Global Updates October 2024

The Argentine Government passed Law No 27.742 – Bases and starting points for the freedom of Argentines’ (“Ley Bases”) on June 27, 2024, which was published in the official gazette and became effective on July 8, 2024. The law introduces several labour reforms in governing the employment relationships as prescribed under ‘Law No. 20.744 – Employment Contract Law.’ The Argentine Government also passed a Decree 847/2024 regulating certain aspects of the Law No. 27.742, which came into effect on September 26, 2024.

The reforms are as under:

Simplification of registration of the employment contracts: The process for registering employment contracts is simplified by enabling the employers to register the employees with Revenue Service of Argentina (“AFIP”) electronically which includes registration of the employment contracts. Further, the employers must register the employees at the start of employment contract and not after completion of the probationary period.

Increase in probationary period: The reforms have increased the duration of the probationary period from 3 to 6 months, which can be further extended to 8 months through collective bargaining agreements for companies with 6 to 100 employees. Further, for companies having up to 5 employees, the probationary period can be extended up to 1 year. The increased probationary period is applicable for employment contracts entered into on or after July 9, 2024. There are some prerequisites which need to be followed during the probationary period such as payment of social security contributions, sickness or accident-related benefits, employment contracts should be registered at the start of the employment etc.

Abolishment of labor fines related to employment contract: The new law eliminates employment contract related fines resulting from faulty registration of employment or resulting from forced claims made for severance payment, or where the employers fail to deliver the work certificates to employees.

Labor amnesty for defective contracts: The labour amnesty can be availed in respect of the employment relationships initiated prior to the enactment of the Law No. 27.742 and which are in force at the time of making application for the said amnesty benefit. The amnesty applies to obligations accrued up to July 31, 2024, and in respect to unregistered employment relationships or poorly registered relationships (i.e., defective registration of entry date of contract or salary particulars). The waiver for the social security regime is between 70-90% (depending upon the size of the organization viz. small, medium sized, etc.), 100% waiver for National Health Insurance Regime and the Occupational Hazards Regime and full waiver for any criminal sanctions imposed.

Severance compensation to be replaced by a severance/termination fund: Through collective bargaining agreements, employers and employees can agree to replace severance compensation payments with a termination/severance fund. Further, the employers can also opt for a private system, at their own cost, for covering severance compensation payments or agreed sums between the employer and employee in case of mutual termination.

Implication:

Employers need to make note of these changes introduced by the reforms related to employment relationships.

Argentina: The minimum and maximum basis for calculating employee social security contributions increased to a monthly salary of ARS 82,287.12 and ARS 2,674,292.72 respectively from October 1, 2024.

The Argentine National Social Security Administration (“ANSES”) through Resolution No.798/2024 dated September 19, 2024, effective from October 1, 2024, increased the minimum basis for an employee’s social security contributions from ARS 78,993.11 to ARS 82,287.12, and maximum basis from ARS 2,567,238.86 to ARS 2,674,292.72. These bases are used for the computation of employees’ portion of social security contributions.

Implication:

Companies will need to compute employees’ social security contributions according to the latest base values published.

Australia

Australia: New payday superannuation reform effective starting July 1, 2026.

The Australian Government announced in the Budget 2023-24, plans for modifying the Superannuation Guarantee (“SG”) scheme through the ‘Payday Super’ reform, which is part of the broader ‘Securing Australians’ Superannuation Package’. The new reform will be effective from July 1, 2026.

Superannuation Fund is a mandatory retirement savings system in Australia, where the employers contribute as a percentage of an employee’s earnings to secure income for their retirement.

The reform and its measures are yet to become a law. The authorities will engage with industry and stakeholders on the proposed changes. On September 18, 2024, the government announced further details by releasing a fact sheet, including the following:

Effective starting July 1, 2026, SG contributions will align with salary payments, requiring employers to make SG contributions to an employee’s nominated super fund within seven calendar days from the payment of the employee’s regular salaries. This will replace the current SG system of making contributions at the end of each quarter.

Single Touch Payroll (“STP”) reporting will improve real-time monitoring of payments of SG contributions. STP is a reporting system where employers send tax and superannuation information to the ATO every payday. As employers will now have to pay super along with wages (within seven days), STP will help the ATO keep track of whether these payments are being made on time.
The penalties are updated for employers in respect of failure to comply with the new SG requirement. The employers are liable for the SG charge for late payments, which currently includes the SG shortfall based on total salary and wages, along with a nominal interest charge.

Under the new framework, SG charge will include the SG shortfall, daily interest on the SG shortfall and an additional charge for the cost of enforcement, which will be a percentage of the SG shortfall amount. The additional charge will be reduced if the employers voluntarily disclose their failure in making the timely contribution and address the shortfall. So, the revised SG charge will ensure that employees are fully compensated for any delay in receiving their super and incentivise employers to disclose unpaid SG contributions in a timely manner.

Implication:

Employers must track further developments and adopt systems/ policies to ensure timely payment of SG contributions alongside salary payments to avoid penalties and comply with the new regulations effective starting July 1, 2026.

Australia: Introduces additional payment to parents as a contribution to their superannuation fund under the Paid Parental Leave (“PPL”) Scheme effective starting July 1, 2025.

The ‘Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024’ has been passed by parliament and received royal assent on October 1, 2024. This legislation is designed to enhance the existing Paid Parental Leave (“PPL”) scheme in Australia, which supports eligible working parents by providing financial assistance after the birth or adoption of a child.

The current PPL scheme is designed to support eligible working parents who take time off from work after the birth or adoption of a child. The scheme is available to birth mothers, adopting parents, and partners, including fathers or the partners of the birth mother or adopting parent. Currently, the PPL scheme provides families financial assistance of up to 22 weeks of wage payment calculated considering the national minimum wage. (AUD 915.90 per week for 2024).

Effective starting July 1, 2025, parents of children born or adopted on or after this date will receive an additional 12% of the PPL scheme payment as a contribution to their superannuation fund. The contribution will be automatically deposited into the superannuation accounts of the eligible parents.

Additionally following the amendments, the payment period will increase from 22 weeks to 24 weeks for children born or adopted on or after this date, and further increased to 26 weeks for those born or adopted on or after July 1, 2026. The Australian Taxation Office (“ATO”) will calculate and disburse these payments annually, ensuring individuals do not need to claim these superannuation contributions separately.

Australia: Australia introduces mandatory climate reporting requirements effective starting January 1, 2025, for large companies as specified.

The Australia’s Parliament passed the ‘Treasury Laws Amendment (“Financial Market Infrastructure and Other Measures”) Bill 2024’ on August 22, 2024, mandating climate-related financial disclosures reporting for large companies, starting from 2025. The Bill received royal assent on September 17, 2024.

Mandatory climate reporting will apply to entities required to prepare annual financial reports under the ‘Corporations Act 2001’, with these disclosures included in a Sustainability Report following Australian Sustainability Reporting Standards (“ASRS”).

Reporting entities which meet two out of three of the following criteria will be included:

Consolidated revenue for the fiscal year;
Consolidated gross assets at the end of the fiscal year;
Full-time equivalent employees at the end of the fiscal year.

The reporting requirements will commence as below:

In January 2025, will apply to public and large proprietary companies that meet specific size thresholds, including companies with more than 500 employees or AUD 500 million in revenue, or AUD 1 billion in assets;
Medium-sized companies i.e. meeting the specified thresholds will begin reporting in July 2026;
Smaller companies i.e. meeting the specified thresholds follow in July 2027;
Not-for-profit entities that meet these thresholds are also included, though charities and some public authorities are exempt from the regime.

The Sustainability Report of the entity must include a climate statement for the relevant year with necessary notes; statements as prescribed by the Regulations for the relevant year; and directors’ declaration of the compliance of such statements with the Corporations Act and relevant sustainability standards.

Core disclosures in the climate statement include governance processes for managing climate-related risks, strategies for addressing these risks, and risk management practices. They also cover emissions data, financial impacts of climate-related risks on cash flows and asset values, and metrics for tracking progress towards climate targets.

Implication:

Applicable companies should comply with the new mandatory climate reporting requirements to ensure transparency and accountability in their sustainability practices.

Belgium

Belgium: New regulations on workplace ergonomics and prevention of musculoskeletal disorders are effective from May 25, 2024.

On May 15, 2024, Belgium released a royal decree laying down new regulations related to workplace ergonomics and the prevention of musculoskeletal disorders (“MSDs”). The decree amends the Code on Well-being at Work (“the code”) to address issues among workers due to Musculoskeletal Disorders (“MSDs”). New regulations were issued through amendment to the Book VIII and are effective from May 25, 2024.

The key provisions of the regulations are as follows:

Employers must consider ergonomics when setting up new workstations or altering the existing ones, to prevent MSDs.

