Argentina

Argentina: Verification of authenticity of legal domicile and registered address of the Companies in the city of Buenos Aires at time of incorporation.

Through General Resolution No. 4/2022 dated April 7, 2022, it is clarified that the company’s existence/domicile and registered office address should be stated in the ‘Constitution Deed’ which is filed for incorporation of the companies in the city of Buenos Aires and verification of authenticity should be done by submitting any of the requisite documents.

The registration process should include a verification statement that the Notary has verified the registered office address of the company.

Implication:

This measure will keep a check on the companies operating from fictitious / non-existing addresses in the city of Buenos Aires. Every company having a domicile or registered office address in Buenos Aires will need to prove the authenticity of its domicile and registered office address at the time of incorporation as well as for any subsequent changes.

Argentina: Minimum and maximum basis for employee social security contributions increased to ARS 12,638.40 and ARS 410,742.03 respectively from June 1, 2022

With effect from June 1, 2022, the minimum basis for employee social security contributions is increased to a monthly salary of ARS 12,638.40 from ARS 10,989.91 and maximum basis is increased to a monthly salary of ARS 410,742.03 from ARS 357,166.98. These bases are used for computation of employees’ portion of social security contributions.

Implication:

Employers will need to consider the revised bases for calculating employee’s social security contributions.

Argentina: Increases exemption threshold for increased special deduction / special tax allowance to ARS 280,792 per month from ARS 225,937 per month with effect from June 1, 2022

Argentine Government has increased the special tax allowance (increased special deduction). The special tax allowance (increased special deduction) was introduced in 2021 as a relief for the employees belonging to lower-income groups by exempting income up to a specified threshold. A special deduction is calculated whereby the total taxable net profit amounts to zero where the salary is not exceeding the specified threshold. 

The special tax allowance (increased special deduction) will be as follows:

• The employees with monthly salary settled during the specified period or the average of the gross monthly salary for the same period (whichever is lower) not exceeding the threshold are exempt from income tax. The exemption thresholds are as below:

Nature of income	Exemption Thresholds for Monthly Salary(Amounts in ARS)
	During the period June 1 to December 31, 2022 (period I)	During the period January 1 to May 31, 2022 (period II)
Salary income (not covered under the below categories)	280,792	225,937
Income derived from the performance of public service, labor employment	280,792	225,937
Income derived from retirement/ pension	324,182	260,580

• The employees with monthly salary settled during the specified period or the average of the gross monthly salary for the same period (whichever is lower) exceeding the above threshold but not exceeding ARS 324,182 (ARS 260,580 for period II), can claim increased special deduction as provided in the Act (i.e., as per second part of the last paragraph of Article 30 (c) of the Income Tax Act).

Implication:

Companies need to consider the applicable thresholds for special tax allowance while calculating the tax liability of employees.

Australia

Australia: Minimum wage increased to AUD 812.60 (per week) from AUD 772.60 (per week) for the year 2022-23 (i.e., effective from July 1, 2022)

With effect from July 1, 2022, the Fair Works Commission has increased the minimum wages in Australia to AUD 812.60 (per week) or AUD 21.38 (per hour) from AUD 772.60 (per week) or AUD 20.33 (per hour) for the year 2022-23.

Implication: Employers need to consider the minimum wages, as applicable, while processing payroll in 2022.

Brazil

Brazil: Remote working employees in Brazil to be regulated by the working time regulations and entitled to overtime.

The Brazilian Government modified provisions of the employment code related to remote work by introducing provisional measures (No.1108 and 1109), enacted on March 25, 2022. The regulations came into force immediately and are required to be ratified by the Government within 120 days to remain effective (As per official webpage of Brazil Senate News, these provisional measures need to be approved by the Government by August 7, or they will lose their validity).

The highlights of the measures are as follows:

• Remote working now includes services provided by the employees outside the employer’s premises, whether prevalent or not, with the use of information and communication technologies. Hence, services can be provided by the employees either within or outside the company, irrespective of, which one is prevalent, and which is not limited to telemarketing or teleservice operators. The measures also apply to an employee hired in Brazil but require working remotely from outside the country.
• If the employees with remote work contracts require to attend the office due to their functions/ work responsibilities (even on a regular basis), they will still be considered remote work employees.
• Previously, all remote work employees were exempted from working time requirements and overtime pay. Now, remote work employees and employees hired on a per workday basis are included. Only the employees engaged on a basis of task or production are exempted from working time requirements and overtime. 
• The provision of services under remote work arrangements is required to be expressly mentioned in the employment agreements. 

Implication: 

Employers are required to review the employment contracts executed with remote employees and other workplace policies to make necessary modifications as per the amendments to the employment code.

Bulgaria

Bulgaria increases monthly minimum wage limits from BGN 650 to BGN 710 effective from April 1, 2022

Effective from April 1, 2022, Bulgaria increases the monthly minimum wages from BGN 650 to BGN 710. Further, the maximum monthly amount of the insurable income (that is the base for determining the social security contributions) has also been increased from BGN 3,000 to BGN 3,400 for employer and employee contributions.

The above increase in the minimum wage and maximum monthly amount of the insurable income are both effective from April 1, 2022, applicable up to December 31, 2022.

Implication:

Employers in Bulgaria need to take note of the changes and adjust their payroll policies accordingly. 

Canada

Ontario increases minimum wage rates from CAD 15 per hour to CAD 15.50 per hour effective from October 1, 2022

Effective from October 1, 2022, Ontario has raised the general minimum wage from CAD 15 per hour to CAD 15.50 per hour.

Implication:

Employers should factor in the increase in minimum wages while taking decisions related to payroll.

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British Columbia increases the minimum wage from CAD 15.20 per hour to CAD 15.65 per hour, effective from June 1, 2022

Effective June 1, 2022, British Columbia has raised the minimum wage from CAD 15.20 per hour to CAD 15.65 per hour. British Colombia has the highest minimum wage, amongst all provinces in Canada.

Implication:

Employers should factor in the increase in minimum wages while taking decisions related to payroll.

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Québec’s Bill 96 receives royal assent, it imposes new French language obligations affecting workplaces, businesses, contracts, etc.

The National Assembly of Québec adopted on May 24, 2022, “An Act respecting French, the official and common language of Québec” (Bill 96), which amends language laws in Québec as set in the “Charter of the French Language”. While some provisions of Bill 96 come into effect as of June 1, 2022, others will come into effect over a period of 3 years.

The Bill 96 levies new obligations on companies in Québec province regarding the use of the French language at business, work, commerce, services, etc.

