Deadline for Profit-Sharing Distribution Approaching
Small and medium enterprises (SMEs) must also comply with the distribution of worker profit-sharing, known as Participación de los Trabajadores en las Utilidades de la Empresa (PTU), with a deadline of May 30. For individuals, the PTU distribution deadline is June 29, as 55% of businesses fall under this tax regime according to the Mexican Entrepreneurs Association (Asem).
Exemptions from PTU Distribution
While workers anticipate profit-sharing, some companies are exempt. Roberto Colín, a member of the Tax Technical Commission of the Mexican Public Accountants College, explains that new businesses created within the first year of a fiscal exercise and those launching a new product in their initial two years are exempt. Additionally, non-profit organizations, public institutions with cultural purposes, and businesses with annual revenues below 300,000 pesos are also exempt.
Consequences of Neglecting PTU Obligations
If an SME fails to meet its PTU obligations, workers can request a copy of the declaration from their employer. The employer has 10 days to comply, and if there are unions involved, the timeframe extends to 30 days. In case of objections, a resolution is issued by a conciliation and arbitration board. If the decision comes after the 60-day period, the employer must pay the remaining PTU amount.
SMEs without unions or representatives should not be complacent, as workers can still request a copy and file a complaint with the Federal Procurator for Labor Defense (Profedet) if they detect any irregularities.
Penalties for non-compliance range from 28,285 to 565,700 pesos per worker according to the Federal Labor Law. Moreover, SMEs may face labor inspections or audits by the Secretariat of Labor and Social Prevision, leading to financial strain due to legal fees and penalties.
Impact on Reputation
Besides financial repercussions, neglecting PTU distribution can harm an SME’s reputation. Workers eagerly await this annual payment, and failure to provide it can lead to increased labor dissatisfaction.
Experts advise staying informed about both labor and tax matters. For instance, the profit-sharing limit is three months’ salary or the average PTU of the past three years. SME owners should remember that a portion of their earnings must be distributed among workers, making them partners in the company’s financial success.
Key Questions and Answers
- What is PTU? PTU, or Participación de los Trabajadores en las Utilidades de la Empresa, is a labor right ensuring workers share in their company’s profits.
- Which businesses are exempt from PTU distribution? Newly created businesses (first year), new product-launching companies (first two years), extractive industry startups during exploration, non-profit organizations, public institutions with cultural purposes, and businesses with annual revenues below 300,000 pesos are exempt.
- What happens if an SME fails to meet PTU obligations? Workers can request a declaration copy, and penalties range from 28,285 to 565,700 pesos per worker. SMEs may also face labor inspections and audits.
- How does neglecting PTU affect an SME’s reputation? Failure to distribute PTU can lead to increased labor dissatisfaction, harming the SME’s reputation.
