Mexico: Guidance on social security tax practices
Guidance containing criterion on social security tax practices
Guidance containing criterion on social security tax practices
The Technical Council of the Mexican Social Security Institute (IMSS) on 7 July 2023 published guidance (agreement ACDO.AS2.HCT.260623/160.P.DIR, containing criterion 02/2023/NV/SBC-LSS-27-IV, referring to amounts delivered in cash or in kind for payments that exceed the maximum amount of the participation of workers in the profits of companies (PTU), advances of the same, and payments for productivity bonus concept) establishing that the following actions will be considered improper tax practices in the field of social security:
- Exclusion from the contribution base salary payments that exceed the maximum amount of the PTU, in accordance with the provisions of article 127, section VIII, of the Federal Labor Law (LFT) (i.e., three months or the average of the last three years)
- Making payments in advance or in installments for the PTU, since it is considered that they are made outside the term established in article 122 of the LFT and lose the nature of the right to said benefit
- Excluding from the contribution base salary payments made for productivity bonuses or of any other nature, even when they are granted through gift cards, grocery vouchers or through scheme payments from an employer association
The guidance becomes effective 8 July 2023.
Read a July 2023 report (Spanish) prepared by the KPMG member firm in Mexico
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