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Tax benefits for companies hiring vulnerable population

Tax benefits for companies hiring vulnerable population

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On August 3, 2021, “El Espectador” website published the benefits for companies hiring vulnerable population, who according to the Ministry of Labor were approved, displaying as follows:

1. Regulatory context

The Ministry of Labor, Social Prosperity and the Dirección de Impuestos y Aduanas Nacionales – DIAN (National Tax and Customs Directorate) socialized the booklet of 20 tax benefits for companies hiring people living in poverty and vulnerable conditions. This also encourages the generation of alliances between the public and private sectors in employment projects.

2. Income tax rate

According to the Ministry of Labor, there are benefits in the income tax rate for micro and small companies (25%) and medium and large companies (50%) for new companies starting activities in zones most affected by the armed conflict.

 In addition, there are benefits in the 0% income tax rate for new companies that start their activities in the Zona Económica y Social Especial – ZESE (Special Economic and Social Zone) in the departments of La Guajira, North Santander, Arauca, and the capital cities of Armenia and Quibdó.

3. Benefit of exemptions

The booklet has benefits of exemptions for the development of the orange economy, innovative sources exploitation of energy production and commercialization, care for the environment, the involvement of people with disabilities, and women victims of violence.

4. Deductions

The primer also contains deductions for employers hiring people with disabilities of 200% in salary payments and social security contributions and 120% for taxpaying employers hiring young people between 18 and 28 years old as their first job.

Likewise, there will be a deduction for employers who hire senior citizens (women from 57 years of age and men from 62 years of age) of 120% of the income tax on the value of salaries and social benefits, and a deduction in the case of hiring women victims of violence of 200% of the income tax on the value of salaries and social benefits.

On the other hand, there will be a 100% deduction for education contributions for employees and children under 7 years of age in institutions endorsed by the Ministry of Education.

5. Exemptions

A 4% exemption on the contribution to the Family Compensation Funds is provided for taxpaying employers who generate new jobs to hire young people between 18 and 28 years of age.

6. Economic Incentive

The economic incentive for contributing employers who hire additional young workers between 18 and 28 years of age in the months of July to December 2021, of 25% of a minimum wage, is provided.

Source: El Espectador 04/08/21

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