Key Highlights of the Bill 96, which is generally effective from June 1, 2022 (unless otherwise mentioned) are as follows:

• All the employment documentation and communications must be made available in the French language. 
• Any pre-condition related to knowledge of any specific language other than French is prohibited for hiring or internal transfer or promotion, unless the nature of the employment requires proficiency in any language other than French.
• The Bill 96 imposes on Québec employers, an obligation to prevent any conduct of discrimination or harassment against employees having little or no command over a language other than French. An employee can file a claim with the Commission for Standards of Equity, Health, and Safety at Work (“CNESST”) within 45 days from the occurrence of an incident. 
• Francization are rules requiring the companies in Québec to use French in all aspects of work. Currently, the companies having more than 50 employees (for a period of at least six months) are obligated to register with Québec Board of the French Language (Québécois de la langue française) and obtain a “certificate of francization” attesting that French is used at all levels of the company. Effective June 1, 2025, this requirement will apply to all companies having more than 25 employees.
• Effective June 1, 2023, the Bill 96 requires that all standard contracts to be initially offered in the French language, except for companies with limited presence in Québec, provided they are used in relationships outside of the province. 
• Effective June 1, 2025, in public signs and commercial advertising, a trademark in a language other than French will be permitted when no French version of the trademark is registered in Canada and when a French generic description or slogan is added. If these conditions are not met, the trademark is required to be accompanied by a markedly predominant French translation.
• The Bill 96 creates a new right that allows anyone who feels that his ‘right of the French language’ has been violated to initiate a civil action against the offending party.
• The Bill 96 also provides for fines ranging from CAD 1400 for the first offense to CAD 42,000 for second and subsequent offenses, on directors and officers of the company for non-compliance. 

Implications:

• Employers will have to amend all the policies, handbooks, contracts, other legal and employment documents into French, 
• Employers with more than 25 employees will have to register with the Québec Board of the French Language (Office Québécois de la langue française) and obtain a “certificate of francization”. 
• E employers will have to ensure that the “French language right” of employees is not violated at the workplace.

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China

China and Shanghai release new businesses measures to support the economy

In the wake of pandemic lockdowns, the China State Council on May 31, 2022, released a new policy package for stabilizing the economy and helping enterprises to overcome the pandemic effects as soon as possible.

Highlights of the measures set out in the policy package are as follows: –

• Value Added Tax (“VAT”) measures

Additional industries including education, cultural, sports and entertainment, wholesale and retail etc. are being considered for extension of VAT rebate.

• Delayed payment of Social Security Premiums

Additional industries including culture, arts, sports, and entertainment, equipment manufacturing, automotive manufacturing, radio, television, film etc. are also being considered for allowing delayed payment of pension insurance, unemployment insurance, and work-related injury insurance (social security premiums). The implementation would be in stages till the end of 2022.

• Allowed delayed payment of House Provident Fund

• Pandemic-impacted companies may apply for the delayed payment of the House Provident Fund. During the period of delay, employees can normally withdraw and apply for housing provident fund loans, which will not be affected by the delayed payment. If loan repayment is not made within the specified period, then it will not be treated as overdue and will not be included in credit reporting. 
• In Shanghai, the deferral period is from April to December 2022, and where employees are required to withdraw house provident funds to pay the house rent, the withdrawal limit has been raised from RMB 2,500 to RMB 3,000.

• New incentives to companies for hiring new employees:

Companies that hire 2022 graduates before December 2022 will receive a one-time subsidy of RMB 1,500 per employee. To qualify for the subsidy, companies must enter into labor or employment contracts with employees and participate in an unemployment insurance scheme.

• Subsidies on Utilities

Subsidies would be given to Micro, Small & Medium Enterprises (“MSMEs”) for utilities such as water, electricity, and gas. Further, additional 10% discount (over and above the 10% discount already provided in 2021) would be given on broadband and on private line tariffs.

• Deferment on principal and interest repayment

MSMEs can defer the payment of principal and interest repayment till the end of 2022. 

The Municipal Government of Shanghai, intending to revitalize the economy following a nearly two-month lockdown, issued an action plan on May 29, 2022, for speeding economic recovery and revival. 

The highlights of the action plan are as follows: –

• Annual Report deadline extended

The annual report filing deadline has been extended from June 30, 2022, to September 30, 2022.

• VAT refund

From April 2022 onwards, micro, and small firms in all industries and enterprises engaged in software and information technology services, scientific research, technical services, and so on, are now able to receive a monthly refund for excess input VAT credits.

• Subsidy for reduction in rent charged

Few companies that reduce rent for MSMSEs and individuals are eligible for a 30% subsidy of total rent waived, up to the limit of RMB 3,000,000.

• No approval is required for resuming work

Effective June 1, 2022, companies who want to resume their work and production can resume their work without going through any application process.

• Supportive measures for foreign investment 

The Shanghai government is holding a series of events to interact with international investment companies, listen to their concerns, and provide appropriate answers. The government will also help with entry and exit processes for foreign workers, their relatives, worldwide executives, and professional and technical staff carrying out essential commercial operations in Shanghai.

• Other benefits: 

• Non-residents in Shanghai are eligible for up to 10% water, electricity, and gas subsidies, and their access to these utilities will not be disconnected during pandemics, if they are unable to pay fees on time or are not liable for any penalties;
• A 10% reduction in the average tariff of broadband and private lines for MSMEs;
• Fees for special equipment testing and inspection is reduced by 50% from April to December 2022;
• Companies that hire employees who are graduated from the ‘University of Shanghai’ in 2022 or who have been unemployed for more than three months are eligible for a one-time subsidy of RMB 2,000 per employee; Companies that hire recent graduates from the University of Shanghai are eligible for a three-year subsidy of RMB 7,800 per year per employee.
• Pandemic impacted companies and social organizations can receive a subsidy of RMB 600 per employee for providing business related vocational training (thrice in 2022).

Implication:

Companies and MSMEs of Shanghai and China shall evaluate their eligibility to the incentives for packages and avail the benefits.

Shanghai and Beijing revise salary thresholds for social security contribution effective from July 1, 2022

Shanghai and Beijing vide communication dated July 5, 2022, and July 19, 2022, have respectively revised the upper and lower monthly payment base limits effective from July 1, 2022, for the contribution to social insurance (basic pension insurance, unemployment insurance, work-related injury insurance, and basic medical insurance including maternity) and to the housing fund as follows: –

Sr. No.	Name of the City	Upper capped payment base(In RMB)	Lower capped payment base(In RMB)
1	Shanghai	34, 188(Previously 31,014)	6,520(Previously 5, 975)
2	Beijing	31,884 (Previously 28,221)	5, 869(Previously 5,360)

Implication:

Companies should consider revised thresholds while computing social security contributions.

