On June 5th, 2014, the Federal Official Gazette issued the new Regulations for Articles 121 and 122 of the Federal Labor Law (“FLL”) regarding employers’ obligations for Employees Profit Sharing (“PTU”). Several amendments were made. Highlights include: 

The Mexican Tax Authority (“SAT”) will be responsible for analyzing and solving claims or objections initiated by employees regarding the Income Tax Annual Return (ISR) and its attachments. 

New guidelines are established for the legal capacity of employees who appear before the authority claiming to be “the majority of employees within a company” in order to raise a claim related to their employer’s Annual Tax Return.

It is clarified that if the employer files a Supplementary Tax Return in which the income tax base is increased, this will result in an additional profit sharing distribution that must be made within 60 calendar days following the date after which the abovementioned Annual Tax Return was filed. 

The term to carry out the employees’ profit sharing is modified from 60 to 30 business days following the date in which the notice of the resolution that modifies the employees’ profit sharing is made. This only applies to cases in which the SAT has determined that the employees’ claims or objections are indeed admissible, thus achieving consistency between the Regulations and the content of article 121-IV of the FLL. 

Note that tax and labor authorities will be in constant communication between each other in order to confirm the compliance of PTU payment and, if applicable, to sanction any breach.

These new Regulations require that employers meet to submit their legal defense against resolutions or forced payments that increase the taxable profit under which additional PTU payment may be suspended, subject to guaranteeing the employees’ interests in accordance with the provisions of the FLL.