Employers are required to conduct a risk analysis for workplace for identifying musculoskeletal issues, taking into account various risk factors such as repetitive movements, the duration and frequency of tasks, and working postures, etc. Employers should update the risk analysis regularly at least once a year or also when changes occur that could expose the employees to musculoskeletal risks. An internal prevention advisor and in certain cases, prevention advisor- ergonomist should be involved in the analysis.

Employers then need to undertake preventive measures to reduce musculoskeletal risks at work based on the risk analysis. Employes are also required to monitor and update these prevention measures regularly.

The results of the risk analysis and preventive measures must form part of risk management system of the company.

Employers are required to provide information and training regarding musculoskeletal risks at work to the employees and the committee for prevention and protection at work. Where such committee does not exist, the information and training should also be provided to the trade union representative.

Employers must take the necessary actions to ensure that employees exposed to musculoskeletal risks at work undergo appropriate health checkups.

In addition to the above principles, four new concepts have been added in the code namely ergonomics at work, musculoskeletal disorders (“MSD”), musculoskeletal risks at work and prevention advisor-ergonomists.

Implication:

Every employer must comply with the requirements of the new principles and make necessary changes in the internal policies to adopt the provisions of the code.

Belgium: Two new royal decrees introduced to amend transfer pricing forms and mandate filing of transfer pricing study and agreements as part of local file.

Belgium issued two new decrees on June 16, 2024, amending transfer pricing forms, specifically the Local File (“Form 275.LF”) and the Master File (“Form 275.MF”). Additionally, new information and filing requirements have been added for the country-by-country notification (“Form 275.CBC.NOT”). These revised forms will be applicable from the financial year starting on or after January 1, 2025.

The significant changes in the forms are as given below:

Local File Form (“275.LF”): The form mostly retains the previous format and content, while adding the following new requirements:

To report a detailed information of intercompany transactions for each business unit with cross-border transactions over EUR 1 million separately for each country and each counterparty instead of reporting them together.
To submit the transfer pricing study, methodology and principles in a readable PDF format in accordance with OECD Guidelines. Earlier, the taxpayer was required to simply confirm the availability of such methodology, principle and TP study.
Companies previously only needed to mention the existence of framework agreements or model contracts for intercompany transactions, but now, if such agreements exist, they must be submitted with the form in a readable PDF format.
Certain additional information is required to be given such as listing the Tax Identification Number for competitors of the Belgian entity and its foreign permanent establishment (“PE”), information on the countries involved in cost contribution agreements, APAs, rulings, and in-house (re)insurance policies.

Master File form (“275.MF”): The new model form retains the same format as the old one, but the following additional information is required as evident from notes to the form:

Analytical framework for the group’s value chain and functional analysis along with a comparison and alignment with transfer pricing outcomes;
Detailed analysis of the DEMPE functions for intangibles; and
Descriptive information of the financial policies and transactions.

Country-by-Country reporting notification (“275.CBC.NOT”): Companies now need to specify if the notification is a first notification, a modification, or a termination of the obligation to file notification. It requires filing of notification when obligation to file CbCR notification is terminated.

Implication:

Belgian taxpayers who are subject to transfer pricing documentation and CbC reporting should review the changes and update their systems to arrange for submission of additional information/ documents.

Belgium: Deadline for quarterly VAT return changed from 20th to 25th of the following month.

Belgian VAT code was amended vide Law of March 12, 2024, which will be effective from January 2025. These amendments were originally set to take effect on January 1, 2024, but were deferred to 2025.

The following are the key amendments:

Deadline for Quarterly Taxpayers: Beginning January 1, 2025, quarterly VAT returns will be due by the 25^th of the following month, providing taxpayers with an additional five days. The deadline for monthly taxpayers remains unchanged at the 20^th. The first quarterly return impacted by this change will be for Q4 2024, which will be due on January 25, 2025.

Substitute VAT Returns: If a taxpayer fails to submit VAT return and it remains not submitted for a period of 3 months from the original due date, the tax authorities will issue an assessment of the VAT due as “substitute VAT return”, which will be calculated based on the highest amount of VAT liability declared in previous 12 returns, subject to minimum liability of EUR 2,100. Taxpayers will have one month time to submit the correct return, failing which the estimation as per the substitute return will become final. In that case, the only option remaining with the taxpayer is to contest it through an official appeal.

Changes to refund requests: Currently, taxpayers can request the full outstanding refund amount, including accumulated VAT credits and carry-forward credits, through the VAT return form. Beginning in January 2025, taxpayers will be able to request refunds for the current period via the VAT return, while carry-forward credits can be requested through their online account. Refunds can now be requested monthly without prior authorization from VAT authorities.

Implication:

Taxpayer filing quarterly VAT return should take note of new deadline for VAT return. Taxpayers should also note the new provision regarding substitute VAT return to be issued by tax authorities estimating the liability in case of failure to file VAT return.

Brazil

Brazil: Brazilian Data Protection Authority publishes regulation governing international data transfer.

The Brazilian Data Protection Authority (“ANPD”) on August 23, 2024, published Resolution CD/ANPD No. 19/2024 (“Regulation”), containing comprehensive regulation governing international data transfers and Standard Contractual Clauses (“SCCs”). The Regulation is effective from August 23, 2024, and the covered entities have a twelve-month period (until August 22, 2025) to incorporate the ANPD-approved SCCs into their data transfer agreements.

The Regulation provides guidelines related to international data transfer mechanisms permitted in Article 33 of the Brazilian General Data Protection Law (Law No. 13,709 of 2018, the “LGPD”) requiring specific ANPD guidance, such as adequacy decisions, specific contractual clauses, SCCs, and Binding Corporate Rules (“BCRs”).

The Regulation contains procedures and rules for handling international data transfers while maintaining protection. The key provisions are as follows:

The Regulation applies to processing data within Brazil, offering services to or processing data of individuals in Brazil, or data collected in Brazil.
The ‘international transfer’ includes transmission, sharing, or granting of access to personal data. It broadens the scope to include data shared between foreign countries if relating to Brazilian individuals.
The Regulation provides that both the data controller and data processor are responsible for ensuring the compliance.
Further, the international data transfer must be for legitimate and specific purposes as provided in the LGPD and must be following one of the valid mechanisms for international data transfers mentioned above.
The Regulation provides criteria for ANPD for assessing data protection levels and procedures for adopting adequacy decisions in case of foreign country/ international organization. ANPD has not issued any adequacy decision so far.
Annex II to the Regulation contains the approved SCCs with minimum guarantees for international transfers. As mentioned above, the data processors should within 12 months from the publication date of this Regulation modify their existing executed contracts with the SCCs given in this Regulation. The SCCs mentioned in the Regulation need to be adopted/used without any deviations to safeguard the validity of the international transfer of personal data.
Data Controllers need to get specific contractual clauses, if any, approved by the ANPD if the standard SCCs are not applicable, because of specific circumstances of fact or law.
For intra-group transfers of personal data, BCRs can be used. The BCRs need to be submitted to the ANPD for approval.
Further, the data controllers must provide to the data subjects, within 15 days upon request, the clauses which are used to process international data transfers of their personal data.
The ANPD needs to publish approved specific contractual clauses and BCRs on its website, stating the respective applicant, as well as any other information.

Implication:

The companies should take note of this Regulation and adopt its provisions while carrying out international data transfers.

Canada

Canada: Global Minimum Tax introduced through Global Minimum Taxation Act.

On June 20, 2024, Federal ‘Bill C-69’ received royal assent which includes certain provisions of the Budget (tabled in Parliament on April 16, 2024) and the legislation to implement the Global Minimum Tax (“GMT”) regime in Canada. The legislated act is known as ‘Global Minimum Tax Act.’

The GMT Act introduces a 15% global minimum tax for companies that are part of Multinational Enterprises (“MNE”) and domestic groups with consolidated revenue of not less than EUR 750 million in at least two of the four immediately preceding fiscal years. The GMT provisions are generally effective for fiscal years beginning on or after December 31, 2023, and the first returns and potential taxes are due by June 30, 2026.

The GMT ensures that large MNE groups pay minimum Effective Tax Rate (“ETR”) of 15% on income in every country they operate. Accordingly, qualifying MNE groups are required to compute their ETR in each jurisdiction where they have a subsidiary entity or Permanent Establishment (“PE”). If the ETR is below 15% in that jurisdiction, a top-up tax will be imposed to raise it to 15%. Further, the top-up tax may be reduced by a substance-based income exclusion, which is calculated based on the payroll costs and net book value of tangible assets located in the jurisdiction.

The GMT provisions include the following:

Qualified Domestic Top-up Tax (“QDTT”) – This domestic minimum tax of 15% will apply to qualifying constituent entities of an MNE Group in Canada (i.e., Canadian tax residents or whose activities constitute a PE in Canada), if their foreign operations (i.e., in the low-tax jurisdiction where they are located) have an effective tax rate below 15%. The QDTT applies before the Income Inclusion Rule (“IIR”) and Undertaxed Payments Rule (“UTPR”) and either the QDTT applies, or foreign countries can collect top up tax under the IIR or UTPR.