Colombia

New guidelines for remote working

On April 9, 2022, the Colombian Ministry of Labour issued Decree 555 of 2022, which provides general guidelines for remote working, which include:

• The remote working agreement must include certain minimum clauses such as job description, work timings, monthly compensation/allowance for use of employee-owned work equipment (such as internet, electricity, etc.), details of work accessories/equipment provided by the employer, safety measures for equipment, data security, etc.
• The employer is required to submit a copy of the remote employment contract to the Labour Risk Administrator (administradoras de riesgos laborales – “ARL”) along with the specified form as required by the ARL.
• The employer is required to provide necessary work accessories/equipment, virtual verification of health and safety of employees and the workplace, safeguarding the right to disconnection after office hours for employees, etc.
• The employee is required to ensure the safe keeping of the work equipment provided by the employer. The employee is required to provide correct information about the workplace and update the employer on any changes.

Implication:

Employers need to check the remote working agreements and other work policies and modify them as per the amendments.

Croatia

Croatia is set to become the 20^th European country to adopt the Euro; Kuna ready to be replaced by Euro from 2023

As per the Convergence Report of the European Commission (“EC”), Croatia is ready to adopt the Euro (“EUR”) as its national currency beginning from January 1, 2023. Accordingly, its current currency ‘Kuna’ will be replaced by the ‘Euro’. The European parliament has approved the same. The Parliament’s opinion will now be forwarded to the Eurozone Member States, who will give the final clearance to Croatia.

Croatia will be the 20th European country to adopt the Euro as its currency.

Implication:

Businesses will need to prepare for the change in the currency for making calculations, accounting, and payments to employees, vendors, and other stakeholders.

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Czech Republic

Czech Republic: Additional information to be reported by the employers in “De-registration Form” upon employee termination.

Effective from April 1, 2022, as per the amendments to the “Employment Act and the Sickness Insurance Act”, reporting of certain additional information is mandated in the “De-registration Form” (Form), which is to be submitted to the Social Security Administration, post termination of the employment.

The following additional information is to be reported in the Form:

• The type of employment.
• The duration of employment.
• The manner and reason for the termination of employment.
• The average or likely monthly net earnings; and
• The severance or redundancy pay entitlement, if any, including whether it has been paid.
• The period of pension insurance (payable in case of retirement or completion of specified years of service).

The employers need to intimate the above additional information in the De-registration Form which is to be submitted within 8 days from the termination of the employment. Failure to report the additional information or failure/ delay in submitting the Form may result into a fine of up to CZK 20,000.

Implication:

Effective April 1, 2022, the employers are required to include the additional information in the De-registration Form and submit it timely after the termination of the employment. 

Czech Republic: Obligation for the employers to report Ukrainian employees under temporary protection to the Labour Office

The employers in the Czech Republic are required to report any employees who are citizens of Ukraine, and under temporary protection to the Labour office (regardless of whether they are under an agreement to perform work or to complete a job).

This reporting obligation has been made mandatory as per article 87 of the Czech Employment Act, failure of which may result in a fine of up to CZK 100,000 from the State Labour Inspection Office.

Implication:

The employers will have to record and report existing or new employees working in the Czech Republic, who are citizens of Ukraine and under temporary protection.

Denmark

Denmark: Phase-wise implementation of digital invoicing and record-keeping from January 2024 to January 2025

On May 19, 2022, the Danish Parliament passed a ‘New Bookkeeping Act’, which mandates taxpayers to maintain their books electronically using a digital accounting system including digital invoicing. The new act is effective from July 1, 2022, but the obligation will be implemented in a phased manner, as under:

• From January 2024 – All companies that are obliged to submit annual report to the Danish Tax Authority.
• From January 2025 – Other companies that are not obliged to submit annual reports but exceed turnover thresholds of more than DKK 300,000 in the previous 2 calendar years.

The Law also lays down the specifications for the digital accounting system. The systems shall be able to support automatic transmission and receipt of e-invoices as well as continuous recording of the business’s transactions.

Implication:

Companies which meet the criteria listed for application of digital accounting should take note of the obligation and get their systems ready to meet the deadline.

Finland

Finland’s Family Leave Reform enters into force on August 1, 2022; increases parental leave and provides flexibility to avail the leave

In Finland, 2022 reform of family leaves will come into effect on August 1, 2022.

The reform includes changes in the Finnish health insurance act, the contracts of employment act, and the early childhood education and care act. The reform will impact the families in Finland where the expected due date of childbirth is September 4, 2022, or later. Further, parents adopting a child (i.e., placed into the family) on or after July 31, 2022, can take family leave and can be paid parental allowance from August 1, 2022.

Key changes of the reform are:  

• The parental allowance entitlement will be based on the birth or adoption of a child up to a maximum of 320 working days. The parental allowance entitlement of 320 days (160 days for each parent) can be shared between the parents. The parents may give up to 63 days of their entitlement to the other parent or some other person who provides care for the child. 
• In addition to the parental allowance, the pregnant parent will be entitled to a pregnancy allowance of 40 days if the pregnancy has lasted at least 154 days.
• The parental allowance can be used until the child turns two years of age or up to two years from adoption. The parental leave can be taken in a maximum of four parts, each shall be of a minimum of 12 working days.

Implication: 

Employers will need to update their leave policy in view of amended provisions. Employers should also take note of other amendments and make suitable changes to their human resource policies.

France

France increases minimum wage and daily sick leave allowance effective from May 1, 2022.

Effective from May 1, 2022, the minimum hourly wages in France increased to EUR 10.85 (previously EUR 10.57). Due to the aforesaid increase, the minimum gross monthly salary will increase to EUR 1,645.58 (previously EUR 1,603.12).

Due to increase in the minimum wages as above, the employee shall be entitled to receive an increased daily allowance of EUR 48.69 in case of sick leave. Daily allowances are paid by France’s national health insurance organisation (Caisse Primaire d’Assurances Maladie/CPAM) to compensate employee’s salary during the work stoppage due to sickness. 

The maximum daily allowance cannot exceed 50% of employee’s basis salary. However, salary taken into consideration is capped at 1.8 times of the gross monthly SMIC i.e., EUR 2,962.05. 

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France: Single online platform for setting up a business to be effective from January 1, 2023

The French government is working towards the promotion of business growth through the introducing the Action Plan for Business Growth and Transformation (“PACTE Law”). Currently the new businesses need to register with the French tax administration (“Centre de Formation des Entreprises/CFE”) and various other organizations based on the activity or sector.

The National Industrial Property Institute (“Institut national de la propriété Industrielle/INPI”) has launched an online platform which will be single window for performing all business set up formalities regardless of sector or legal form. The business shall continue following the set-up process with their relevant CFE and paper submissions until December 31, 2022. However, from January 1, 2023, the online platform would be only way for completing all business formalities

Implication:

Companies planning to set-up operations in France should take note of this development. 

