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Practical Income Manual 2021.


Regulations: Art. 42.1 Law Personal Income Tax

Income from work in kind constitutes the use, consumption or obtaining, for private purposes, of goods, rights or services free of charge or for a price lower than the normal market, even when they do not entail a real expense for the person granting them, provided that they derive , directly or indirectly, from personal work or from an employment or statutory relationship.

Income from work in kind must be distinguished from those other cases in which there is a simple mediation of payment by the company with respect to expenses incurred by the employee. That is, cases in which the company limits itself to paying an amount on behalf of and by order of the employee. In these cases, the consideration required by the worker from the company does not consist of the use, consumption or obtaining of goods, rights or services, but rather it is a consideration that the company has the obligation to satisfy in monetary form, although By virtue of the mandate made by the employee, the payment is made to a third party indicated by him. That is, the worker allocates part of his monetary remuneration to the acquisition of certain goods, rights or services, but the payment of these is made directly by the employer. In these cases, it will be an application of monetary work income.

However, it should be noted that not always when the employer satisfies or pays amounts to third parties so that they provide their worker with the good, right or service in question, we are in the presence of monetary remuneration, considering that there is mediation of payment, since sometimes remuneration in kind is implemented through a direct payment from the employer to the third party in compliance with the commitments assumed with its workers, whether in the collective agreement or in the employment contract itself and, in such case, the amounts paid by the company to the suppliers would not be considered as a case of payment mediation, in the terms previously indicated, but rather as remuneration in kind agreed in the employment contract, so all the provisions regarding remuneration in kind would apply. species are included in article 42 of the Personal Income Tax Law .

Note: When the payer of the performance of the work gives the taxpayer amounts in cash so that he or she can acquire the goods, rights or services, the performance will be considered money, so the special rules for remuneration in kind discussed above are not applicable to it. in this heading.