It's Time for Profit Sharing Payment in Mexico!

As provided by the Mexican Federal Constitution and the Federal Labor Law (FLL), employees are entitled to receive profit participation on their employer's profits every fiscal year. Ten percent of the company's taxable profit (PTU) must be distributed among the employees in order to comply with this legally mandated obligation.

As per the Constitution, FLL, and Income Tax Law (ITL), the applicable rules are the following:

1. A joint commission of an equal number of employers' and employees' representatives (PTU Commission) must determine the distributable amount of profits to the employees.
2. Per the ITL, the fiscal year runs from January 1 until December 31. Companies have to file their tax returns within three months after the end of the fiscal year (January through March).