In Colombia, a state of social, economic and ecological emergency was declared with the issuance of Decree 417 of March 17, 2020, which adopted measures related to public health and economic aspects. This decree was effective for a term of 30 calendar days.
At the end of the 30-day period, the National Government issued Decree 637 of May 6, 2020, by means of which the State of Economic, Social and Ecological Emergency is declared again throughout the national territory and for a term of 30 calendar days, in order to face the pandemic of the covid-19 coronavirus.
According to Decree 637, among the motivations for the declaration of the State of Economic, Social and Ecological Emergency is the protection of jobs, including formal jobs, and also the Colombian economic system, affected by the pandemic.
In effect, the regulation states that the Economic Emergency seeks to “mitigate the crisis in view of the imminent systematic destruction of jobs with the negative impact that this would have on the economy, not only of Colombian families but of the entire Colombian economic system”.
The National Government also issued Decree 457 of March 23, 2020, which issued instructions for compliance with the 19-day Mandatory Preventive Isolation throughout the Colombian territory, which began on March 25 and ended on April 13.
Subsequently, through Decree 531 of April 8, 2020, the quarantine was extended until April 27, 2020 and new measures were issued to guarantee the life and health of Colombians.
Decree 749 of May 28, 2020 is currently in force, which extends and orders the Mandatory Preventive Isolation of all inhabitants of the Republic of Colombia, from June 1, 2020, until zero hours on July 1, 2020, within the framework of the Health Emergency due to the covid-19 coronavirus.
This Preventive Isolation includes 43 exceptions that seek to guarantee the right to life, health and survival of Colombians.
Among the exceptions, the Decree contemplates wholesale and retail trade, including the operation of shopping centers and real estate activities. Hairdressing services, public parking lots, museums and libraries are also exempted.
Decree 749 also allows outdoor physical activity for adults over 70 years of age, three times a week, half an hour a day. In addition, it makes reference to seven activities that for no reason will be allowed during the quarantine, among which are mentioned “establishments and commercial premises for recreation and amusement, bars, discotheques, dance, leisure and entertainment and gambling and betting, billiards, casinos, bingos and video game terminals”.
The National Government ordered the closure of Colombia’s borders – sea, land and river crossings – with Venezuela, Peru, Brazil, Panama and Ecuador. The measure will be in effect from zero hours on May 31, 2020, until zero hours on July 1, 2020.
- Tax measures: Among the most relevant tax measures, the government has modified the deadlines for filing income tax returns and foreign assets declarations on several occasions. These deadlines started in April of this year, however, the deadlines for the presentation were moved to June.The Super Intendencia de sociedades modified in four opportunities, the deadlines for the presentation of financial information as of December 31, 2019, and that must be sent by all companies in Colombia through the entity’s web portal. These deadlines have been moved to start on June 3, until June 30, 2020, and measures have also been taken to reduce import duties on some medicines, supplies, and devices of the health sector, which are related to pandemic care for a period of 6 months. To promote and facilitate the cash flow of Colombians in general, the National Government through Decree 535 of April 10, 2020, established an abbreviated procedure for the automatic refund of balances in favor in income tax and complementary taxes and sales tax – VAT.For its part for the District of Bogota, the District Secretary of Finance has modified the deadlines for the presentation of the Tax and Withholding of Industry and Commerce, as well as for the payment and presentation of the Property Tax and Vehicle Tax.
- Support measures for employees and employers: Circular 0021 of the Ministry of Labor was issued, in which measures were taken to protect employment during the COVID-19 containment phase and the declaration of a sanitary emergency. Legal mechanisms were also established to protect the right to work, through: Work at home, Teleworking, Flexible working day, Annual, early and collective vacations, Renumbered leaves, Wages without provision of service. It is important to mention that the Ministry did not recommend neither contract suspensions, nor unpaid leaves of absence, nor collective dismissals, and issued Circular 0022 of the Ministry of Labor, where it was informed that a rigorous labor control will be carried out on all decisions taken by employers during the health emergency, in order to avoid massive dismissals in the companies. Likewise, the government issued Decree 677 of May 19, 2020, which establishes or modifies the measures regarding the Formal Employment Support Program-PAEF, within the framework of the State of Economic, Social and Ecological Emergency declared by Decree 637 of 2020. By means of Resolution 1129 of May 20, 2020, the Ministry of Finance defined the methodology to calculate the decrease in income, deadlines for the application and the mechanisms to disperse the resources. See resolution at the end of this article.