The Act also provides for additional charging mechanism, such as IIR and UTPR, which will apply in certain specific circumstances from the following years:

The IIR applies to financial years commencing on or after December 31, 2023.
The UTPR will apply to financial years commencing on or after December 31, 2024. UTPR generally applies, where the ultimate parent entity (“UPE”) in the group is located in a country that has not introduced the GMT regime and hence, cannot apply QDTT.

The GMT Act includes specific safe harbour provisions giving temporary or permanent relief under certain conditions. When a safe harbour rule applies, an election must be made as part of the annual Global Anti-Base Erosion (“GloBE”) information returns. If the return filing and notification obligations apply in Canada, then the UPE needs to file the GIR return and submit notification with Canada Revenue Agency (“CRA”) within 18 months from financial year-end for the first year and thereafter within 15 months from the end of financial year.

Implication:

Businesses should take note of the changes and comply with them accordingly.

Chile

Chile: Minimum percentage of workers with disabilities to be hired by the companies having 100 or more employees increased from 1% to 2%.

Chilean Government published Law No 21,690 of 2024on August 24, 2024, making an amendment to the labour code related to labor inclusion for employees with disability and disability pensioners. Accordingly, effective from January 1, 2025, any company whether in private or public domain and employing 100 or more employees is required to hire persons with disabilities to the extent of minimum 2% (previously, 1%) of the total employee strength. The amended law also provides for fines for non-compliance in hiring every month and for each worker with a disability who should have been hired.

Implication:

Employers are required to take a note of the new provisions and comply with it as applicable.

Chile: Chile amended Data Protection Law.

On August 26, 2024, Chilean National Congress approved amendments to the current Personal Data Protection Law 1999. The law will come into force after one year from its enactment/ publication in the official gazette. The amended law is based on the European Union (“EU”) GDPR principles and provides new obligations for data controllers and additional rights made available to data subjects.

The key highlights of the bill are listed below:

The scope of applicability of data protection law is clearly defined for data controllers, data processors, data subjects irrespective of their locations whether within or outside Chile.

There will be a Data Protection Agency for overall monitoring, implementation of the law and there will also be a public body under the Agency viz. ‘National Registry of Sanctions and Compliance’ maintaining a register for the sanctions imposed on the data controllers.

As per the amended provisions, consent remains a fundamental or valid legal basis for personal data processing, but it establishes that consent must be explicit, informed, and revocable. Further, the amended law provides for new legal bases for data processing in line with the GDPR, which include compliance with legal obligations, the execution of contracts with the data subject, or the legitimate interest of the controller, provided that no fundamental right of data subject is violated, etc.

When there is a high risk involved in processing of personal data, especially large amounts of personal data, the impact assessment is required to be carried out before processing of such data. After carrying out the impact assessment, if it indicates more risk, the controller may seek the authorities’ suggestions for the same.

The amended law permits the cross-border transfer of personal data, where transfer is to a person or entity in an approved country (i.e., as defined by the Agency) providing a legal framework for adequate level of data protection; or transfer is under contractual clauses, binding corporate rules, other legal instruments providing adequate guarantees of personal data protection.

The amended law provides for stringent penalties, fines based on the severity of breach or infringements, which are as follows:

In cases of minor infringements like failure to adequately inform data subjects about data processing, a fine of UTM 5,000 may be imposed. Unidad Tributaria Mensual (“UTM”) is monthly tax unit value in Chile which is indexed to inflation and value is published regularly on the tax website (approx. 1 UTM = USD 66).
In cases of serious infringements like not having legitimate basis to process personal data, a fine of UTM 10,000 may be imposed.
In cases of very serious infringements like fraudulent use of personal data without the consent of data subject/ owner, a fine of UTM 20,000 may be imposed. If the offences are repeated, then a fine of up to three times of regular amount may be imposed. If the very serious infringements are repeated within 24 months, the authorities may also suspend controllers’ data processing for 20 days.

Under the news law, data controllers may implement prevention model for violations, consisting of a compliance program which must at least include the following:

Appointment of Data Protection Officer (“DPO”);
Types of data processed and the processes increasing potential risks of violations; and
Procedure of internal, external reporting for security breaches and internal administrative mechanism in cases of failures in complying with the security and preventive measures.

Implication:

Employers are required to take note of the new provisions, take necessary steps to implement it by making changes in the internal policies, processes, agreements, etc.

China

China: Retirement age to be increased with effect starting January 1, 2025.

The Standing Committee of the National People’s Congress of China (“the Standing Committee”) has passed the policy decision to gradually increase the retirement age effective on January 1, 2025, spread over 15 years.

Further the Standing Committee has approved the “Measures of the State Council on Gradually Delaying the Statutory Retirement Age” (measures on delaying the statutory retirement age) and released a chart detailing the specific retirement age for individuals at different ages along with the measures.

The following are the key highlights of the measures on delaying the statutory retirement age:

The retirement age will be gradually raised from 60 to 63, from 55 to 58 and from 50 to 55 for men, women who qualify as manager and women with non-managerial roles, respectively. For the first two categories, the increase will happen gradually by one month for every four months period starting from January 1, 2025. For the third category of women with non-managerial jobs, the retirement age will increase by 1 month for every two months starting on January 1, 2025.

The employees will be allowed to voluntarily retire up to three years in advance after reaching the minimum age for pension contributions, but they cannot retire earlier than the existing statutory retirement age (60, 55 and 50). The employees can defer their retirement to a later date if they come to an agreement with their employers, although this delay cannot be more than three years.

To qualify for pension scheme benefits, the minimum contribution period for pension schemes will increase from 15 years (existing) to 20 years, effective from 2030. This will happen gradually by an increase of 6 months every year till the period is increased to 20 years.

The employees who are less than one year away from the statutory retirement age will continue to receive the unemployment insurance benefits till their retirement. Further, the unemployment insurance benefits will cover the contributions to the pension scheme even during the extended retirement age.

Implication:

Employers should closely monitor their employees’ applicable statutory retirement age and update their policies. The measures will have an immediate impact on employees nearing retirement, particularly those expected to retire in 2025.

China: Network Data Regulations governing data security matters effective starting January 1, 2025.

The Chinese Government has officially released the ‘Regulation for the Administration of Network Data Security’ (“Network Data Regulation”) on September 30, 2024, which will be effective from January 1, 2025. The Regulation is based on and further supplements the three laws which govern data privacy and its security namely ‘The Cybersecurity Law’ ‘The Personal Information Protection Law’, and ‘The Data Security Law’. It introduces stricter informed consent requirements, clearer definitions and obligations for ‘important data’ and also expands contractual requirements for sharing of data between data handlers.

The key highlights are as under:

Applicability: The regulations apply to domestic entities which process data. Further, they also apply to foreign entities if they process data related to individuals and entities in China, specifically when they process ‘important data’ or analyze behavior while offering products and services.

Complying with requirements of important data processors: The Regulations introduce new requirements for data processors handling personal information of more than 10 million or those handling important data. The Regulation defines ‘important data’ as the data relating to national security, economic operations, public health and safety or data related to specific regions. Such data handlers are required to conduct risk assessments before providing, jointly processing or entrusting the processing of data. They also are required to conduct risk assessment on an annual basis and submit risk assessment reports to relevant authorities. They are required to designate a person who would be responsible for data security and such person should take steps like formulating and implementation of security protocol, monitor risk, conduct assessments and handle security related complaints and reports.

Disclosure of contents in Privacy Statement: The Regulations provide additional requirements to better implement the Personal Information Protection Law (“PIPL”). They provide that the privacy statements shall include name and contact details of the data handler, the duration for storage of personal data and the method by which the data will be processed on expiry of the storage period. It will also contain the method in which the data subjects can exercise their rights (viz., transfer, deletion, restriction, withdrawal of the data). It also lays down certain rules relating to obtaining consent such as separate consent for processing sensitive personal data, avoid asking repetitive consent when the data subject has refused to give consent earlier, obtaining consent again where purpose or method of processing changes, etc.

Cross-border data transfers: Certain additional relaxations have been allowed for cross-border data transfer such as where any statutory duties need to be performed or where the transfer is necessary for performance of a contract, for human resource management, in emergency situations, etc.

Reporting security incidents: The data processors must implement comprehensive security measures and timely report any security incidents. They must also design emergency response plans for handling such incidents which ensure timely notification of such incidents to the affected data subjects.

Disclosure: The purpose, method, nature and type of personal information collected should be disclosed.

Implication:

Companies handling personal information or important data need to take note of these recent developments and thereby amend, modify their policies to be compliant with the law.

