Introduction
During the first weeks of March, companies tend to distribute profits to their workers. Conversely, some small enterprises have chosen to postpone this process this year. This decision is linked to recent legislation that allows micro and small enterprises (MSEs) to defer the filing of their annual tax returns and the income tax payment.
Relationship Between Tax Payment and Profit Sharing
By law, companies have up to 30 days after the annual income tax filing deadline to distribute profits to employees. Conversely, many choose to distribute profits earlier to deduct these payments as expenses in their tax returns, thereby reducing their tax liability.
Deadline Extension for MSEs Under Law No. 31940
Law No. 31940, effective as of November 2023, extends the deadline for filing the annual tax return and paying income tax for individuals and MSEs. This regulation allows SMEs to postpone these processes for an additional two months. Consequently, the due date schedule for these companies will start from May 26th, instead of March, as is the case with medium and large enterprises.
Effects on Profit Sharing in Small Enterprises
Due to this extension, small enterprises that take advantage of the deferral of tax filing and payment can also defer profit sharing to their employees, given that the 30-day deadline for profit sharing starts from the new due date established by the deferral. It should be noted that this measure is optional and depends on each company’s decision-making.
Obligations of Small Enterprises in Profit Sharing
Small enterprises must share profits with their employees if they meet certain criteria:
- They must have more than 20 employees on average during the year in which the profits were generated.
- They must record annual sales not exceeding 1,700 UIT (Unidad Impositiva Tributaria – Applicable Tax Unit), equivalent to S/8.7 million, taking the 2024 UIT as a reference.
On the other hand, small enterprises registered in the REMYPE (Registro Nacional de Micro y Pequeñas Empresas – National Registry of Micro and Small Enterprises) are not obliged to distribute profits.
Recommendations for Employers and Employees
Employers who decide to leverage the deferral of profit sharing should promptly inform their employees of this decision. Transparent communication is essential for good working and to avoid misunderstandings. Employees, in turn, should be attentive to their employers’ communications and know their rights regarding profit sharing
Conclusion
The possibility of deferring tax returns and payments, and consequently profit sharing, gives small enterprises greater financial flexibility. Conversely, both employers and workers must understand the implications of these decisions and maintain open communication to ensure labor and tax compliance.
Sources: El Peruano / Actualidad Empresarial / Gestión