The purpose of this program is to support formal employment, which will grant a monthly monetary contribution for up to three times (May, June and July).
In addition to legal entities, natural persons, consortiums and temporary unions that meet the following requirements may be beneficiaries of the PAEF:
- Have been constituted before 1. January 2020; in the case of natural persons, the date of registration in the commercial registry will be taken as a reference. (They definitely leave out the natural persons who are not obliged and therefore do not have commercial registration, lawyers, accountants, etc.).
- Have an entry in the commercial register. In any case, this registration must have been made or renewed at least in 2019. (Non-profit entities must instead provide a copy of the RUT. In any case, only non-profit entities that are obliged to file income tax returns or, failing that, income and asset declarations, as well as exogenous information in magnetic media for the taxable year 2019, may be beneficiaries of the Program). Consortiums and joint ventures, since they do not have a commercial registry, must provide a copy of the RUT.
- Demonstrate the need for the state contribution referred to in Article 1 of this Legislative Decree, certifying a decrease of twenty percent (20%) or more in their income.
- Have not received the contribution referred to in this Legislative Decree on three occasions.
- Have not been obliged, under the terms of Article 8 of this Legislative Decree, to reimburse the state contribution of the Program to Support Formal Employment-PAEF.
- To have a deposit product in a financial institution.
- Individuals who are in any of the following conditions will not be able to access this Program:Have less than three (3) employees reported in the (PILA) corresponding to the contribution period of the month of February 2020 in charge of such individual.Are Politically Exposed Persons (PEP) or are spouses, permanent partners or relatives in the second degree of consanguinity, first degree of affinity or sole civil partner of Politically Exposed Persons (PEP).
On June 3, 2020, the National Government issued Decree 770, by means of which a measure to protect the unemployed is adopted, alternative measures are adopted with respect to the working day, an alternative is adopted for the first payment of the service premium, the Support Program for the Payment of the Service Premium PAP is created, and the Program of assistance to workers under contractual suspension is created, within the framework of the Economic, Social and Ecological Emergency declared by means of Decree 637 of 2020.
Likewise, the Special Administrative Unit for Pension Management and Parafiscal Contributions of the Social Protection (UGPG), within the control tasks it carries out during the three years following the end of the Program, may verify compliance with the requirements established in the decree.
Decree 771 was also issued, which indicates that the employer must recognize the value established for the transportation allowance as a digital connectivity allowance.
The connectivity allowance contemplated is $102,853, which is equivalent to the transportation subsidy decreed by the National Government.
The connectivity benefit will only be available to workers earning up to two legal minimum wages. The measure is temporary and transitory while the sanitary emergency is in force.
- Social security measures:Through Legislative Decree No. 558 of April 15, 2020, the National Government announced the measures to temporarily decrease the contribution to the General Pension System during the months of April and May, and the protection of pensioners under the programmed retirement modality, within the framework of the economic and social emergency.Since April 7, 2020, the National Government has been making a payment called “solidarity income” that seeks to support all informal people who are not receiving any type of subsidy from the state. In total, it has been estimated that three million Colombians will benefit from this economic assistance offered by the National Government.
- Business support: Due to the health emergency, measures were taken by the Government to facilitate the development of meetings in virtual sessions, such as Shareholders’ Meetings, General Shareholders’ Meetings or Board of Directors’ Meetings. Likewise, the Government has made a series of announcements on economic aid for small and medium-sized businessmen, so that they may pay their workers’ payrolls, among other expenses related to their operation, however, when they turn to the banks the situation is difficult, since soft credits are not easily granted. To conclude, I would like to list some of the regulations issued by the National Government under the State of Emergency and which are compared with the Laws issued by the Congress of the Republic, but with a temporary or transitory nature.
