modified 25 Jan 2019