Czech Republic

Czech Republic: Amendments to Czech Labor Code.

The Czech Ministry of Labor published amendments to the Act No. 226/2006 Coll., the Labor Code, on July 31, 2024, mainly transposing European Union (“EU”) laws and Directive 2022/2041 and making certain other amendments in the Czech Labour Code. The key highlights of the amended law are listed below as per the effective date:

Provisions effective from August 1, 2024:
The employer and employee can negotiate remuneration for the work outside the employment agreement like night work, working on weekends or in difficult work conditions, etc.
The obligation on the employer to publish an annual scheduled leave plan at the start of each calendar year is abolished. It will apply from the next plan i.e., (2025).

Provisions effective from January 1, 2025:
The methodology for calculation of minimum wage will be changed in line with EU directive 2022/2041. Under the new methodology, the minimum wage will be determined by an indexation mechanism and will be announced by the Ministry of Labour and Social Affairs by September 30 for the following year. The minimum wage proposed for 2025 is CZK 20,600 per month.
The minimum guaranteed salary will be abolished on January 1, 2025, and only minimum wages will apply.

Implication:

Employers should take note of the amended provisions and implement necessary changes in the relevant documents, internal policies etc.

Finland

Finland: The job alternation leave scheme has been abolished as of August 1, 2024.

The Finnish Parliament approved the government’s proposal to repeal the act governing job alternation leave, which stands discontinued as of August 1, 2024.

The Job Alternation Leave System (“työvuorotteluvapaa”) was designed to provide employees with the opportunity to take a leave of absence from work for a period while allowing them to pursue training or education. Its aim was to support both employee career development and labor market flexibility. The employees were paid job alternation allowance for the period of leave. However, this system now stands discontinued and the final date to start the alternation leave was July 31, 2024. After this date, employees do not have an option to go on job alternation leave or to receive job alternation allowance.

Implication:

Employers should make sure that necessary changes have been made to their internal policies and employee handbooks and no employee takes job alternation leave in future.

Finland: Key taxation changes proposed in the 2025 budget.

The Finnish government has presented the budget proposals for 2025 before the Parliament on September 23, 2024, which include several tax proposals.

The following are the key highlights:

An index adjustment at 3.4% is proposed whereby all income slabs except top two income slabs under progressive income tax scale will be increased. Further, the marginal tax rate for the second highest income slabs will be reduced by 0.25 percent and correspondingly the tax rate for the highest income slab will be increased by 0.25 percent. Thus, the revised tax rates and income limits for different income levels are as follows:

Proposed national tax rates for 2025				National tax rates for 2024
Taxable income (EUR)		Base tax amount (EUR)	Tax on excess (%)	Taxable income (EUR)		Base tax amount (EUR)	Tax on excess (%)
From	Up to	Base tax amount (EUR)	Tax on excess (%)	From	Up to	Base tax amount (EUR)	Tax on excess (%)
0	21,200	0	12.64	0	20,500	0	12.64
21,201	31,500	2,679.68	19	20,501	30,500	2,591.20	19
31,501	52,100	4,636.68	30.25	30,501	50,400	4,491.20	30.25
52,101	88,200	10,868.18	34	50,401	88,200	10,510.95	34
88,201	150,000	23,142.18	41.75	88,201	150,000	23,362.95	42
150,001	–	48,943.68	44.25	150,001	–	49,318.95	44

The maximum amount of basic deduction will increase from EUR 3,980 to EUR 4115.
The maximum earned income deduction from work income will be increased from EUR 2,140 to EUR 3,225. However, it would not be available where net earned income is EUR 125,200 or more.
A new child-related benefit is being added to the work income deduction. Taxpayers will receive an additional deduction of EUR 50 for each dependent minor child, with single parents getting deduction of EUR 100 per child. There is no limit to the number of children that can qualify for this increase, allowing guardians of minor children to benefit from a higher tax deduction.
The tax exemption for relocation and related travel costs paid by employers due to the location of the workplace will continue to be available.
The reduction in the taxable value of zero-emission company cars by EUR 170 per month will continue to apply till 2029.
In case of cross-border work situations, employers can now reimburse employees tax-free for costs related to obtaining passports, visas, work, or residence permits, social security numbers, and tax numbers for both the employee and their family members. Additionally, the cost of using external service providers for these processes can also be reimbursed tax-free.
Items currently subject to the 10% VAT rate will be shifted to the 14% VAT rate, with the exception of newspapers, magazines, and broadcasting services.

Implication:

Employers should evaluate the impact of the above changes on their payroll processing and stay informed about future developments regarding 2025 budget proposals.

Hong Kong

Hong Kong: Government launches Re-Employment Allowance (“REA”) scheme for elderly and middle-aged workers.

On July 15, 2024, the Hong Kong government announced a new initiative to encourage elderly and middle-aged individuals to re-enter the workforce. Under the Re-employment Allowance Pilot Scheme (“REA Scheme”), eligible participants can receive allowances of up to HKD 20,000. The Labor Department has started registration for the three-year scheme, which targets Hong Kong residents aged 40 and above who are legally employable and have not been employed for at least three consecutive months.

Eligible participants who secure full-time employment for six consecutive months will receive an allowance of HKD 10,000, while those who work full-time for 12 months will receive an additional HKD 10,000. For part-time employment, the allowance is halved. Participants can receive a maximum of HKD 20,000 throughout the duration of REA Scheme’s.

In addition, employers who hire such employees can enroll in the Employment Program for the Elderly and Middle-aged (“EPEM”) to receive On-the-Job Training (“OJT”) allowances. The duration for OJT allowance will be extended from 6 to 12 months.

Implication:

Employers should evaluate the EPEM and consider enrolling to take advantage of the OJT allowance.

India

India: Due date for filing return for taxpayers under GST composition scheme extended from financial year 2024-25 onwards.

The Central Board of Indirect Taxes & Customs (“CBIC”) vide Notification No. 12/2024 revised the due date for filing Form GSTR-4 to June 30 which will be applicable from financial year (“FY”) 2024-25 onwards. Earlier, the Form GSTR-4 was required to be filed annually by April 30 following the end of the financial year. Form GSTR-4 is a return that must be filed by the taxpayers opting for composition scheme on an annual basis.

India: Non-small private companies required to file PAS-6 after dematerialization of securities.

The Ministry of Corporate Affairs (“MCA”) has introduced mandatory dematerialization of securities for non-small private companies vide Rule 9B of the Companies (“Prospectus and Allotment of Securities”) Rules 2014. As per the amended rules, non-small private companies were required to mandatorily convert the physical securities into demat form as per the provisions of the Depositories Act, 1996 before September 30, 2024.

As per the provisions of the applicable rules, the non-small private companies are required to procure the International Securities Identification Number (“ISIN”) from the Registrar and Transfer Agent. After obtaining the ISIN, the non-small private companies, are required to file Form PAS-6 which is a “Reconciliation of Share Capital Audit Report” form with the Registrar of Companies (“ROC”) within the following timeline:

November 29^th – for the period from April to September (if the ISIN is obtained after March but before September end)
May 30^th – for the period from October to March (fi the ISIN is obtained before March end)

Subsequently, all the non-small private companies must file every half yearly Form PAS-6 within the due dates as mentioned above (i.e., November 29 and May 30).

Implication:

The non-small private companies must comply with the provision of the applicable company rules and file Form PAS-6 within time to avoid late fees.

India: MCA revises due date for filing Form CSR-2 for the F.Y. 2023-24 and updates form BEN-2 for beneficial ownership disclosure.

The Ministry of Corporate Affairs (“MCA”) recently amended rules regarding filing of Form CSR-2 which is a declaration relating to corporate social responsibility and form BEN-2 for significant beneficial ownership disclosure.

Form CSR -2 (corporate social responsibility):

MCA has revised the timeline to file the Form CSR-2 for the financial year (“FY”) 2023-24 to December 31, 2024, vide the Companies (“Accounts”) Amendment Rules, 2024. The Form CSR-2 is required to be filed separately after filing Form AOC-4 or Form AOC-4-NBFC (“Ind AS”) with the Registrar of Companies (“ROC”).

Earlier, Form CSR-2 was required to be filed as an “addendum” to Form AOC-4, as applicable, within the form AOC-4 filing timeline, i.e., within 30 days from the date of the annual general meeting (“AGM”). Subsequently, the due date for filing Form CSR-2 for the FY 2022-23 was extended to March 31, 2024, and it was required to be filed separately after filing of the Form AOC-4. The latest amendment to the Companies (“Accounts”) Rules, 2014 has updated the due date for the financial year 2023-2024 which is now required to be filed before December 31, 2024.

