Decree 1013 of July 14, 2020 established the parameters for the deduction of contributions of employee education, which will not be considered as a remunerative factor for the worker.
Thus, the Decree defines the relevant concepts in the framework of Section 107-2 of the CTC (e.g. Employee/Worker, Members of the Worker/Employee Family Unit, Scholarship Programs, Credits, Investments and Zones of Influence).
Based on these concepts and with the provisions of section 107-2 CTC, education payments made by legal entities in favor of the education of their employees or their family nucleus must comply with the conditions established by the Decree; these are
- Educational programs approved by the management body of the legal entity, ensuring that they are publicized to all employees.
- In line with the previous, access must be allowed to all employees and their families under equal conditions.
- They should also have approval or validation from the national (e.g. Ministry of Education) or local education authority (e.g. Secretary of Education)
- Payments should be made directly, through the financial system.
- The value of the contribution or benefit should only include tuition, fees, books, or software items related to that educational program.
- Finally, in the case of programs taken abroad, they must be validated by the Ministry of National Education, following the guidelines established by Decree 5012 of 2009.
As for payments made for programs or centers of care, stimulation and integral development or initial education for its employees’ children under 7 years of age, the conditions that must be met are
- Educational services approved by the management body of the legal entity, guaranteeing publicity for it to all employees and allowing access to all their children under 7 years of age.
- That the educational services indicated have the authorization of the beneficiary parents, with this authorization also having to prove the filiation with the minor.
- The providers of these services or programs must be registered in the Single Register of Early Education Providers and hold an operating license issued by and in accordance with the rules of the Ministry of Education or the local authorities
- In the case of preschool and basic primary education, they must also have the operating license of the competent local authority.
- Payments must be made through the financial system.
- These educational services must operate during the applicable taxable period, according to the provisions of article 107-2 T.E.
Contributions to primary, middle, or high school education institutions, as well as technical, technological, and higher education institutions e.g. colleges and/or universities), must comply with the following requirements:
- Certificate that these institutions must have from the Ministry of National Education.
- Payments must be made through the financial system, in case of money.
- If the contribution is in goods other than money, it will be given and received for the equity value
As mentioned at the beginning, the payment made by the legal entity in favor of the employee or his or her family under the above conditions cannot be considered as a direct or indirect salary or wage factor. It also cannot be subject to conditions of permanence in the company, nor to the requirement that the worker reimburse the amount paid by the legal entity.
Finally, the Decree determines that in no case may the deduction of Article 107-2 be concurrent with or additional to another tax benefit.