Horizons publications |
- Germany — New German tax return form increases the level of detail required in connection with foreign employment income
The German Ministry of Finance has issued a new form which is required to be filed with every German income tax return showing foreign employment income for which either a tax exemption or a foreign tax credit is applied in Germany. The introduction of the new form significantly increases the amount of detail that needs to be reported.
- Ireland — Budget 2012
The Irish Budget was presented to the Dail Eireann on 6 December 2011. Of particular interest to expatriate employers was the announcement of a Special Assignee Relief Programme and a Foreign Earnings Deduction which will apply to certain individuals working in Brazil, Russia, India, China or South Africa.
In addition, the current 50% relief from employer pay related social insurance (PRSI) for contributions made by an employee to an employee’s occupational pension scheme is to be abolished from 1 January 2012.
- Ireland — New guidance issued on the Universal Social Charge (USC) and Cross-Border EU/EEA workers
The Irish Revenue issued welcome guidance on 22 December 2011, which outlines the documentation required to prove eligibility for a full medical card and take advantage of a favourable treatment with regard to the Universal Social Charge (USC).
- Italy — The new wealth tax on real estate and financial assets
Law Decree No. 201/2011 introduced two wealth taxes with reference to the ownership outside of Italy, by Italian resident individuals, of real estate properties and financial assets.
- Japan – Individual income tax update
A number of tax changes have recently been introduced in Japan which may impact expatriates working in Japan and their employers. These changes include:- A requirement for employers to make an annual report of equity compensation awarded by a foreign parent entity to Japan resident employees,
- An extension of foreign asset reporting requirements to residents who have foreign assets in excess of JPY50 million,
- Special tax measures for Tohoku Earthquake Restoration.
These changes are expected to come into effect on 1 January 2013.
- Korea — Annual tax law revisions
Several tax law revisions effective for the 2012 tax year were approved by Korea’s National Assembly in late December 2011. Changes which may interest expatriates and employers include:- The introduction of a new upper tax bracket for high income earners,
- An extension to the tax exemption for qualified foreign technicians/engineers, and
- Changes to late payment interest charges on withholding tax payments.
- Malaysia — Higher employers’ contribution for Employees Provident Fund (EPF)
From January 2012, the employer’s contribution for employees’ EPF will be increased from 12% to 13%. The employers’ EPF contribution for employees who are 55 years and above will be increased from 6% to 6.5%.
- Malaysia — Public Ruling No.12/2011
The Malaysian Inland Revenue Board (MIRB) issued a new public ruling (PR) on 20 December 2011 on the “Tax exemption on employment income of non-citizen individuals working for certain companies in Malaysia.” The ruling explains the treatment of employment income derived by non-citizen individuals working for certain types of company, including operational headquarters and regional distribution centre companies in Malaysia.
- Malta — Residence scheme for high net worth individuals (HNWIs) from the EU / EEA / Swiss nationals – removal of minimum stay period in Malta requirement
Malta tax law provides for an HNWI Malta Residence Scheme (the Scheme) for EU / EEA / Swiss nationals. The Scheme confers a special tax status to the successful applicant. Following recent amendments to the Scheme, the requirement for the holder of the special tax status to reside physically in Malta for not less than 90 days in a calendar year has been removed with retrospective effect.
- People’s Republic of China—Audit on social security contributions in Beijing
The Beijing Social Security Management Centre (BSSMC) has announced that it will audit the social security compliance of around 1,300 selected entities for the year 2011. The audit will cover both the enrolment status of employees and the contribution base in 2011. Almost inevitably, the audit will cover the compliance status for foreigners working in Beijing.
- Spain — Tax measures to tackle public deficit
The Spanish government elected in November 2011 has published a Royal Decree that contains urgent budgetary, tax, and financial measures to tackle the Spanish public deficit. These new austerity measures have increased a number of tax rates and are effective as from 1 January 2012 in most cases.
- Sweden — Interpretation of Article 15 of the Nordic tax treaty
A new ruling from the Supreme Administrative Court (SAC) confirms that Article 15.1 of the Nordic tax treaty is to be interpreted in line with the OECD model convention when looking at “where the employment is exercised,” i.e., it is the physical presence of the individual that is decisive rather than where the employment is located.
- UK — Lifetime allowance and non-UK residents: HMRC agree beneficial interpretation
Deloitte has recently obtained confirmation from HM Revenue & Customs (HMRC) that more people will meet the conditions to be regarded as a Relevant Overseas Individual (ROI), than thought previously. ROIs are entitled to claim a Lifetime Allowance Enhancement Factor, increasing the amount which can be saved tax effectively in a UK registered pension scheme.
