COLOMBIA Trends and Developments Contributed by: Jaime Trujillo, Juan David Velasco, Natalia Ponce de León and Angelica Navarro, Baker McKenzie S.A.S.
Diversity, equity and inclusion: avoiding pink- washing Employers are more aware of the need to avoid being seen as “pink-washing” and are incor - porating diversity, equity and inclusion meas - ures in ESG plans and corporate governance programmes. This may include policies such as affirmative action in recruitment and selec - tion plans, training and coaching programmes for women or other historically discriminated groups, and extended paternity leave to make men responsible for the care of the home, among others. Furthermore, the Ministry of Labour is conduct - ing audits of employers using a gender-based approach. The current focus is on identifying discriminatory practices or situations affect - ing women and the LGBTIQ+ community in the workplace, with the aim of fining employers who promote or tolerate such behaviour. Internal investigations Internal investigations are increasingly common in Colombia as employers face growing regu - latory scrutiny, rising employee awareness of inadmissible conducts, and heightened expec - tations from all involved stakeholders. These investigations help organisations manage legal risks, ensure compliance with labour and anti- corruption laws, and respond proactively to workplace misconduct. The trend also reflects a broader shift towards stronger corporate gov - ernance and transparency standards. AI in HR practices AI is transforming HR processes, particularly in recruitment and personnel selection. This shift has prompted a review of potential discrimina - tory outcomes stemming from biases in algo - rithms and related technologies.
Developments in Tax Matters Tax reform of 2022 – minimum effective tax rate Colombia now has a minimum effective tax rate (METR) which applies to all Colombian entities, with a few exceptions. Although the METR is inspired by and has simi - larities with the OECD’s Pillar Two initiative, the local tax reform did not implement the global minimum tax under the OECD’s BEPS 2.0 pro - ject, and the calculation of the tax is not aligned with the Pillar Two model rules. Several issues have arisen in the application of the formula to determine the “calculated profit”. Among others, it is unclear: • whether the formula allows for the inclusion of accounting losses; • whether the application of the formula may lead to the payment of an additional tax when there is no taxable income; or • whether the formula applies to taxpayers who have previously been afforded special tax benefits and incentives. Tax reform of 2022 – significant economic presence Effective 1 January 2024, Colombia subjects the “significant economic presence” of foreign enti - ties in Colombia to income tax in Colombia. Although these rules are based on the OECD’s Pillar One guidelines, their scope, effects and structure are substantially different from the OECD’s proposals. According to these new rules, a foreign entity or individual will be considered to have a “sig - nificant economic presence” in Colombia if a ”deliberate and systematic interaction” is main -
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