Form BEN-2 (significant beneficial ownership disclosure):

With an aim to reduce the complexity of legal compliance and for ease of filing, the Ministry of Corporate Affairs (“MCA”) have updated the Form BEN-2 vide the Companies (Significant Beneficial Owners) Amendment Rules, 2024. The form BEN -2 is a form for submission of details of beneficial owners to the registrar of companies. It has become a web form now and it requires specification of purpose for filing the form for updating details of the existing Significant Beneficial Owner (“SBO”) or for change in SBO. Certain other changes have also been made to the form.

Implication:

Companies should take note of the above changes relating to the forms and ensure compliance with them.

Indonesia

Indonesia: Implements use of single identity number in tax administrative services took effect on July 1, 2024

The Indonesian Director General of Tax (“DGT”) through its Regulation No. PER-6/PJ/2024 (“Regulation”) dated June 28, 2024, has merged the individual tax identification numbers (“Nomor Pokok Wajib Pajak” or “NPWP”) with the national identification numbers (Nomor Induk Kependudukan or “NIK”) to simplify and streamline the tax framework in Indonesia, effective from July 1, 2024. The usage of NIK as the identifier number will ease the tax administration processes by eliminating the governmental hurdles thereby increasing the efficacy.

Effective from July 1, 2024, following changes are implemented:

NIK replaced NPWP and will be used as the tax identification number for Indonesian individual taxpayers.
Current 15-digit NPWP is updated to a 16-digit NPWP in case of individual taxpayers not having a NIK, non-Indonesian individual taxpayers, corporate taxpayers, and government institutions.
Issuance of Business Location ID Number (Nomor Identitas Tempat Kegiatan Usaha or “NITKU”) for branch offices. NITKU is a separate tax identification number i.e., different from the tax identification number NPWP of its head office.

The NIK number will be referred and used for following tax services:

Registration of taxpayer (e-registration);
Managing the taxpayer’s account on the DGT’s online portal;
Confirming and informing the status of the taxpayer;
For issuing payslips, tax slips, filing tax returns.

The DGT will slowly list out additional tax services that will use NIK as identifier for administrative purposes. It is important to note that tax services not mentioned above will still continue to use the NPWP number.

Implication:

The companies in Indonesia should take note of this recent development of using NIK as the tax identification number instead of NPWP.

Ireland

Ireland: Ireland’s Budget highlights 2025

The Ministry of Finance, in Ireland announced the Budget on October 1, 2024, and published the Finance Bill on October 10, 2024, which includes measures outlined in the Budget. The Bill will get approved by both houses of the Parliament and will be enacted by the end of this year. Most of the provisions will be effective from January 1, 2025, unless otherwise specified.

The key highlights of Budget 2025 are as under:

Corporate tax measures:

Research & Development (“R&D”) Tax Credit: Under the R&D tax credit regime, companies are entitled to a fully payable credit that is paid over 3 years in fixed installments viz. 50%, 30% and 20%. However, instead of claiming the first installment calculated at 50% of the total R&D credit amount, the companies can claim the R&D credit up to specified threshold in the first year. The first-year payment threshold for R&D credit is increased from EUR 50,000 to EUR 75,000 for all qualifying R&D expenditure.

The companies can claim to have each instalment paid out by the tax authorities in each year or can elect to treat full or part of each instalment as a pre-payment of tax and offset it against the tax liabilities payable (i.e., corporation tax, VAT, employment taxes).

Personal income tax measures:

The personal income tax rates remain unchanged at 20% (standard rate) and 40% (higher rate). However, income slabs are revised, as given below:

Category/ Status	Tax Rate	Income Slabs for 2025 (EUR)	Income Slabs for 2024 (EUR)
Single	20%	0-44,000	0-42,000
	40%	44,001 and above	42,001 and above
Married (single earner)	20%	0-53,000	0-51,000
	40%	53,001 and above	51,001 and above

Employee and personal tax credits, each, will be increased from EUR 1,875 to EUR 2,000. Personal tax credit is applicable to all individuals who are single, married, separated, divorced or a former civil partner. Employee tax credit applies to all salaried employees.
The annual exemption limit for Small Benefit Exemption has been increased from EUR 1,000 to EUR 1,500 and raises the number of non-cash benefits allowed under the exemption from two to five. In Ireland, the Small Benefits Exemption allows employees to receive certain non-cash benefits (up to specified number and prescribed threshold, as mentioned above), such as vouchers or gifts, each year without having to pay tax on it. These benefits are not considered as taxable income, so employees do not pay Income Tax, Pay Related Social Insurance (PRSI), or Universal Social Charge (USC) on these benefits.

Social welfare measures:
The national minimum wage has been increased by EUR 80 cents from the current minimum wage EUR 12.70 per hour to EUR 13.50 per hour;
The bill proposed certain changes in the Universal Social Charge (“USC”), related to the ceiling and rates. USC is the additional tax payable by the employees on their income, apart from regular personal income tax, if the income exceeds the threshold (currently EUR 13,000). If the income exceeds the threshold, USC is payable on the full total income as per slabs/ rates prescribed. The revised USC rates and bands will be:

Annual Band for 2025	Annual Band for 2024	Employee Rate
EUR 0 – EUR 12,012	EUR 0 – EUR 12,012	0.5%
EUR 12,012.01 – EUR 27,382	EUR 12,012.01 – EUR 25,760	2%
EUR 27,382.01 – EUR 70,044	EUR 25,760.01 – EUR 70,044	3% (Changed from 4% for 2024 to 3% in 2025)
EUR 70,044.01 and above	EUR 70,044.01 and above	8%

In case of self-employed individuals having income of EUR 100,000 or more, USC rate applicable is 11%.

Effective from October 1, 2025, Pay Related Social Insurance (“PRSI”) contribution rate will increase from 4.1% to 4.2%. The employer PRSI rate will increase from 11.15% to 11.25%, and from 8.9% to 9% for employees earning EUR 496 or less per week;
Parent’s benefit will increase by EUR 15 i.e. from EUR 274 per week to EUR 289per week. Parent’s Benefit and parent’s leave entitlements are available to parents during the first two years after their child’s birth or adoption. Parent’s leave allows parents to take time off work, and Parent’s benefit provides financial support during this period, provided the parent has sufficient Pay Related Social Insurance (“PRSI”) contributions. Single person child carer credit will increase from EUR 1,750 for 2024 to EUR 1,900.

VAT measures:
Changes to the VAT registration thresholds for businesses are as follows:

Type of business activity	New threshold (effective January 1, 2025)	Current threshold (applicable up to December 31, 2024)
Sale of services	EUR 42,500	EUR 40,000
Sale of goods	EUR 85,000	EUR 80,000

The reduced VAT rate of 9% (as against standard rate of 13.5%) for gas and electricity supplies has been extended until April 30, 2025, which was set to expire on October 31, 2024.
Effective form January 1, 2025, the VAT rate on the supply and installation of heat pumps will be reduced to 9% from the current rate of 23% to encourage homeowners to install heat pumps as part of climate action efforts.

Implication:

Businesses should take note of the budget changes, track further development and comply with them accordingly.

Israel

Israel: Knesset passes amendments to privacy law introducing broader powers to data protection authority, mandatory appointment of privacy officer.

On August 8, 2024, the Privacy Protection Authority (“PPA”) announced that the Knesset has passed the Privacy Protection Bill (“Amendment No. 13”). This amendment, which was officially published in the official gazette on August 14, 2024, will take effect one year after its publication.

The following are the key provisions of the Amendment No. 13:

Updated definitions: The amendment updates various definitions under the law. The term ‘information’ is now replaced by the term ‘personal information’ and ‘sensitive information is replaced by ‘highly sensitive information’ which includes personal data such as political opinion, medical data, religious belief, criminal records, genetic data, etc. The definition of the term ‘controller’ is also introduced while the definition of the term ‘holder’ is revised. The term ‘controller’ has the meaning similar to other countries’ data protection law including GDPR. The term ‘holder’ is defined as the external entity to data controller that processes the date on behalf of the data controller. This will align Israel data protection law with international best practices.

Enforcement and investigative powers of PPA: The amendment provides PPA the administrative and criminal investigation powers such as issuing notices, issuing orders to cease violations, levying significant fines and penalties for violation of the law, etc.

Privacy Protection Officer (“PPO”) requirement: The amendment now obligates public bodies, organizations who are mainly engaged in handling significant amounts of sensitive personal data and organizations who are actively engaged in monitoring or tracing individuals to appoint a PPO to ensure compliance with the law and protection of privacy.

Reduction in regulatory burden to register databases: The requirement for private entities to register digital databases has been largely eliminated, except for those involved in information trade. Further, organizations can also seek preliminary opinions on legal compliance from PPA. However, the obligation to register their databases will continue to apply to public bodies.

Criminal offenses: The amendment introduces blanket prohibition on processing of personal data obtained illegally. Further, the amendment introduces new provisions regarding criminal offenses for unauthorized data processing and for misleading individuals while obtaining their personal information, etc.