- United Kingdom — Budget 2012
Key highlights of the UK Budget announced on 21 March 2012 include:- A reduction in the top rate of tax to 45%,
- The introduction of a General Anti-Avoidance Rule,
- Measures to restrict the funding of pensions for family members,
- Abolition of “ordinary residence” for tax purposes.
All these are expected to take effect from 6th April 2013.
- Australia - Living Away from Home (LAFH) Reforms
The Australian government has announced significant reforms to both the eligibility for, and methodology by which, the living away from home (LAFH) concession is applied in Australia. Salary sacrifice of LAFH benefits, such as accommodation, may no longer be tax effective.
- Belgium - Budget 2012 individual income tax measures
After more than 500 days of negotiations, a political agreement was reached and a Belgian federal government was formed.
- Czech Republic - Legislative Changes in 2012 and 2013
For 2013, a significant tax reform has been planned by the Czech government, so we would like to introduce the new provisions in advance.
- Hungary - Changes to the personal income tax and social security rules for 2012
The Hungarian government has recently approved the tax law changes for 2012 that amend the personal income tax and social contribution acts.
- People's Republic of China (PRC) - The collection of trade union contribution in Beijing
According to the trade union Law of PRC and the related regulation, the contribution equal to 2 percent of total wages and salaries of employees should be accrued and paid to the municipal trade unions as a trade union contribution ("Contribution") for the preparation and establishment of primary trade unions.
- People's Republic of China - Essential Change of Social Security Rules in Dalian
Although China has recently introduced a national level Social Security framework covering both PRC nationals and expatriates, unlike the U.S. and most European countries, social security in China, at implementation level, remains managed and administered at municipal level; as such there are regional implementation variations from city to city.
- People's Republic of China - Social Security Rules Update in Dalian
Subsequent to the notice issued by the Social Security Management Center (SSMC) of Dalian regarding removing the ceiling on the employer contribution portion (please refer to our NewsFlash dated October 27, 2011, for details), the SSMC of Dalian city and Dalian Development Areas (DDA) issued further notices to resume the upper limit on the contribution base for the employer portion.
- People’s Republic of China - Tightening reporting and collection of social security contributions
On November 15, 2011, the Ministry of Human Resources and Social Security (MOHRSS) issued the “Administrative Measures on the Reporting and Collection of Social Security Contributions” in draft form ("Draft Regulation") and sought public consultation before December 15, 2011.
- Sweden - Deloitte certified agent with the Swedish Migration Board
Deloitte in Sweden has very recently been appointed as a certified agent toward the Swedish Migration Board.
- The Netherlands - New amendments proposed in Dutch 30% ruling
In our September 21, 2011, NewsFlash, we informed you about several adjustments in the Dutch 30% ruling suggested by the Ministry of Finance in the 2012 tax plan.
- United States - Form 8938 and Reporting of Certain Foreign Financial Assets
Effective for 2011 tax returns, taxpayers with non-U.S. financial assets may be required to report additional information regarding these assets as part of their individual U.S. tax return.
- United States Update - Reporting of Specified Foreign Financial Assets – Form 8938 Finalized and Released by IRS
As a follow-up to our recent newsflash, the Internal Revenue Service (IRS) published temporary and proposed regulations providing guidance on the filing requirements related to the reporting of specified foreign financial assets.
- Belgium - New tax measures for personal income
Over the last few months a number of tax measures have been approved or clarified, including those relating to:- Part year residence in Belgium,
- Tax deductions for non-residents, and
- Communal taxes on foreign movable income.
- China – Dependents of work permit holders no longer able to obtain residence permits in Guangzhou
Spouses and children of foreign nationals holding a work visa in Guangzhou are no longer able to automatically apply for a residence permit with a Z(work) visa.
- China – Implementation rules officially announced requiring all foreign individuals working in China to participate in the People’s Republic of China social security system
From 15 October 2011, all foreign individuals who legally work in the People’s Republic of China under a work permit, resident permit, or permanent residency certificate are required to participate in the People’s Republic of China social security system. The implementation rules provide further detail.
- China – The Individual Income Tax Law of the People’s Republic of China (Sixth Amendment)
From 1 September 2011 an Amendment to the Individual Income Tax Law of the People's Republic of China (the Sixth Amendment) will come into effect which will change the monthly standard deduction and tax rates for salaries and wages, as well as the filing and payment deadline for monthly PRC individual income tax return.
- France — Amended Finance Law 2011 notably affects trusts, wealth tax, and introduces exit tax
Amended law, which entered into force on 31 July 2011, contains significant changes to the taxation of trusts, wealth tax and introduces an exit tax system.