|410||16-Mar-20||Customs tariff for the importation of products necessary to face the sanitary emergency.|
|419||18-mar-20||Compensation of sales tax – VAT, in favor of the most vulnerable population.|
|436||19-Mar-20||Customs measures for permanent customs users and high-export users.|
|438||19-Mar-20||VAT exemption on the importation of supplies and items related to pandemic care.|
|458||22-Mar-20||Beneficiaries of sales tax – VAT compensation.|
|461||22-Mar-20||Authorization of governors and mayors to reduce territorial tax rates.|
|462||22-Mar-20||It prohibits the export and re-export of products necessary to face the sanitary emergency.|
|463||22-Mar-20||Reduction of tariffs for the importation of drugs and medical devices.|
|471||25-Mar-20||Protection measures in the agricultural sector.|
|491||28-Mar-20||Notification of administrative acts, extension and suspension of terms,|
|493||29-Mar-20||Interest rate hedging benefit for mortgagors and tenants.|
|518||4-Apr-20||Regulation of the Solidarity Income program,|
|520||6-Apr-20||New dates for filing and payment of income tax and Tax on Assets Abroad.|
|530||8-Apr-20||Exclusion of the Tax on Financial Movements by Not-for-Profit Entities|
|535||Apr-10-20||Abbreviated procedure for refund and/or offset of VAT credit balances .|
|539||13-Apr-20||Whereby biosecurity measures are adopted to mitigate, prevent the spread and carry out the adequate management of the COVID-19 Coronavirus pandemic, within the framework of the State of Economic, Social and Ecological Emergency.|
|636||6-May-20||Whereby instructions are issued in view of the sanitary emergency generated by the COVID-19 Coronavirus pandemic and the maintenance of public order.|
|639||8-May-20||Whereby the Formal Employment Support Program (PAEF) is created, within the framework of the State of Economic, Social and Ecological Emergency declared by Decree 637 of 2020.|
|659||13-May-20||Whereby an unconditional, additional and extraordinary monetary transfer is granted in favor of the beneficiaries of the programs Familias en Acción, Protección Social al Adulto Mayor – Colombia Mayor and Jóvenes en Acción and other provisions are issued within the framework of the State of Economic, Social and Ecological Emergency.|
|660||13-May-20||Whereby measures related to the academic calendar for the provision of educational services are issued, within the framework of the State of Economic, Social and Ecological Emergency.|
|676||19-May-20||By which a direct disease is incorporated to the table of occupational diseases and other provisions are issued.|
|677||19-May-20||Whereby Legislative Decree 639 of May 8, 2020 is amended and measures are provided for the Formal Employment Support Program-PAEF, within the framework of the State of Economic, Social and Ecological Emergency declared by Decree 637 of 2020.|
|682||21-May-20||Whereby a special sales tax exemption is established for the year 2020 and other provisions are issued in order to promote the reactivation of the Colombian economy, within the framework of the State of Economic, Social and Ecological Emergency decreed by Decree 637 of 2020.|
|689||22-May-20||Extending the validity of Decree 636 of May 6, 2020 “whereby instructions are issued due to the sanitary emergency generated by the COVID-19 Coronavirus pandemic, and the maintenance of public order.|
|749||28-May-20||By which the Mandatory Preventive Isolation of all the inhabitants of the Republic of Colombia is extended and ordered, from June 1, 2020, until zero hours of July 1, 2020, within the framework of the Sanitary Emergency due to the covid-19 coronavirus.|
|770||3-Jun-20||The purpose of this Decree is to adopt measures in the labor field, of the Mechanism for the Protection of the Unemployed, and to create employment support programs, within the framework of the Economic, Social and Ecological Emergency, declared by the National Government by means of Decree 637 of May 6, 2020. Decree 770 of 2020 seeks that workers and employers agree that the payment of the mid-year bonus can be made at three times, among other aspects.|
|771||3-Jun-20||Legislative Decree No. 771 states that the employer must recognize the value established for the transportation allowance as a digital connectivity allowance.
The connectivity allowance contemplated is $102,853, which is equivalent to the transportation subsidy decreed by the National Government. The connectivity benefit will only be available to workers earning up to two legal minimum wages. The measure is temporary and transitory while the sanitary emergency is in force.
|666||24-Apr-20||Whereby the general biosecurity protocol is adopted to mitigate, control and carry out the adequate management of the COVID-19 Coronavirus pandemic.|
|676||24-Apr-20||Whereby the biosafety protocol for the management and risk control of COVID-19 in the manufacturing industry is adopted.|
|735||8-May-20||Whereby the biosecurity protocol is adopted for the management and control of the COVID 19 coronavirus risk in the provision of call center services, contact centers, technical support centers, data processing centers, shared services centers, including business process outsourcing, and in home services, messaging and digital platforms.|
|737||9-May-20||By means of which the biosecurity protocol for the prevention of Coronavirus COVID 19 is adopted in the following business and support activities; maintenance and repair of computers and communications equipment; repair of furniture and home accessories, and washing and cleaning, including dry cleaning of textile and leather products (only for homes), divisions described with the International Standard Industrial Classification: ISIC 951, 9524 and 9601.|