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Germany

Germany: Tax Relief Act 2022 enters into effect from May 31, 2022

Considering the rising energy cost due to Ukraine-Russia war, the German Government has declared certain tax reliefs which were published in the official gazette on May 31, 2022

Following are the key highlights of Tax Relief Act 2022:

• Basic personal tax allowance increased from EUR 9,984 to EUR 10,347 with retroactive effect from January 1, 2022.
• Employee allowance for work related expenses increased by EUR 200 to EUR 1,200 with retroactive effect from January 1, 2022.
• Long distance commuter allowance increased from EUR 0.35 to EUR 0.38 per kilometre (for each kilometre above 20 kilometres) with retroactive effect from January 1, 2022 and will be available till 2026.
• One off child bonus of EUR 100 to be added to child benefit in the month of July 2022 to help families in this difficult time due to increased energy prices. This will not be considered as income for social security benefit
• Recipients of social security and unemployment benefits shall be entitled for one-time payment of EUR 200 and EUR 100 respectively.
• All individuals are entitled for the discounted transport ticket of EUR 9 per month for the months from June to August 2022.
• All employees whose income is subject to tax will be paid a taxable energy cost of amount of EUR 300 from September 1, 2022. This amount would be taxable but will not be subject to social security contributions.

Implication:

Employers should consider impact of the above measures on tax withholding and social security contribution while processing payroll.

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Germany: Fourth covid tax relief act effective from June 19,2022

The German Parliament has enacted the fourth Covid Tax Relief Act to support German companies and it has also received approval from the state Federal Council on June 10, 2022. The Act has become legally effective from June 19, 2022, on signing by the president and publishing in the federal Law gazette.

Following are the key highlights of German fourth covid tax relief:

• Extension of carry back loss limits: The increased loss carry-back up to EUR 10 million (for individual filers and corporations) or EUR 20 million (for joint filers), will be available for the year 2022 and 2023 (which was earlier available for 2020 and 2021). However, from 2024, a loss carry-back would be restricted to EUR 1 million.
• Extension of accelerated depreciation method applicability: The applicability of accelerated depreciation method is extended to the assets acquired in 2022 (earlier available for assets acquired during 2020 and 2021). The method of depreciation would be diminishing balance method and the rate of depreciation would be 2.5 times the rate under straight-line method with maximum depreciation rate capped at 25%.
• Extension of standard deduction for work-from-home expenses: Standard deduction of EUR 5 per day (EUR 600 per year) for work from home expenses is extended to 2022 (as against earlier applicability to 2020 and 2021).
• Extension of filing deadline for tax returns: The standard income tax return filing deadlines for the annual income tax returns for 2020 to 2024 will be extended as follows:

Year	Extended Deadline (Return filing) prepared by tax advisor	Extended Deadline (Return filing) not prepared by tax advisor
2020	August 31, 2022 (earlier May 31, 2022)	October 31, 2021 (no extension)
2021	August 31, 2023 (earlier February 28, 2023)	October 31, 2022 (earlier July 31, 2022)
2022	July 31, 2024 (28 February 2024)	September 30, 2023 (earlier July 31, 2023)
2023	May 31, 2025 (earlier February 28, 2025)	August 31, 2024 (earlier July 31, 2024)
2024	April 30,2026 (earlier February 28, 2026)	July 31, 2025 (no extension)

Implication:

The businesses should assess the impact of the announced relief measures such as extension to carry back of losses, accelerated depreciation.

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Germany increases minimum wage to EUR 12 effective from October 1, 2022.

Effective from October 1, 2022, the minimum hourly wages in Germany will increase to EUR 12 (currently EUR 10.45). Due to the aforesaid increase, the minimum gross monthly salary will increase to EUR 2,080 (currently EUR 1,811).

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Germany: Implementation of EU Working Conditions Directive expected to be effective from August 1, 2022

Currently, the German law requires employers to document the essential terms and conditions of employment such as employment commencement date, workplace, working hours, remuneration, notice period etc. in writing, sign the document and provide it to employees. 

German Bundestag has recently passed a law which aims to implement EU Working Conditions Directive 2019/1152.  The German Federal Council (Bundesrat) has approved the Bill.  But it is yet to enter into force and not yet promulgated into federal law. The changes are expected to come into effect from August 1, 2022. The changed law would expand the scope of the employer’s obligation to provide documented working conditions. Documentation must also be provided for:

• End date in case of fixed term contract
• Duration of probationary/trial period, if any,
• Overtime payments, possibility of imposing overtime and its conditions
• Wages/Salary payment methods,
• Details of on-call work if such work has been agreed upon
• In case of shift system, details of rest breaks, perquisites of working in shift system
• Requirement of any training
• In case of receipt of an occupational pension through a pension institution, the name and address of that pension institution.
• The details of procedure to be followed in the event of termination of the employment
• Further obligations to provide documentation in the case of foreign assignments of employees

Additionally, failure on part of the employer to provide the employee terms and conditions of employment contract or providing of incomplete or incorrect details, may lead to fine up to EUR 2,000 per employment contract.

Implication:

Employers should review their employment documentation to ensure the compliance with the new requirements. Employer would need to prepare documentation as per new requirements for any employment initiated on or after August 1, 2022. In case of employment relationship existing prior to August 1, 2022, the revised written information must be delivered within the stipulated time.

Hong Kong

Hong Kong passes Tax Concession Bill to allow tax reduction from salary tax and profit tax

In order to implement the tax reduction proposed in the budget 2022-23, the Legislative Council of Hong Kong passed the Revenue (Tax Concessions) Bill 2022 on April 6, 2022. This allows individuals to claim 100% income tax reduction on income earned from employment (“salaries tax”) and businesses to claim 100% income tax reduction with respect to the business or trading profit (“profit tax”), subject to a cap of HKD 10,000 per annum. Individuals and businesses can claim this deduction while paying the final tax for the assessment year 2021-22. 

Hong Kong passed Employment (Amendment) Bill 2022 to address epidemic measures

On June 15, 2022, the Hong Kong Legislative Council passed the Employment (Amendment) Bill, 2022, which is effective from the same date. The Bill has introduced changes in the employment ordinance (“principal act”) mainly on account of provisions of Prevention and Control of Disease Regulation and Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation. The amendments are as follows: –

• Benefits for Employers

On failure to comply with the mandatory vaccination requirements, employers can terminate the employee.

• Benefits for Employees

Employees are entitled to sick leave and further employment cannot be terminated if employee is absent from duties on the grounds of mandatory testing, quarantine, or isolation.

Implication:

Employers are required to take note of the amendments and make suitable changes to their human resource policies.

India

India: Highlights of the latest amendments to the Companies Act, 2013

The Highlights of the latest amendments to the Companies Act, 2013, are as follows:

• From April 6, 2022, MCA declares certain details in members’ register to be not available for public inspection

• Indian Ministry of Company Affairs(‘MCA’), vide notification dated April 6, 2022, has notified the changes to the Companies (Management and Administration) Amendment Rules, 2022, which deal with the inspection of the register of the members of the company.  

