Ahead of our next webinar about the UGPP and the challenges it imposes to Colombian businesses, our local expert Mauricio Bermudez explains why it is so important to be aware of the requirements to be in compliance with this entity.
What is the UGPP?
UGPP (Parafiscal and Pension Management Unit) is the principal entity in charge of monitoring, controlling and ensuring that all companies operating in Colombia are in compliance with the social security contribution requirements. UGPP is an administrative entity of national order, with legal, administrative autonomy and independent assets.
What situations are arising?
Since last year UGPP is being really strict on the inspections. The entity is paying special attention to detail when monitoring the companies in order to make sure everyone is in compliance. This is actually new for Colombian businesses, considering that the entity has been operating for several years now.
The motive for this sudden change is simple: now (since 2013) is when the UGPP has the tools and technical and administrative faculties to operate correctly. The reason for the problems that the companies are having is simple too: they are ignoring the requirements.
Why are we doing this webinar?
UGPP oversees the companies’ activities to ensure compliance and avoid mishandling of the benefits, of different kind, that the companies have access to. Corrective actions undertaken by the entity have caused anxiety, concern, and have polluted our business environment.
Our aim is to clearly illustrate the exact functions of the entity, what is its reach, and to explain what type of penalties companies may face if they are not compliant. We will inform what activities the companies need to be completing to mitigate the audits – including tips on new and/or better practices, and how to protect their reputation.
During the webinar we will also discuss how to avoid some of the most critical errors, and therefore, the sanctions that can follow. For example, in 2010 a law was established to make sure every Colombian business would proportionately establish and report their salary and benefits (non-salary) contributions. Most of the companies ignored this requirement and are being penalised by the UGPP. Like this one, there are lots of avoidable mistakes that can prevent companies from being fined.
Join our webinar
The webinar is being held next 7 May 2015 at 9am COT (10 a.m. EDT, 3 p.m. BST). joining us will be Jaime Giron, Tax associate for Baker & McKenzie.
Baker & McKenzie is a law firm, established in 1949, with 77 offices worldwide and more than 11,000 employees.
This webinar is relevant to any individual working for a company that is operating in Colombia or looking to invest in the country. However, the webinar will be of special significance for individuals in the finance, human resources and management teams, as well as for individuals in charge of payroll and audits.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.