- Germany – Tightening of the rules on tax evasion stresses the importance of compliance in expat payroll
From 3 May 2011, Germany has abolished the rule that penalties can be avoided where an unprompted voluntary declaration of non-compliance is made to the authorities. As a result, there is an increased risk during wage tax audits that employers responsible for the operation of expatriate payrolls may be accused of tax evasion where the reporting of income is incomplete. Confirmation that issues which arose in prior audits have been resolved is recommended.
- Ireland – Share remuneration – PRSI update
The Minister for Social Protection announced on 23 August 2011 that the employee PRSI charge will apply to all share-based remuneration from 1 January 2012, regardless of when any written agreements were entered into between the employer and employee. This announcement only affects PRSI and the position regarding PAYE/Income tax and Universal Social Charge remains unchanged.
- The Netherlands — Amendments proposed in Dutch 30% ruling
The Dutch Ministry of Finance has suggested that several adjustments in the Dutch 30% should take effect from 1 January 2012. A key change is that the specific skills test will be replaced by a gross annual salary standard. Employees who have been subject to the 30% ruling for less than five years as of 1 January 2012, may be subject to checks from the Dutch authorities to see whether they continue to qualify for the ruling.
- Singapore – Singapore tax clearance for non-citizen employees
The Inland Revenue Authority of Singapore (IRAS) has been stepping up enforcement actions on the submission of tax clearance for non-Singapore citizen employees. An employer is required to notify the IRAS by filing Form IR21 for an employee who is neither a Singapore citizen nor a Singapore Permanent Resident (SPR), or who is a SPR who is leaving Singapore permanently, at least one month before the earlier of the expected date of cessation of employment or departure from Singapore. A withholding obligation also applies to the employer.
- Spain — Spanish wealth tax update
Spanish wealth tax has been temporarily reintroduced for the period from 1 January 2011 to 31 December 2012. The tax will apply to residents, non-residents and individuals subject to the special expatriate tax regime.
- Sweden — Proposal for tax relief regime changes for foreign experts and key personnel
The Swedish government has published a proposal for changes to the tax relief rules for foreign experts and key personnel in the 2012 budget. The proposal suggests that an employee should automatically qualify for tax relief if he or she receives a salary higher than two standard base amounts per month; i.e., SEK 85,600 for 2011. The new alternative criteria to qualify for tax relief for foreign experts and key personnel are proposed to be effective as of 1 January 2012.
- United States – President suggests trimming benefits of foreign earned income exclusion
President Obama has recommended scaling back a wide range of tax benefits for high-income individuals, including those provided by the foreign earned income exclusion. The President’s proposal, particularly the section related to trimming the benefits of the foreign earned income and housing exclusions, continues the trend of the last few years of limiting the overall benefit of the exclusions for international assignees. Companies who tax equalize their international assignees and cover the actual tax liabilities of their assignees may bear the brunt of this additional cost. These proposals will face stiff opposition in Congress and may be modified and adjusted multiple times before they are passed as law.
- Australia – Federal Budget 2011-12: Immigration update
In the federal Budget announced on 10 May 2011, a number of immigration related announcements were made. Some of the initiatives attempt to address the systemic problems around attracting and retaining skilled staff in Australia’s regions.
- Canada – The CRA introduces additional waiver form relating to employer withholdings
The Canada Revenue Authority (CRA) recently introduced new Form R102-R ‘Regulation 102 Waiver Application’, for use by a non resident employee who will be exempt from tax in Canada under a treaty. The form must be filed 30 days before the start of work in Canada or the initial payment for employment services.
- China –New law requires all foreign employees to participate in the China Social Insurance Scheme
The Ministry of Human Resources and Social Security has issued a draft of the ‘Provisional Measures for Foreigners to Participate in Chinese Social Insurance Scheme’ implementation rules.
- India – Government updates FAQ on Provident Fund for international workers
The Reserve Bank of India has permitted certain banks to redesignate the accounts of repatriating foreign nationals. It is hoped this will enable receipt of bona fide dues, such as Provident Fund and income tax refunds, after the individual has left India.
- Ireland – Share remuneration: Update from the Irish Revenue Authorities
The Irish Revenue recently issued a clarification to the changes announced in the 2011 Budget in respect of share based remuneration.
- Malaysia – Public Ruling No 1/2011 and the flat tax rate incentive for returning Malaysian professionals
The Malaysian Inland Revenue Board issued a new public ruling (PR), effective from the year of assessment 2011. The PR explains the tax treatment of employment income derived by employees from Malaysia who are seconded by their employer to perform duties outside Malaysia. The treatment does not apply to Malaysian citizens employed in public services or a statutory authority.