The amendment inserts a proviso to Rule 14 of the Companies (Management and Administration) Rules, 2014, whereby it has been clarified that the following particulars of members as available in the register of members (section 88 of the Companies Act) and annual return (section 92 of the company’s act), are not required to be made available for public inspection: –

• Address or registered address (in case companies and limited liability partnership);
• E-mail ID;
• Unique Identification Number;
• PAN.

• India introduced mandatory security clearance requirement for curbing opportunistic investment from countries sharing land border with India.

• On June 1, 2022, the MCA notified the Companies (Appointment and Qualification of Directors) Second Amendment, Rules, 2022, which deals with the compliance requirements for individuals who are nationals of countries sharing land borders with India in order to get appointed as directors in Indian companies.

Thus, effective from June 1, 2022, individuals from China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan (countries sharing land borders with India) are obliged to obtain security clearance from the Ministry of Home Affairs (Ministry) before being appointed as directors in an Indian company. Such security clearance should be enclosed with the “Form DIR-2” (consent to act as a director) and the “Form DIR-3” (application for the Director Identification Number).  Further both these forms have been amended to include a self-declaration of such person as to the compliance to the requirement to obtain such security clearance.

• Separately, consequential amendment relating to security clearance for proposed directors where they are from countries sharing land borders with India has also been made to Form INC-32 (SPICe +) (Simplified Proforma for Incorporating Company Electronically) and Form INC-9 (Declaration by Subscribers and First Directors) vide notification dated May 20, 2022.

• MCA further vide notification dated May 4, 2022, has also amended Form SH-4 (securities transfer form) to provide for declaration regarding compliance as to the requirement of obtaining government approval under the Foreign Exchange Managed Act with respect to shares transferred to a body corporate or individual belonging to a country sharing land borders with India.

Implication:

Companies should take note of the amendment which makes certain personal information not available for public inspection considering its confidential nature.  While appointing director, the new requirement of obtaining clearance if the director belongs to a country which shares borders with India should be adhered to.

MCA issued clarification for conducting annual general meeting (“AGM”) and extra-ordinary general meeting (“EGM”) through Video Conference (“VC”) or Other Audio-Visual Means (“OAVM”) 

• Holding of Annual General Meeting through Video Conference (“VC”) or Other Audio-Visual Means (“OAVM”) for the financial year ended March 31, 2022

The Ministry of Corporate Affairs (“MCA”), via circular dated May 5, 2022, clarified that companies are allowed to conduct their AGM through VC or OVAM till December 31, 2022 (in the case of first “AGM”) and till September 30, 2022, in other cases.

• Holding of Extra-Ordinary General Meeting through Video Conference (“VC”) or Other Audio-Visual Means (“OAVM”) till December 31, 2022

The Ministry of Corporate Affairs (“MCA”), via circular dated May 5, 2022, allows companies to conduct their EGM through VC or OVAM or transact items through postal ballot till December 31, 2022. 

TDS rules on the transfer of virtual digital assets (“VDAs”) are effective from July 1, 2022

The Finance Act, 2022, introduced the new section 194S to the Income Tax Act, 1961 which provide for the withholding of taxes (tax deduction at source or TDS) on the transfer of virtual digital assets (“VDAs” such as crypto-currencies, non-fungible tokens).  Section 194S is effective from July 1, 2022.

Any person while paying the consideration to a resident for the transfer of VDA is required to withhold taxes at the rate of 1%.  However, tax deduction at source is not applicable when total value of consideration is not more than INR 10,000 during the relevant financial year.

Compliance

• Withheld taxes should be paid and the required statement in Form 26QE should be filed within 30 days following the end of the relevant month.
• Further the payer of consideration is also required to issue TDS Certificates in Form No.16E within 15 days from the due date of furnishing Form No. 26QE.

Implication:

Businesses are required to withhold taxes on transfer of VDAs and make payment to the Government during the prescribed time limit.

India notified remote working/ work from home rules for Special Economic Zone Units

India’s Ministry of Commerce and Industry, vide notification dated July 14, 2022, has introduced the Work from Home (“WFH”) provisions by adding a new rule “43A” to the Special Economic Zone’s rules, in light of demand for uniform WFH rules for all units in special economic zones. SEZ are economic areas in the country subject to separate rules which offer various incentives to units or businesses operating from such special economic zones. The purpose is to promote export and economic development.

Highlights of the amendments are outlined below: –

Applicability/Eligibility

The following categories of employees working in SEZ units are eligible for WFH:-

• Employees working in Information Technology (“IT”) or IT-enabled Services (“ITeS”);
• Employees who are temporarily unable to attend office;
• Employees travelling or working offsite.

WFH facility may be extended to a maximum of 50% of the SEZ unit’s total employees, including contractual employees, implying that half of the employees must work from the office. However, SEZ unit can make written request to Development Commissioner (“DC”) to request extension of WFH policy beyond 50% of the total employee strength of SEZ units.

Time Period

Work from home facility is provided to employees of SEZ units for a maximum period of one year from the date of receiving approval from DC, which can be extended further for another year if DC approves the extension request. 

Further, a transition period of 90 days is provided to seek approval from DC for the SEZ units whose employees are already working from home or any other remote place. 

SEZ units are required to ensure the availability of all equipment’s and secure connectivity for the purpose of WFH.

Implication:

Employers having employees in SEZ units should examine their human resource policies in light to new WFH rules and make necessary changes.  Where employees have already been provided WFH facility, necessary approval should be obtained from authorities within 90 days transition period.

Indonesia

From May 1, 2022, Indonesia implements value-added tax and income tax on crypto assets and on certain financial technology services

On March 20, 2022, the Indonesian Ministry of Finance issued regulations to implement newly enacted “Harmonized Tax Law” (“Harmonisasi Peraturan Perpajakan /HPP”). Vide Ministry of Finance regulations no. 68/PMK.03/2022 and 69/PMK.03/2022, HPP law has levied income tax and value-added tax on crypto assets and on services provided in the financial technology market from May 1, 2022, onwards. 

• From May 1, 2022, crypto assets trading is subject to VAT and income tax at the following rates: –

• VAT at the rate of 0.11% on crypto purchased value if the electronic systems provider/e-wallet provider/marketplace (through which trading is executed) is registered with “BAPPEBTI” (Commodity Futures Trading Regulatory Agency of Indonesia) and 0.22% if the electronic systems provider is not registered with BAPPEBTI.
• Income tax shall be levied at the rate of 0.1% of the gross transaction value if the electronic systems provider is registered with BAPPEBTI and 0.2% if not registered.

• From May 1, 2022, financial technology implementation is subject to VAT and income tax at the following rates: –

• VAT of 11% will be levied on services provided in the financial technology market or on the delivery of financial technology services such as providing payment system services (payment gateways, electronic money, topping up, electronic/digital wallet, transfer of funds, final settlement, pay later services, etc.), online insurance, online loans, market support services, digital financial support services, and so on. The Ministry also clarified that VAT at the rate of 11% applies to businesses’ service charges, not on the transaction value.
• Further, loan interest income received or earned by a lender through peer-to-peer lending transaction (financial technology that allows people to lend or borrow money from one another without going through a bank), is liable to withholding income tax at a rate of 15% in the case of the lender is a domestic taxpayer and 20% in the case of a foreign taxpayer, on the gross earned interest amount.

