Colombia: New Tax Reform has direct effects on Colombian Labour Law
Law 2155 de 2021, “Ley de Inversión Social” (‘Law of Social Inversion’), has set fiscal measures to articulate austerity and efficiency of the State, to assist the economic and social consequences generated by the COVID-19 pandemic.
The Colombian Congress has issued a new Tax Reform to offset the impact of the COVID-19 pandemic and the economic recession, among other internal issues. It introduces a policy of austerity and a collection model with regulatory elements, that seek to defray the consequences generated by the pandemic and the economic recession on Colombian society, which especially impacts the employment regulation, as the government has designed means to encourage job creation and promote youth employment.
In accordance with the foregoing, the most relevant support measures of Law 2155 of 2021 in labour matters are:
|SUPPORT TO THE COMPANIES AFFECTED BY THE RECENT NATIONAL STRIKE|
|Article 24. Incentive for the Creation of New Jobs||The project aimed to assist employers that create new jobs by hiring additional workers and cooperatives that link new associated workers. The government will finance labour costs such as social security and parafiscal payments.
It is worth mentioning that this incentive can only be applied until August 2023.
|Not Applicable To
1. Companies with non-tax benefits of the State.
2. Workers who received the novelty of temporary suspension or unpaid leave.
3. Entities whose participation of the Nation and/or its decentralised entities is greater than 50% of their capital.
4. The PEP people.
|Chapter II – Article 26. Measures for Economic Reactivation||The national Government will bestow grants to employers – natural and legal persons, consortia, temporary unions, and autonomous patrimonies – payments related to labour obligations of May and June of 2021, increased by the pandemic, the recent national strikes, and the economic recession.
The amount will correspond to the number of employees multiplied by up to twenty per cent (20%) of the value of the monthly minimum salary.
|Potential beneficiaries must demonstrate a decrease of twenty percent (20%) or more in their income compared to the income obtained in March 2021.|
|Article 45. Transitory Reduction of Penalties and Fees
|Generate tax benefits from reductions in penalties and interest rates for natural or legal persons affected by the pandemic, especially on the obligations administered by the UGPP Pension and Parafiscal Management Unit.||1. 100% of the amount due for tax contributions must be paid until 30 July 2022, whose non-compliance has been aggravated by the pandemic.
2. No later than 30 July 2022, 20% of the penalties must be paid.
3. If it is not paid within the term, the resolution that granted the benefit will serve as an enforceable title.
|Article 46: Contentious Administrative Conciliation with the UGPP||For cases in which claims have been filed in the contentious-administrative jurisdiction, the obligation -sanctions and interests- issued by the UGPP may be reconciled, depending on:
a. 1st instance, 80% of the value is settled, if 100% of the contributions owed and 20% of interest and penalties are paid.
b. 2nd instance, 70% of the value is settled, if 100% of contributions and 30% of penalties and interest are paid.
|1. Have filed the claim before 30 June 2021.
2. Have the claim admitted when conciliation is requested before 31 March.
3. That there is no final decision of the process.
|Article 47: Termination by Mutual Agreement||Settle the obligations issued by the UGPP for contributions, penalties, and interests, if 100% of the contributions and 20% of its interest and penalties are paid, while the fines for delay can be negotiated with the payment of 50% of the amount.||1. The obligations of the UGPP must be issued before 30 July 2021.
2. The amounts owed must be paid before 31 March 2022 and must not be filed or have a claim admitted to the process of filing the claim.
Key Action Points for Human Resources and In-house Counsel
For companies affected by recent national strikes, these benefits are concurrent with another social program of subsidies: the PAEF.