Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 211

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 8
Chunk 211
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 until such
fund reaches an amount equal to at least 20% of its capital stock from time to time (without adjustment for inflation). For the years
ended December 31, 2022, 2023, and 2024 we did not allocate any amount to our legal reserve fund. As of December 31, 2022, 2023, and 2024,
the legal reserve was U. S. $17,363 or 8.5%, respectively, of our capital stock.

Mexican companies may pay dividends only out of earnings (including
retained earnings after all losses have been absorbed or paid up), after allocation to the legal reserve fund and only if shareholders
have approved the yearly financials from which such earnings are derived and the payment of the dividend. The reserve fund is required
to be funded on a stand-alone basis for each company, rather than on a consolidated basis. The level of earnings available for the payment
of dividends is determined under IFRS. Our subsidiaries are required to allocate earnings to their respective legal reserve funds prior
to paying dividends to us.

Dividends that are paid from a company’s distributable
earnings that have not been subject to corporate income tax are subject to a corporate-level tax payable by us. Companies are entitled
to apply any such tax on the distribution of earnings as a credit against their Mexican corporate income tax corresponding to the fiscal
year in which the dividend was paid or against the Mexican corporate income tax of the two fiscal years following the date in which the
dividend was paid. Dividends paid from a company’s distributable earnings that have been subject to corporate income tax are not
subject to this corporate-level dividend income tax. Dividends paid to resident and non-resident holders with respect to the CPOs and
ADSs are subject to a 10% Mexican tax withholding.

In the event we were to declare dividends, they would be in
pesos. In the case of CPOs represented by ADSs, the cash dividends would be paid to the depositary and, subject to the terms of the Deposit
Agreement, converted into and paid in U. S. dollars at the prevailing rate of exchange, net of conversion expenses of the depositary and
applicable Mexican withholding tax. Fluctuations in exchange rates would affect the amount of dividends that ADS holders would receive.
For a more detailed discussion, see Item 12: “ Description of Securities Other than Equity Securities - American Depositary Shares”.