Implications

Companies operating in specified financial technology businesses should evaluate the applicability of the aforesaid provisions.

Ireland

Ireland: Gender Pay Gap reporting obligations to be effective from May 31, 2022

On July 13, 2021, the President signed the Gender Pay Gap Information Act 2021 into law. However, the law came into force only from May 31, 2022. As per the law, employers in Ireland are now obliged to report on their Gender Pay Gap (“GPG”) based on a snapshot date taken in June 2022.

• Employers having 250 or more employees are required to comply with the reporting obligation by December 31, 2022. The obligation will be extended to employers having 150 or more employees from the year 2024. It will be further extended to employers having 50 or more employees effecting from the year 2025. 

Employers have to report following key gender pay gap statistics:

• Mean and median of pay gaps and bonus gaps
• Ratio of men and women that received bonuses;
• Ratio of men and women that received benefits in kind; and
• Ratio of men and women in each of four equally sized quartiles.

Implication:

Large companies with more than 250 employees, shall take a stock of GPG situation in the organization as on June 2022 and shall take measure to reduce such gap in light of reporting obligation in December 2022. 

Italy

Italy: Ultimate Beneficial Ownership (“UBO”) register and reporting requirements comes into effect from June 9, 2022

The Ministry of Economy and Finance published Decree No. 55 of 2022 (‘MEF Decree’) dated March 11, 2022, which came into effect from June 9, 2022. The decree establishes the Register of Beneficial Owners (‘UBO Register’) and regulates the information to be disclosed regarding the ultimate beneficial ownership. The Ministry will issue implementing regulations within 60 days (i.e., till August 8, 2022) on a reporting system for the companies to submit their beneficial ownership information.

The submission of the data will be done electronically within the following timelines:

• For existing companies – Within 60 days from the date of publication of the implementing regulations 
• Changes in the beneficial ownership information – Within 30 days of the change 
• Companies incorporated after the UBO implementing regulations come into effect – Within 30 days of their registration.
• Periodic reporting – Within 12 months from the first submission being made to the Chambers of Commerce.

Companies will be subject to monetary penalties ranging between EUR 103 to EUR 1,032 for violation of the disclosure obligations.

Implication:

Companies should take note of the new compliance which would be applicable once the implementing regulations for the UBO reporting are effective.

Lithuania

Lithuania: Increase in the monthly tax-exempt income (“TEAI”) from EUR 460 to EUR 540 for the year 2022. 

Lithuania approved an increase in the tax-exempt amount of income (“TEAI”) for the calculation of personal income tax on employment income. The amended provisions entered into force on June 1, 2022, and apply from January 1, 2022, for declaring income and for calculating personal income tax for the year 2022 (and for subsequent tax periods). 

This has also resulted in a change in the formula for the calculation of personal income tax as given in the table below:

Monthly Employment Income	Monthly Tax-Exempt Amount of Income (TEAI)
Prior to the amendment	For calculation of personal income tax for the year 2022
Less than or equal to minimum monthly wage	EUR 430	EUR 540
More than minimum monthly wage, but less than EUR 1,704 (previously, EUR 1,678)	460 – 0.26 x (Monthly employment income – minimum monthly wage)	540 – 0.34 × (Monthly employment income – minimum monthly wage)
More than EUR 1,704 (previously, EUR 1,678)	400 – 0.18 × (Monthly employment income -minimum monthly wage)	400 – 0.18 × (Monthly employment income – minimum monthly wage)
More than EUR 2,864	NIL	NIL
The TEAI is also increased for people with a working capacity below 55%:
Working capacity level:
0–25%	EUR 740	EUR 870
30–55%	EUR 690	EUR 810

Implication:

Taxpayers in Lithuania should take note of the changes and accordingly, should make the tax calculations.

Malaysia

Malaysia to grant tax deduction for expenses relating to flexible work arrangements 

Since the pandemic, many companies have introduced flexible work arrangements (“FWA”), allowing flexibility in terms of working hours, working days, and workplace according to employees’ requirements. To encourage this further, Talent Corporation Malaysia (TalentCorp) (which is responsible for facilitating the FWA income deduction benefits), has announced income tax deduction for companies implementing the FWA policies for their employees.

According to guidelines, companies incorporated under the Malaysian Companies Act, 2016, are eligible to claim deduction from their taxable income for the following expenses incurred by them: –

• Consultation fee
• Cost of capacity development
• Cost of software and 
• Software subscription. 

To claim the deduction, companies need to file an application to TalentCorp with respect to the above expenses incurred between July 1, 2020, and December 31, 2022, and this benefit can be claimed twice a year (limit of RM 500,000 per year) for up to three continuous tax years from the date of receiving TalentCorp approval.

Implication:

The employers who are implementing FWA should evaluate their eligibility for the income-tax deduction for FWA expenses and make an application to TalentCorp for availing the benefit.

Malaysia: Amendments to the Employment Act 1955 to be effective from September 1, 2022

On June 23, 2022, the Deputy Minister of Human Resources announced September 1, 2022, as the effective date of the Employment (Amendment) Act 2022 (the “Amendment Act”). The amendment act introduced several significant changes to the Employment Act 1955 (the “Principal Act”). 

Highlights of the amendments are as follows: –

Amendments for the betterment of female employees:

• Raised paid maternity leave from 60 days to 98 days;
• Prohibition on the termination of a female employee while she is pregnant, unless the termination is due to misconduct or wilful breach of the employment contract, or for any other valid reasons.
• Removal of restriction on women from working at night and working ‘underground’.

Other Amendments:

• Presumption of employment relationship even in absence of written contract subject to fulfilment of certain conditions such as control of another person on work and hours, work being solely performed for benefit of another person’s business, payments at regular intervals, etc.
• Extend the applicability of the principal act to all employees, regardless of their income earned;
• Reduced maximum working hours from 48 to 45 hours;
• Introduction of paid paternity leave for married males for 7 days;
• Employees can request a flexible working arrangement if they want to change their working hours, days of work, or location;
• Employers will be required to publish notices to raise awareness about sexual harassment, and fines will be increased for employers who fail to comply with provisions relating to sexual harassment.

Implication: 

Before September 1, 2022, employers needed to update their leave policies in view of increased maternity leave and the introduction of paternity leave provisions, as well as policies for flexible working arrangements. Employers should also take note of other amendments and make suitable changes to their human resource policies.

