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Practical Income Manual 2021.

Assumptions that do not constitute income from work in kind

Regulations: Art. 42.2 Law Personal Income Tax

The following are not considered income from work in kind:

  • Study expenses for updating, training or recycling of employed personnel

    Regulations: Art. 44 Regulation Personal Income Tax

    Included within this concept are studies arranged by institutions, companies or employers and financed directly or indirectly by them, although their effective provision is carried out by other persons or specialized entities, provided that, in addition, the following requirements are met:

    • Their purpose is the updating, training or recycling of their personnel.

    • The studies are required by the development of the personnel's activities or the characteristics of the jobs.

    In these cases, the expenses for transportation, maintenance and stay that are exempt from tax will be governed by the general rules discussed in the following section ( per diems and allowances for travel expenses ).

    Since January 1, 2017, it is understood that the studies have been arranged and financed indirectly by the employer when they are financed by other companies or entities that market products for which it is necessary to have a adequate training by the worker, provided that the employer authorizes such participation.

  • Expenses for premiums or fees for occupational accident or worker's civil liability insurance

    The premiums or contributions paid by the company under an insurance contract, which covers solely and exclusively the risk of a work accident or civil liability occurring to employees in the exercise of their work duties, are not considered remuneration in kind.


    Remuneration in kind constitutes any insurance policy contracted by the company in favor of its employees that covers risks or contingencies outside of work activity and that covers, on the other hand, not only the worker himself but also, where appropriate, to the spouse and children.

    The insurance is required to cover solely and exclusively the risk of a workplace accident or civil liability that occurs to its workers in the exercise of their work activities. The coverage of the contract must reach the worker, understanding said term or expression – “worker” – as a person who provides paid services on behalf of others and within the scope of organization and management of another person, physical and legal, called the employer or entrepreneur.

    Likewise, for the purposes of the insurance coverage that is subscribed to cover the contingencies of disability or death derived from work accidents, it is necessary to point out that the occupational disease is considered a work accident or a variety thereof, and as long as it is not an express exclusion is made in the conventional legal relationship, the concept of work accident includes occupational disease, the only variation being that occupational disease is based on a legal presumption arising from a double list of activities and diseases (Judgments of TS of 11-25-92; 7-19-91; 9-25-91).

  • Loans arranged prior to January 1, 1992

    Regulations: Additional Provision second Law Personal Income Tax

    Loans with an interest rate lower than the legal interest rate on money arranged prior to January 1, 1992 are not considered remuneration in kind, provided that the principal had been made available to the borrower prior to said date.