Compensation for privacy violations: The amendment authorizes courts to award financial compensation for various types of privacy violations without the need to prove the damage.

Supervision in security agencies: Security agencies are required to appoint internal privacy inspectors to oversee privacy practices. They are required to report their findings to the PPA.

Implication:

Businesses which are involved in the processing of personal information should take note of the amendments and evaluate their impact including for the requirement relating to appointment of PPOs.

Israel: Law on prevention of sexual harassment expanded to include service contractor’s employees.

Israel has amended the Law for the Prevention of Sexual Harassment vide publication dated July 25, 2024, to extend the protection under the law to employees of the service contractor. Previously, the law covered only employees of manpower contractors, but now it will apply to all contractor employees through whom services are received. The amendment, which will be effective on January 26, 2025, also includes transitional provisions whereby current rules for manpower contractor employees will apply to service contractor employees until the formal regulations become effective.

Implication:

Employers employing more than 25 employees are required to establish regulations for preventing sexual harassment and handling complaints. Due to the recent amendment to the law, these regulations will now also apply to employees of service contractors.

Italy

Italy: Reforms of the tax penalty system making changes in the VAT penalties, effective for violations committed after September 1, 2024.

On June 28, 2024, Italian Legislative Decree no. 87, published in Official Journal no. 150, introduced significant amendments to the Italian tax penalty system. Although the decree came into force the day after its publication, the updated regulations will apply to tax violations committed from September 1, 2024.

These changes include important updates to VAT penalties, which are summarized as below:

Sl. No.	Type of Violation	Revised Penalties (applicable to violations committed from September 1, 2024)	Previous Penalties (applicable to violations committed up to August 31, 2024)
1	Omitted VAT return	Fixed at 120% of the VAT due. This is a standardized penalty without variability based on previous offenses.	120%-240% of the VAT due. This penalty escalates based on the severity and frequency of the offense.
2	Inaccurate annual VAT return	Reduced to 70% of the additional VAT due or the lower VAT credit, simplifying the penalty structure.	90%-180% of the additional VAT due or the lower VAT credit. The percentage depends on the extent of the inaccuracy.
3	Failure to invoice taxable transactions	Reduced to 70% of the undocumented VAT. Minimum penalty lowered to EUR 300, easing the financial burden.	90%-180% of the undocumented VAT. Minimum penalty of EUR 500 applies, escalating with the amount of VAT involved.
4	Failure to invoice non-taxable transactions	Reduced to a flat 5% of the non-documented consideration. Minimum penalty lowered to EUR 300, promoting compliance.	5%-10% of the undocumented consideration, with a minimum penalty of EUR 500.
5	Undue recovery of input VAT	Reduced to 70% of the VAT, providing a less severe consequence while still addressing the violation.	90% of the VAT claimed incorrectly, reflecting the significant penalty for misusing input VAT credits.
6	Inaccurate information in invoices/customs declarations	Reduced to 70% of the VAT, making penalties more manageable while still discouraging inaccuracies.	100%-200% of the VAT, reflecting the seriousness of providing correct information in official documents.
7	Omitted VAT payments (i.e., collected from customers but not deposited with the government)	Reduced to 25% of the VAT amount, providing a more lenient approach to encourage timely compliance.	30% of the VAT amount due.
8	Intra-community supplies of goods	Italian suppliers will be subject to penalties equal to 50% of VAT for goods not received in the EU country of destination within 90 days of delivery. Suppliers can regularize the transaction by rectifying the invoice and charging VAT within 30 days from the 90-day deadline.	No previous penalties applicable.

Implication:

Taxpayers should be aware of the changes to the penalty system to prevent incurring significant penalties for non-compliances or failures.

Italy: Italy increases substitute tax on foreign income for new residents from EUR 100,000 to EUR 200,000 effective from August 10, 2024.

Italy published ‘Decree-Law No. 113’ in the official gazette on August 9, 2024, which took effect on August 10, 2024. This decree introduces several urgent tax measures, including a notable increase in the substitute tax for individuals who move their tax residence to Italy and earn income abroad.

Following are key features of the substitute tax regime and recent amendments:

Individuals moving their tax residency from abroad to Italy can opt for the application of a flat substitutive tax for the first 15 years after Italian tax residency is acquired. The flat tax is at a fixed amount of EUR 100,000, which is now increased to EUR 200,000. The increase applies to new residents after the decree-law enters into force i.e., after August 10, 2024, and not to existing residents taxed under the regime.
Each family member can also be subject to a flat forfeiture substitutive tax on non-Italian sourced income at a lower fixed amount of EUR 25,000.
To qualify for this regime, individuals must have been tax non-residents in Italy for at least 9 out of the 10 years before relocating.
Further, the option needs to be selected through the annual Italian tax return, and it is recommended to apply for an advance ruling from the Italian tax authorities.

Implication:

Individuals relocating to Italy should take note of the increase in the substitute tax on foreign income to EUR 200,000, as it may impact their financial planning and tax strategies.

Italy: European Union (“EU”) Directive on “Public” country by country reporting – transposed into domestic law.

On December 1, 2021, official journal of the European Union (“EU”) published directive 2021/2101 amending earlier directive 2013/34/EU in respect of disclosure of income tax information by certain undertakings and branches. The new directive introduced “public” Country-by-Country (“CbC”) reporting requirements in the EU.

The new directive requires multinational enterprises with total consolidated revenue exceeding EUR 750 million in each of the last two consecutive financial years to publicly disclose certain income tax information. The information is to be reported for each EU Member State where the group is active and also for each jurisdiction considered as “non-cooperative” by the EU or in the EU’s “grey” list for a minimum of two years. For all other jurisdictions, information can be reported on an aggregated level.

The public CbC reporting information is similar to existing standard CbC reporting requirements and covers the following areas for all members of the group:

A brief description of activities:
Number of employees
Net turnover (including related-party turnover)
Profit or loss before tax
Tax accrued
Tax paid
The amount of accumulated earnings

It will also include the name of the ultimate parent undertaking or the standalone undertaking, the financial year concerned, the currency used for the presentation of the report and, where applicable, a list of all subsidiary undertakings consolidated in the financial statements of the ultimate parent undertaking, etc.

The reports are to be published in an EU Member State business register, and also on the companies’ websites (should remain accessible for at least five years). Where the ultimate parent is a non – EU, the reporting will generally have to be done by the EU subsidiaries or branches.

The new directive entered into force on December 21, 2021, and EU Member States had time until June 22, 2023, to transpose the new directive into domestic legislation.

Accordingly, Italy transposed the directive through Legislative Decree No. 128 of September 4, 2024, which was published in the Official Gazette No. 214 on September 12, 2024. The obligations introduced by the Decree apply to financial statements for financial years starting on or after June 22, 2024.

The public CbC report must be submitted in Italy to the business/company register for inclusion in the register within one year after the end of the reporting period.

Italy made several decisions regarding the optional provisions of the directive to simplify reporting and ensure transparency as below:

Italy allows companies to use simplified reporting under “Directive 2016/881/EU” to reduce paperwork.
Italy did not adopt the safeguard clause, meaning companies cannot omit sensitive information that could impact tax transparency.
Companies must publish their reports on their own websites, even though the reports are also available in a national register.
Reports must be in at least one EU language and translated into Italian.
Penalties for not submitting reports range from EUR 10,000 to EUR 50,000.

Implication:

Multinational groups meeting the qualifying criteria are required to comply with public CbC reporting requirements in Italy for the financial year commencing on or after June 22, 2024.

Italy: New increased thresholds for preparation of abbreviated financial statements, micro-enterprises regime and exemption from consolidated financial statements; mandatory sustainability reporting.

Italy’s Legislative Decree No. 125/2024, published in the Official Gazette No. 212 on September 10, 2024, amends the limits/ thresholds for preparation of abbreviated financial statements, micro-enterprises regime and updates the exemption criteria for consolidated financial statements.

The limited liability company is required to prepare statutory financial statements, which include a balance sheet, income statement, and notes to the financial statements. Statutory financial statements have to be accompanied with directors’ reports. Certain small and medium-sized companies have an option to file abbreviated financial statements, which include condensed balance sheet and income statements, reduced notes disclosures, and the directors’ report is not required. There is a micro-enterprise regime. Micro-enterprises are defined as those not exceeding the thresholds for total assets, revenues, and employees. These entities are exempt from preparing cash flow statements and certain notes to reduce the reporting burden and enhance operational focus.

Further, consolidated financial statements are required to be prepared where the parent company controls one or more subsidiaries and exceeds specified thresholds related to assets, revenue and employees. The parent companies can be exempt from preparing consolidated financial statements if such companies and their subsidiaries do not exceed the specified thresholds for two consecutive years.