Philippines

Philippines: Amendments to the Foreign Investments Act effective from March 2, 2022

On March 2, 2022, the Philippines made certain amendments to the Foreign Investments Act for promotion of foreign investment in order to encourage employment and growth.

Following are the key highlights of Foreign Investments Act amendments:

• Formation of Inter-Agency Investment Promotion Coordination Committee (“IIPCC”) for promoting and facilitating foreign Investment in the country.
• Philippines does not allow foreign investment in small and medium enterprises (“SEM”) having paid up capital of less than USD 200,000.  However, as per the amendment, now foreign nationals can invest in SMEs having the minimum capital of USD 100,000 provided the following conditions are met:

• The company is engaged in advanced technology sector
• The company is approved as start-up enabler
• The company hires at least 15 Filipino employees (earlier the requirement was hiring at least 50 Filipino employees) and most of its employees are Filipino.

• A programme for understudy or skill development that helps Filipino workers must be developed by foreign companies which employ foreign nationals and take benefit of fiscal incentives. This will be monitored by Department of Labor and Employment. 
• Businesses engaged in export activity must comply with the export requirements specified by the   Corporate Recovery and Tax Incentives for Enterprises (“CREATE”) Act for availing tax incentives subject to the condition that the business exports at least 70% of its output.

Implication:

Businesses shall evaluate the amendments to Foreign Investment Law to identify and take advantage of new opportunities.

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Philippines: Increase in Philhealth contribution rate effective from January 1, 2022

On May 11, 2022, the Philippine Health Insurance Corporation (PhilHealth) released the adjusted premium rate for PhilHealth members for the financial year 2022. Below is the detailed contribution schedule for the financial year 2022:

Year	Monthly Basic Salary (in pesos)	Premium Rate	Monthly Premium (in pesos)
2022	Up to 10,000.00	4%	400
From 10,000.01 to 79,999.99	400 to 3,200
From 80,000.00 and above	3,200

 The revised premium rate will be effective from January 2022.

Implication:

Employers shall take note of the increased Philhealth contribution rate and align their payroll processes accordingly. Employers that have already paid their contributions at the rate of 3% for the periods prior to June 2022, are advised to create the relevant Statement of premium account in order to make up the 1 % difference in remittances until December 31, 2022.

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Poland

Poland: Revision in Personal Income Tax (“PIT”) Regulations 

On January 1, 2022, a tax reform programme known as “Polish Deal” came into force.  The Act of June 9, 2022 (published in Polish Gazette on June 15, 2022), amends the provisions from January 2022 of the Polish Deal, covering changes in the Personal Income Tax Act and certain other acts. 

The key amendments are as follows:

• Personal income tax rate is reduced from 17% to 12% for the year 2022; new thresholds are as follows: 

Income Amount	Tax Rate
Up to PLN 30,000	0%
From PLN 30,001 to 120,000	12% (previously 17%)
From PLN 120,001 onwards	PLN 10,800 + 32% on the excess over PLN 120,000 during the year

• The “Middle-class relief” was introduced by the Polish Deal for taxpayers having employment income and certain business income in the range of PLN 68,412 to PLN 133,692 annually. As per the amended Polish Deal, this relief has been revoked effective from July 1, 2022, in respect of income earned from January 1, 2022.
• A deduction of PLN 1,500 per year for single parents bringing up the children which was introduced effective from January 1, 2022, has been abolished by the amended Polish Deal and the provision prevailing prior to January 1, 2022, have been restored, namely, joint settlement with a child. 
• The Polish Deal introduced tax exemption in respect of employment income and certain business income up to PLN 85,528 per year for young workers, working pensioners (women over 60 and men over 65), and families of 4 plus taxpayers (i.e., for parents with at least four children and available to each parent separately, if other conditions are met). Under the amended Polish Deal, the exemption is extended to maternity benefits.  
• The Polish Deal made the health insurance contribution non-deductible from income tax. Under the amended Polish Deal, it is possible only for the entrepreneurs (on a flat tax, lump sum, and tax card) to deduct certain health contributions.
• The limit of earnings for the child is increased from PLN 3,089 to PLN 16,061 without losing tax preference from parents. 

Implication:

The employers should consider the revised tax rates and benefits while calculating the tax liability of the employees.

Russia

Russia increases the monthly minimum wages from RUB 13,890 to RUB 15,279 with effect from June 1, 2022.

Effective from June 1, 2022, Russia increases its minimum wages from RUB 13,890 per month to RUB 15,279 per month.

Implication:

Employers in Russia must consider the revised minimum monthly wages rate and align their payroll processes. The minimum wage value is used for various tax purposes, including national insurance contributions on the portion of wages that is above the minimum wage for Small and Medium Enterprises (“SMEs”).

Serbia

Serbian Government mandates E-invoicing System with implementation in phases; starting with G2G, B2G and G2B e-invoicing till July 1, 2022, and B2B invoicing from January 1, 2023

Serbia introduced mandatory e-invoicing vide law no. 44/2021 passed on  April 29, 2021, and the first phase of implementation started in May 2022. The Serbian name for the national e-invoicing system is Sistem E-Faktura, “SEF”. The portal is used for sending, receiving, capturing, processing, and storing electronic invoices. 

The implementation phases are as follows: 

Phase No	Effective Date	Applicable to	Details
1	May 1, 2022	Government to Government (“G2G”) invoices and Businesses to Government invoices (“B2G”)	All businesses (i.e., public, and private sector companies) are required to issue e-invoices to public authorities/ government agencies.All government agencies are required to issue e-invoices to other government agencies.
2	July 1, 2022	Government to Business invoices (“G2B”)	All government agencies are required to send e-invoices to businesses (i.e., private sector companies).
3	January 1, 2023	Business to Business invoices (“B2B”)	All businesses (i.e., private sector companies) will be required to issue e-invoices.

The private companies are required to store e- invoices issued or received for a minimum period of 10 years either in the e-invoicing system or in an information exchange system used by the companies. 

Implication:

Companies must ensure to adopt e-invoicing within the given timelines.

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Serbia increases the net minimum wage for 2022

The Serbian Government through its Official Gazette no. 87/2021 of September 10, 2021, increased the national minimum wages (net) for the year 2022 with effect from January 1, 2022, from RSD 183.93 per working hour to RSD 201.22 per working hour. This applies to all workers in Serbia including locally hired foreign nationals in the country.

Implication: 

Employers must consider the revised minimum wage rate and align their payroll processes.