- Sweden – Proposed amendment of Swedish Expert Tax Regime and reduced tax rate on Special Income Tax for non residents
In the 2011 Finance Bill, the Swedish government has suggested that the Swedish Expatriate Tax regime should be changed by introducing a salary threshold which would be used as alternative criteria to determine whether an individual qualifies as an employee who holds a key position within a Swedish company. The suggestion is that the threshold should be set at SEK 85,600 gross per month (two basic amounts of SEK 42,800) or SEK 1,027,200 per year.
- United Kingdom – Full time working abroad update and revisions to HMRC 6
HM Revenue and Customs (HMRC) recently provided updated guidance on the meaning of full time working abroad. For these purposes, full-time working abroad means a genuine, full-time, foreign employment. This could be either a contract with a foreign employer or a formal secondment to a non-UK position by a UK employer.
- United Kingdom – Disguised remuneration and expatriate assignments: A further update
Previous Global Employer Services NewsFlashes have outlined the potential impact that the UK’s draft legislation on “disguised remuneration” could have on regular expatriate assignments. This latest update reflects the publication of revised draft legislation as part of the Finance Bill 2011.
- United Kingdom – Proposed Reforms to Non-domiciliary taxation
The government is consulting on a package of reforms, which it hopes will strike a balance between increasing the tax contribution made by non-domiciled individuals and encouraging them to invest in the UK. The reforms, which if implemented will come into effect on 6 April 2012, include increasing the £30,000 annual charge to £50,000 for non-domiciled individuals who claim the remittance basis and have been UK tax resident for 12 out of the last 14 years.
- United Kingdom – Statutory Residence: A consultation
On 17 June the government proposed significant reforms of the UK’s tax residence rules and the taxation of non-domiciled individuals with the aim of improving the certainty and simplicity of the UK tax system for individuals entering or leaving the UK.
- Hungary – Changes in Income Tax and Social Security Legislation
The Hungarian Government has presented to Parliament changes to the income tax and social security contribution acts. Some of the proposed changes have already been adopted for 2011.
- India Tightens Provident Fund Withdrawal Rules for International Assignees
The Ministry of Labour and Employment has amended the provisions of the Provident Fund (PF) and limited the circumstances under which withdrawals can be made.
- United States - Tax Cuts Extended: Implications for Individual Taxpayers
The United States Congress has approved and President Obama has signed legislation (The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010) that extends prior tax cuts approved under President Bush for an additional two years, through 2012.
- United Kingdom – Reduced Annual Allowance: The Hidden Pitfalls for Members of UK Registered Pension Schemes
The UK government has announced various changes to the current UK pension regime including a reduction in the annual allowance from the current limit of £255,000.
- United Kingdom – Immigration – Government Sets First Annual Limit for Non-EU Migrants
The United Kingdom Government announced earlier in the year an intention to introduce a permanent cap on the numbers of non-EU economic migrants from April 2011.
- Russia – Immigration – New Beneficial Treatment of Highly Qualified Specialists
A new Federal Law introduces changes to the migration and tax legislation stipulating new rules applicable to highly-skilled foreign employees.
- Hong Kong – Online Application for Extension of Hong Kong Visas
Hong Kong has announced the launch of its online visa extension facility for non-permanent Hong Kong residents.
- United Kingdom - GES Emergency Budget Newsflash
The UK’s new coalition government announced its first Budget.
- United Kingdom - GES Emergency Budget NewsflashUnited Kingdom – International Social Security: Secondary NIC Extended to Non-UK Employers
HM Revenue and Customs has provided clarification on a number of practical issues related to the new EU social security regime.
- Canada – New Waiver Procedures Related to Employer Withholdings
Revised procedures for obtaining waivers for non-resident employees who will be exempt from tax in Canada under a treaty.
- Japan/Hong Kong – New Double Tax Agreement Announced
Currently domestic law determines whether business visitors between Hong Kong and Japan trigger a tax liability in the other location.
- United Kingdom – International Social Security: New EU Social Security Legislation for Internationally Mobile Employees
On 1 May 2010 the new EU social security legislation came into force.
- United Kingdom – Decision of the Court of Appeal in HMRC v Gaines Cooper
Important ruling on status of HMRC’s guidance to taxpayers
- India – Quota for Foreign Workers
GES Newsflash India – Indian Immigration Quota System for Foreign Workers in India
- GES Newsflash Japan – 2010 Tax Reform
Japanese Tax Commission included a number of proposals which, if implemented, would affect individual taxpayers in Japan
- GES Newsflash The Netherlands – Interpretation of the Concept of Employer in Tax Conventions
The Netherlands has an official material interpretation of the concept of “employer” in tax conventions
- United States – US Treasury Releases Updated Housing Cost Amounts for 2010
The United States Treasury has recognized the increasing cost of housing around the world