The amended thresholds are as below:

Category	New Limits	Previous Limits
Abbreviated Financial Statements
Total Assets (in Euros)	EUR 5,500,000	EUR 4,400,000
Revenues from Sales and Services (in Euros)	EUR 11,000,000	EUR 8,800,000
Average Number of Employees	50	50
Micro-Enterprises Regime
Total Assets (in Euros)	EUR 220,000	EUR 175,000
Revenues (in Euros)	EUR 440,000	EUR 350,000
Average Number of Employees	5	5
Exemption from Consolidated Financial Statements
Total Assets (in Euros)	EUR 25,000,000	EUR 20,000,000
Revenues (in Euros)	EUR 50,000,000	EUR 40,000,000
Average Number of Employees	250	250

The new thresholds established by Legislative Decree No. 125/2024 will take effect for the financial statements from the financial year 2024. Companies exceeding these limits must comply with ordinary regime requirements, including financial statement structure and related obligations like appointing a control body or statutory auditor.

Further, the Decree No. 125/2024 also transposes “Directive 2022/2464/EU” on sustainability reporting. It mandates sustainability reporting, requiring companies to disclose qualitative and quantitative information on environmental, social, and governance (“ESG”) impacts. These reporting obligations will apply to listed large companies (i.e., companies with more than 250 employees, annual turnover exceeding EUR 50 million, or balance sheet total exceeding EUR 25 million) starting from January 1, 2024, and progressively to listed small and medium-sized companies (i.e.- not qualifying as large company as mentioned above) by January 2025, and other unlisted enterprises by January 2026.

Implication:

Companies exceeding the revised thresholds must enhance their reporting practices and governance structures to comply with the regular regime, ensuring greater transparency and accountability.

Further, the companies must check sustainability reporting requirements applicable to them and make necessary changes in policies, systems and procedures to ensure timely and complete reporting.

Japan

Japan: Minimum hourly wage increased to JPY 1,054 from JPY 1,004 for fiscal year 2024.

On July 25, 2024, the Japanese Government decided to increase minimum hourly wages by JPY 50 whereby the average hourly wages will increase to JPY 1,054 (previously JPY 1,004) for the fiscal year 2024. This is the highest increase ever.

Lithuania

Lithuania: Minimum wages in Lithuania increased to EUR 6.35 per hour from EUR 5.65 per hour effective from 2025.

Effective from January 1, 2025, Lithuanian Government approved an increase in minimum monthly wages from EUR 924 to EUR 1,038 and hourly wages from EUR 5.65 per hour to EUR 6.35 per hour.

Lithuania: Increase in VAT registration threshold from EUR 45,000 to EUR 55,000 effective from January 1, 2025.

Lithuania has proposed changes to the VAT Law, which is under consideration with the Parliament. As per the changes proposed, the mandatory VAT registration threshold for businesses is proposed to be increased to EUR 55,000 (previously EUR 45,000) from January 1, 2025.

Further, it is also proposed that a taxable person from another EU Member State can apply for a small business VAT exemption from registration in Lithuania, if its annual turnover in Lithuania is up to EUR 55,000 and total EU turnover does not exceed EUR 100,000.

Implication:

Small, unregistered businesses should keep a track of further developments and obtain registration as necessary.

Lithuania: Corporate tax measures effective from January 1, 2025.

The Lithuanian Government approved a ‘Defense Fund Package’ on June 28, 2024, containing various tax measures and thereby financing the State Defense Fund. The ‘Law on Corporate Income Tax No IX-675’ is amended by the tax measures which will be effective from January 1, 2025. The key measures are as under:

The standard corporate income tax rate will be increased to 16% from 15% for all companies.
Reduced corporate income tax rate for small companies (viz., companies having employees up to 10 and having an annual revenue up to EUR 300,000) will be increased to 6% from 5%. The reduced tax rate applies from the second year and for the first year, the tax rate is 0%, subject to certain conditions.

Implication:

The companies need to take note of these upcoming changes and adopt the same as applicable.

Malaysia

Malaysia: Senate approved significant amendments to data protection law introducing requirements to appoint data privacy officers and to notify data breaches.

On July 31, 2024, Malaysia’s Senate passed the Personal Data Protection (“Amendment”) Bill 2024 (“the amendment bill”), amending several provisions of the Personal Data Protection Act 2010 (“PDPA”). The amendment bill is expected to take effect once it receives the royal assent and is

published in the official gazette. The Information Protection Commissioner is expected to issue new guidelines to address aspects like qualification, appointment of data protection officers, procedure for data breach notification, data portability and cross-border data transfers.

Key amendments to PDPA include:

Substitution of the term “data user” with “data controller”: The amendment bill replaces the term “data user” with “data controller” to align provisions with international data protection frameworks like GDPR. While this change doesn’t have significant practical effects, organisations should update relevant documents, including privacy policies, notices, and forms, when the amendment bill comes into effect.

Data processor’s obligation to comply with the security principle: Previously, only data users had to comply with the security principle in the PDPA. The amendment bill now mandates data processors to take steps to protect personal data from loss, misuse, unauthorized access, or destruction. A failure to comply with this requirement could result in a fine of up to RM 1,000,000 and/or imprisonment for up to three years.

Mandatory data breach notification: The amendment bill introduces a provision requiring data controllers to notify the Personal Data Protection Commissioner promptly if a personal data breach occurs. Further, in cases where there is risk of significant harm to data subjects, the data controller is also required to notify the data subject about the data breach incident. The term data breach is defined as any breach, loss, misuse of or unauthorised access to personal data. A failure to comply with this provision can lead to a fine up to RM 250,000 and/or imprisonment for up to two years.

Appointment of Data Protection Officer (“DPO”): The amendment bill requires both data controllers and processors to appoint one or more DPOs to ensure compliance with the PDPA. The guidelines as to qualification, procedure for appointment of DPO is likely to be published in future.

Increased penalties for breach of personal data protection principles: The amendment bill proposes higher penalties for violating personal data protection principles, with fines up to RM 1,000,000 and/or imprisonment for up to three years.

Data portability rights: The amendment bill introduces data portability rights, allowing individuals to request the transfer of their personal data between data controllers if technically feasible. Data eligible for portability includes information directly provided by the data subject, information processed based on consent or contract and handled via automated means.

Cross-border data transfers: Data controllers are currently prohibited from transferring personal data to jurisdictions outside Malaysia unless the jurisdiction has been notified in the Official Gazette by the Minister, pursuant to the recommendation by the Commissioner. The amendment bill proposes to remove this requirement. The amendment bill now proposes to permit the transfer of personal data outside Malaysia, provided the destination country has data protection laws similar to the PDPA or it offers an adequate level of protection equivalent to PDPA. The guidelines for clarity of the proposed provisions are expected to be issued in future.

Biometric data recognised as “sensitive personal data”: Biometric data will now be considered as sensitive personal data, requiring stricter consent and security measures. The term biometric data is defined in the amendment bill as any personal data resulting from technical processing relating to the physical, physiological, or behavioural characteristics of a person.

Deceased individuals not to be considered as data subjects: The amendment bill excludes deceased individuals from the definition of data subjects. Thus, the PDPA will no longer apply to processing personal data related to the deceased person.

Implication:

Businesses which process personal data should evaluate the amendment bill to understand the impact on their data protection policies and obligations, specifically the requirement to appoint data protection officers and notification of data breaches.

Mexico

Mexico: Mandatory holiday shifted from December 1to October 1.

The Mexican Government approved an amendment to Article 74 of the Mexican Federal Labor Law (“FLL”) whereby an official mandatory holiday of December 1 is moved to October 1. The decree proposing this amendment was approved on September 24, 2024, and is effective from September 30, 2024 (publication date).

As per the current provisions of the Federal Labor Law, there is a mandatory holiday which falls on December 1, every six years. This holiday marks the day to celebrate the coming into force of a new presidential body or transfer of the Federal Executive Power.

The amendment intends to sync the Federal Labor Law with Article 83 of the Political Constitution, which states the day when the presidential body comes into power viz. October 1 and such body remains in power for six years.

Employees are entitled to regular salary and extra double salary if they work on this day. Employers may be subject to fines ranging between MXN 5,187 to MXN 518,700 for any contravention of this provision and not paying the employees working on this day.

Implication:

Employers need to take note of this change and accordingly change their employment contracts, leave policies to incorporate it.

Netherlands

Netherlands: Proposed tax plan 2025 – Key highlights.

The Netherlands government presented the Budget for 2025 before the Parliament on September 17, 2024. The tax proposals included in the budget for the year 2025 if approved by the Parliament, will be effective from January 1, 2025.