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Singapore

Singaporean government increased payout for “Progressive Wage Credit Scheme” (“PWCS”)

Progressive Wage Credit Scheme (“PWCS”) was primarily introduced in budget 2022 in order to co-fund employers for progressive wage increases for employees earning lower wages (below SGD 3,000 per month). Vide announcement dated June 21, 2022, the government has further increased the co-funding contribution rate for the first-year pay-out while keeping other year’s pay-out unchanged.  Please refer to the table below: 

Year	Pay-out period	Employees with gross monthly wages up to SGD 2,500	Employees with gross monthly wages of more than SGD 2,500 and up to SGD 3,000
2022	Q1 2023	75%(50% as per budget 2022)	45%(30% as per budget 2022)
2023	Q1 2024	50%	30%
2024	Q1 2025	30%	15%
2025	Q1 2026	30%	–
2026	Q1 2027	15%	–

Singapore introduces timelines for updating the register of “nominee directors” and “foreign company members”

The Singaporean Companies Act 1967 was recently amended by the Corporate Registers (Miscellaneous Amendments) Act 2022. The amendments came into force on May 30, 2022, whereby the new timeline for updating the register of nominee directors and register of members of foreign companies are as follows:

• Local companies are now required to update the “Register of Nominee Directors” within seven days after being notified about any changes to the particulars, such as an appointment or resignation, etc. (previously no timeline for the update was provided for).
• Foreign companies are required to update the “Register of Members” within 30 days after being notified about any changes (no timeline for the update was previously provided for).

Implication:

Companies should take note of new timelines for updation of specified registers and comply with them in time.

Sweden

Sweden: Changes in Employment Protection Act 

The amendments to Swedish Employment Protection Act are enacted, which include some provisions of ‘EU Transparent and Predictable Working Conditions Directive (2019/1152)’. Most of the amendments entered into force on June 30, 2022 and will take effect from October 1, 2022.

The changes include:

• The employers are required to notify the employees about certain basic employment terms (viz. employer name, start date, work location, job profile, working hours, remuneration, probation period, notice period, etc.) within a week from the employment start date.

• In case of any modifications in the employment contract terms, the employer needs to immediately notify changes in a template form to the employee.
• For indefinite employment contracts, the probation period cannot exceed 6 months, whereas for fixed term contracts, the probation period should be proportionate to the duration of the contract.
• The employee can take up parallel/another employment with other employer outside the working hours established with the current employer. However, the employer can put restrictions for non-compete, protection of business confidentiality, etc.

• Fixed term contracts are replaced with a new employment form viz. “special fixed-term employment contracts” which get converted into indefinite employment contracts where the employee has been employed for more than twelve months during a five-year period (previously 24 months) and in certain other situations. 
• In case of dismissal where the employee has disputed the termination of employment and requested the termination to be declared invalid, the employment would no longer continue during the course of a dispute. Hence, the employer is not required to pay salary costs or other employment benefits during the ongoing dispute. If the Court declares that the termination was invalid, the employee is entitled to compensation for salary and other employment benefits for the time the dispute was ongoing.

Implication:

The employers will need to review the employment contracts executed with their employees and modify, if necessary, in accordance with the amendments. Further, the employers will need to adhere to other changes made in the act.

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Sweden: VAT registration exemption threshold increased to SEK 80,000 from SEK 30,000 with effect from July 1, 2022.

Sweden increased turnover limit for Value Added Tax (“VAT”) registration exemption threshold to SEK 80,000 per year from SEK 30,000 per year with effect from July 1, 2022.

Implication:

Businesses having yearly turnover below SEK 80,000 are exempt from VAT registration, however, they can voluntarily opt to register for VAT.

Taiwan

Taiwan clarifies online traders’ business tax registration and payment rules 

Taiwan has earlier issued “tax registration rules” for online traders selling goods and services through online platforms, applications or any other electronic means, which have been effective from March 1, 2022. Now, the Ministry of Finance, vide notice dated March 31, 2022, has clarified the registration and tax payment requirements and rules for online traders as follows: –

For Individuals:

Individuals selling goods and services through online platforms whose average monthly sales of goods and services do not exceed TWD 80,000 and TWD 40,000, respectively (minimum taxable sales amount), are not required to apply for business tax registration. However, if sales exceed the prescribed thresholds, then individuals are required to apply for tax registration with the tax department.

For Businesses:

• Businesses that have already registered for tax and have an average monthly sale of less than TWD 200,000 are required to pay the business tax at 1% of monthly sales amount after receiving a notice on a quarterly basis from the tax department.
• Businesses that have already registered for tax and have an average monthly sale of more than TWD 200,000 are mandated to issue pre-printed invoices viz. government uniform invoices (“GUI”) and pay the business tax on a bimonthly basis (within 15 days following the end of the taxable period).  

Implication: –

Individuals and e-commerce/online trading companies to which tax registration rules are applicable must comply with the tax registration and payment requirements as per given timeline.

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Taiwan has raised the salaries subject to withholding taxes for non-resident taxpayers from January 1, 2022.

Effective from January 1, 2022, Taiwan has raised the minimum monthly wage for the year 2022 from TWD 24,000 to TWD 25,250. Consequently, benchmark for non-resident taxpayers (individuals) salaries subject to withholding taxes have been increased to TWD 37,875 (1.5 times the minimum monthly wages). 

Therefore, non-resident taxpayers, whose salaries are up to the threshold of TWD 37,875, are liable to withholding taxes at the rate of 6% per month, while salaries beyond the threshold are liable for withholding at the higher rate of 18%.

Implication: –

Companies should adjust tax withholding for salaries paid to their non-resident taxpayers considering new benchmark.

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Thailand

Thailand’s Personal Data Protection Act is effective from June 1, 2022

On June 1, 2022, Thailand’s Personal Data Protection Act (“PDPA”) came into force which was originally enacted in May 2019. Most of the key provisions of the PDPA are highly influenced by the European Union’s (“EU”) General Data Protection Regulation (“GDPR”).

Highlights of PDPA

• Applicability

This PDPA applies to all legal entities including small or medium-sized businesses in Thailand or abroad that are involved in controlling or processing of personal data of individuals in Thailand. The PDPA recognizes certain rights of data subjects such as right to be informed, right to access, right to rectify and update data, etc.

• The concept of prior information and explicit consent is introduced.

The PDPA establishes a legal framework for the collection, storage, processing, and dissemination of personal or sensitive information by controllers and processors. Prior to collecting personal data, the controller must notify the “data subject or individuals” about the purpose, retention period and other key information, and further obtain their consent for data processing accordingly.

In the case of sensitive personal data (such as racial, ethnic origin, political opinions, cults, religion, disability etc.) which may affect the data subject, explicit consent is required for the collection, use or disclosure of such information. However, exemptions are given in cases of public interest, contractual obligations, vital interest, or legal compliance. 

• Mandatory notifications for data breaches 

Similar to provisions of GDPR, data Controller, are required to notify the data protection authority of any personal data breach.

• Penalties

The law also provides for penalties for breaches up to THB 5,000,000, including imprisonment for up to a year.

Implication:

Effective June 1, 2022, companies need to evaluate the implications and frame a policy for the protection of employees’ personal information so as to ensure compliance with the new PDPA.

Shan & Co © (Nucleus is an affiliate of Shan & Co)