Tax scholarships: Point for sports

Much has been said about the great tax burden that Colombian companies must assume as a result of constant tax reforms, which, in recent years, have occurred once every twenty-four (24) months and which inevitably generate a state of legal uncertainty among taxpayers. Notwithstanding the above, it is important to point out that the reforms also bring some "carrots", many times unknown or wasted by taxpayers.

One of these "carrots" can be found in Article 190 of the National Development Plan (Law 1955 of 2019), which added Article 257-1 to the Tax Statute, which establishes a benefit in favor of individuals or legal entities that pay income tax and complementary taxes and that, together with Coldeportes, support the training, support and education processes of Colombian athletes.

In accordance with the provisions of the article in question, Coldeportes must issue no later than November 2019 the decree that regulates the selection and evaluation process of athletes who will benefit from what has been called "Scholarships for taxes", a mechanism that seeks that natural and legal persons support the processes of athletes through scholarships for study or maintenance, in exchange for "negotiable securities for the payment of income tax".

This proposal generates interesting opportunities for individuals and legal entities, by having the possibility to carry out a philanthropic activity and, in exchange, receive a benefit that translates into a tax discount that may not exceed thirty percent (30%) of the income tax payable by the taxpayer, in the corresponding taxable year.

It is also expected that the regulatory decree will clearly establish the conditions of the scholarships for athletes, as well as the committees or persons in charge of the evaluation of the projects presented, the follow-up of the programs and the use of the resources, in order to guarantee transparency and equity among the beneficiaries.

But, beyond the fiscal benefits derived from this measure, it is important to consider that it is a magnificent opportunity to strengthen the processes of our athletes, who, due to difficulties in financing, access and promotion of their careers, seek support from foreign sources or decide to abandon their objectives and devote themselves to other matters.

It is also noteworthy that in recent days President Iván Duque signed the law that initiates the Ministry of Sports. In this way, Coldeportes will become the new Ministry of Sports, which will allow taking advantage of the human and technical resources, as well as the programs that this entity has had to implement the functions of the new portfolio.

Finally, it is important to mention that, although it is not expressly stated, through Article 190 of the National Development Plan, the modification of Article 258 of the Tax Statute is made, which fixed in 25% of the income tax payable by the taxpayer in the respective taxable year, the ceiling for tax discounts established in Articles 255, 256 and 257 of the Tax Statute.

In such sense, the amendment contemplates that the discount for the "Scholarships for taxes", as well as the tax discounts contemplated in Articles 255 (discount for investments made in control, conservation and improvement of the environment), 256 (discount for investments made in research, development and technology or innovation) and 257 (discount for donations to non-profit entities belonging to the special regime) may not exceed (individually or as a whole) 30% of the income tax payable by the taxpayer in the respective taxable year. Another "carrot" to keep in mind.