David Miles

PTU in Mexico "Participación de los Trabajadores en las Utilidades" Definition PTU is a Mexican acronym which stands for “participación de los trabajadores en las utilidades” that can be translated to workers participation in profits. Mexican law requires companies to pay employees a percentage of profits earned in the year for their contributions to the company. The Political Constitution of the United States of Mexico is the supreme norm of the country which regulates the political and legal procedures of the federal government within Mexican territory. All companies, national or international, must comply with the constitution that states in its 123rd Article that every person has the right to a dignified and socially useful job; to that effect, job creation will be promoted and the social organization for work, according to law. Its 9th section refers to the PTU, “IX. Workers will have the right to a participation in the company’s profits, regulated according to the following norms: a) A National Commission, integrated by employees, employer and government representatives, will determine the percentage of the utilities that should be distributed among employees; b) The National Commission will do the necessary and appropriate investigations and studies to know the general conditions of the national economy. From that, it will take into consideration the need to increase the country’s industrial development, the reasonable interest that should perceive capital and the necessary reinversion of capitals; c) The same commission will be able to revise the determined percentage when new studies and investigations exist that justify them; d) The Law could exempt newly created companies from their obligation to share profits with their employees during a determined and limited number of years, to exploration jobs and to other activities when its nature and particular conditions justify it; e) In order to determine the amount of the profits from each company, the recordable rent will be the base according with the dispositions of the Rent Tax Law. Workers can present objections to the Public Credit and Tax Office Secretary, adjusting to the procedure that law determines; f) The worker’s right to participate in the profits doesn’t imply the faculty to intervene in the company’s direction or administration. Note: If a company didn’t generate profit, then no PTU can be determined. The Federal Work Law states the following in its 117th article: “Employees have the right to a share of their company’s profits, according to the percentage determined by the National Commission for Employees Share in Company’s Profits.” Companies must share profits with their employees in a maximum period of 60 days after presenting their annual declaration of income. Since the last day to turn in this declaration is March 31, employees should receive their share at the latest on May 31st. How do you calculate PTU? PTU is determined by 10% of companies’ profits. This can be done by the following operation: Accumulated income – Nondeductible expenses = Recordable Rent Base for PTU multiplied by the percentage of participation = PTU to be distributed. Employees that don’t receive PTU: Directors, administrators and general managers Temporary employees with less than 60 days of work Domestic employees such as maids, nannies and chauffeurs What happened with the PTU with outsourcing and the work reform law in 2012? The new reform to the Federal Work Law of 2012 created polemic debate among experts who can’t agree whether the PTU is determined by the fiscal year of the outsourcing company or by the operating company that hires the outsourcing. So in theory, employees would receive less PTU if the calculation is done with the outsourcing company’s fiscal year income declaration. Exemptions Mexican law supports certain companies that are (these companies don’t pay PTU): Newly created companies in their first year of operation Those that are producing some new product. (Harder nowadays) Those companies that extract minerals or petroleum during the exploration period Nonprofit companies The Mexican Health System and decentralized public institutions with cultural or charitable ends Companies with capital lower than established by the work and social prevision secretary ($300,000 pesos) Examples PEMEX, an acronym for Mexican Petroleum, is Mexico’s largest contributor to the country’s GDP and income. With the 2012 law reform, PEMEX employees will no longer receive a share of the company’s utilities. (Hydrocarbon Income Law page XXIV and 56) This was done to create incentive for international firms. Outsourcing Bancomer (bank) – The PTU share of profit will be paid by the outsourcing firm which would reduce the payment of PTU by the company that hires outsourcing. (http://www.contadoresbc.org/component/k2/efectos-fiscales-reforma-laboral) Accounting and fiscal strategies There are many ways companies reduce the payment of PTU: by declaring deductibles, differing payments, reporting loses and other strategies. (https://www.kpmg.com/MX/es/Documents/Comunicacion/AO_disminuci%C3%B3n_PTU.pdf) Conclusion There are many ways to legally reduce payments of PTU in Mexico, let’s review the best strategies: 1. Companies in their first year of operations 2. Companies that fabricate some new (innovative) product 3. Outsourcing 4. Accounting and fiscal strategies There have been many big companies like Coca Cola and Telmex that have avoided paying their employees PTU which is illegal, but we hope that national and international companies that wish to do business in Mexico find legal (and moral) ways to operate even though many Mexican companies have avoided paying PTU for many years. References Ley Federal del Trabajo – Cámara de Diputados. http://www.diputados.gob.mx/LeyesBiblio/pdf/125.pdf. Internet. Online. Visited December 27 2014. Constitución Política de los Estados Unidos Mexicanos. http://www.ordenjuridico.gob.mx/Constitucion/cn16.pdf. Internet. Online. Visited December 27 2014. Qué es la Participación de los Trabajadores en las Utilidades. http://www.soyconta.mx/reparto-de-utilidades-empresas/. Internet. Online. Visited December 27 2014. PRACTICA LEGAL - ¿Qué Pasó con el Reparto de … http://mexicoreport.com/es/2013/01/PR-CTICA-LEGAL-Qu-Pas-con-el-Reparto-de-Utilidades-de-los-Trabajadores-que-Trabajan-en-Empresas-de-Outsourcing-y-la-Reforma-Laboral-?aid=1322. Internet. Online. Visited December 27 2014. PTU y las utilidades, ¿Cómo se calcula? – Contador Contado. http://contadorcontado.com/2011/06/16/ptu-y-las-utilidades-como-se-calcula/. Internet. Online. Visited December 27 2014. No más reparto de utilidades para los trabajadores de Pemex. https://acoronamx.wordpress.com/2013/09/22/no-mas-reparto-de-utilidades-para-los-trabajadores-de-pemex/. Internet. Online. Visited December 27 2014. Ley energética quita pago de utilidades – CNNExpansión. http://www.cnnexpansion.com/negocios/2014/06/24/los-petroleros-sin-reparto-de-utilidades. Internet. Online. Visited December 27 2014.