The following are key proposals from the tax plan 2025:

Personal Income Tax

Changes to Box 1 (Income from work and home ownership) (for individuals below state pension age):

Taxable Income Slabs (2025)	Tax rate (2025)	Taxable Income Slabs (2024)	Tax rate (2024)
Upto EUR 38,441	35.82% *	Upto EUR 38,098*	36.97%*
EUR 38,442 to EUR 76,817	37.48%	EUR 38,099 to EUR 75,518	36.97%
Above EUR 76,817	49.50%	Above EUR 75,518	49.50%

*Includes national insurance contribution 27.65%.

Changes to general and labour tax credit:

Tax Credit threshold (maximum tax credit)	Amounts (in EUR)
	2025	2024
General tax credit up to AOW retirement age	EUR 3,068	EUR 3,362
Labor discount up to AOW retirement age	EUR 5,599	EUR 5,532

Changes to social security contribution rates for employers:

Type of Insurance	Rates/Thresholds
	2025	2024
Health Insurance Act (“Zorgverzekeringswet/Zvw”)	6.51%	6.57%
Unemployment Insurance (“WW”) – Permanent contracts	2.74%	2.64%
Unemployment Insurance (“WW”) – Temporary contracts	7.74%	7.64%
Maximum Premium – Health Insurance (employer)	EUR 75,860	EUR 71,628

Changes to Employee Insurance premiums Disability Act (“WIA”):

Type of Insurance	Rates/Thresholds
	2025	2024
WIA – Basic (High)	7.58%	7.54%
WIA – Basic (Low)	6.35%	6.18%
WIA – Bonus	0.5%	0.5%
Maximum premium wage for employee insurance	EUR 75,860	EUR 71,628

Payroll Tax

Changes to 30% ruling which is applicable to foreign workers:

The 2024 Tax Plan has a proposal to reduce the 30% tax rate in a phased manner (30-20-10 ruling). But as per 2025 Tax Plan, a constant rate of 27% will be implemented from the year 2027. For 2025 and 2026, the maximum rate will remain at 30%. Employees who have already applied the 30% ruling before 2024 will continue to benefit from the 30% rate until the end of their ruling period.

The salary requirement for the 30% ruling will be increased to EUR 50,436 (previously EUR 46,107) as of January 1, 2027 (based on 2024 amounts, which will be indexed later). For employees under 30 years of age with a master’s degree, the salary requirement will be EUR 38,338 (previously EUR 35,048) (2024 amounts). Employees who already applied the 30% ruling before 2024 will continue to follow the old (indexed) salary requirement until the end of the ruling’s duration.

Further details of these adjustments are expected to be announced soon.

Corporate Tax:

Key corporate tax rates are proposed to be kept unchanged.
Public Country-by-Country (“CbC”) Reporting – First reporting:

The Dutch Public Country-by-Country Reporting Directive, introduced on June 22, 2024, has officially come into force. This regulation requires large international companies to publicly disclose their financial data. The reporting obligation will start from the financial starting on or after June 22, 2024. Thus, for businesses with a fiscal year aligned to the calendar year, the first reporting will apply for the year 2025, with a deadline for public disclosure set for December 31, 2026.

Implication:

Employers should take note of the changes in payroll taxes and adjust their payroll and withholding accordingly. Employers shall also take a note of changes to the 30% ruling in order to adjust their payroll practices. Eligible entities for Public CbC reporting need to take appropriate steps to stay compliant with the reporting requirements.

Netherlands: Changes to the small business scheme for VAT (“kleineondernemersregeling/KOR”) and introduction of EU-KOR scheme effective from January 1, 2025.

The Dutch government has announced significant changes to the small business scheme (“kleineondernemersregeling/KOR”) and introduction of a new EU-KOR scheme effective from January 1, 2025.

The key changes to the small business scheme (“KOR”) are as under:

Currently, the entrepreneurs who want to participate in KOR are required to do so for a minimum period of 3 years. This provision will no longer apply allowing entrepreneurs to exit anytime starting 2025.
The registration threshold will increase to EUR 2,200 (previously EUR 1,800) for the year 2025.
The current 3-year waiting period for re-registration after the entrepreneur has exited the scheme, will be reduced to the remaining calendar year and the following calendar year, effective from January 1, 2025.
From October 1, 2024, registering or deregistering for the KOR will be quicker and easier through the My Tax Authorities Business portal.
Effective January 1, 2025, foreign entrepreneurs with VAT establishments in the Netherlands will no longer qualify for the KOR scheme. Additionally, an amendment effective the same date allows small businesses from other EU Member States, with an annual EU turnover under EUR 100,000, to qualify for an exemption from registration in the Netherlands.

New EU-KOR scheme:

Effective January 1, 2025, Netherlands launched a new EU-KOR scheme in which entrepreneurs in the Netherlands can apply for VAT exemptions across multiple EU countries. The new EU-KOR scheme allows businesses to opt for VAT exemptions in one or multiple EU countries. Under this scheme, participant entrepreneurs are not required to charge or pay VAT or file returns in other EU countries. Instead, they are required to submit quarterly turnover statements for the entire EU in the Netherlands. Key conditions for eligibility under the scheme are having a head office in the Netherlands and annual turnover not to exceed EUR 100,000 across all EU countries.

Implication:

Eligible businesses should take note of the new scheme and evaluate if it is beneficial to them.

Poland

Poland: Transposed EU directives related to VAT exemption for small businesses and place of supply rules for certain services effective from January 1, 2025.

On September 10, 2024, Poland Government amended the VAT Act to implement 2 EU directives (viz. Council Directive (“EU”) 2022/542 and Council Directive (“EU) 2020/285”). The amendments include introduction of VAT exemption for small businesses and changes in determining the place of supply for certain services, which will be effective from January 1, 2025.

The amendments are as follows:

Small Businesses VAT Exemption: Small businesses established in another EU member state, without a permanent establishment in Poland, can opt for the VAT exemption if their annual EU turnover does not exceed EUR 100,000. However, the VAT registration in Poland is mandatory if the turnover in Poland is above PLN 200,000 (i.e., regular turnover threshold for mandatory VAT registration in Poland). Currently, small businesses operating in other EU countries and not having its registered office in it are required to register and comply with VAT obligations in every EU country, if they cannot use the simplified settlement system viz. “One-Stop Shop” (“OSS”). Hence, they are less competitive than small businesses operating locally. The new provisions will simplify the administrative obligations for small businesses by introducing the VAT exemption in EU Member States other than the country of establishment.

New rules for determining the place of supply of services for remote events: The new rules will now apply for determining the place of supply of services where the presence of the recipient of such services is virtual and not physical, particularly in cultural, artistic, sports, scientific, educational, or entertainment events. In such cases, the VAT will be applied based on the recipient/ consumer’s location rather than the location of the event. For instance, VAT on online concerts attended by consumers or taxable persons will be collected in the country of the consumer’s residence or the taxpayer’s registered office.

Currently, the place of supply for services is generally the supplier’s registered office for B2C transactions (“Business-to-Consumer”). For B2B transactions (“Business-to-Business”), the place of supply is the recipient’s registered office or fixed establishment. The upcoming change will primarily impact B2C services, shifting the place of supply to the consumer’s location.

Implication:

The new provisions will simplify the administrative obligations for small businesses operating across the EU Member States by allowing them to operate without the need for separate VAT registrations in each Member State if covered by the new VAT exemption i.e., not meeting the EU turnover threshold and domestic turnover threshold.

Serbia

Serbia: Increase in monthly/ hourly minimum wage rates to RSD 53,592 per month effective January 1, 2025.

On August 28, 2024, the Serbian government announced significant increases to the monthly and hourly minimum wage rates, set to take effect on January 1, 2025.

Monthly minimum wage will increase to RSD 53,592 (previously RSD 47,335).
Hourly minimum wage will increase to RSD 308 (previously RSD 271).

Singapore

Singapore: Increase in Central Provident Fund (“CPF”) limits effective from January 1, 2025.

In Singapore, employers and employees contribute 17% and 20%, respectively, to the Central Provident Fund (“CPF”) calculated on an ordinary monthly salary (“OW”) capped at SGD 6,800 for the year 2024. As announced earlier, this is now increased to SGD 7,400 for the year 2025. The annual salary ceiling limit remains unchanged at SGD 102,000.

Implication:

The employers are required to consider the revised monthly ceilings while calculating the social security contributions.

Singapore: Singapore passes new bills to enhance regulatory framework for corporate service providers and corporate transparency for companies and limited liability partnerships.

The Corporate Service Providers (“CSP”) Bill, the Companies and Limited Liability Partnerships (“Miscellaneous Amendments”) (“CLLPMA”) Bill and Accounting and Corporate Regulatory Authority (“ACRA”) Registry and Regulatory Enhancements Bill were passed by the Singaporean Parliament on July 2, 2024. The Bills introduced provisions for enhancing regulatory framework for CSPs and corporate transparency for companies and limited liability partnerships. The implementation timeline has not yet been announced, but the adequate lead time will be given for the implementation of the proposed changes and for the transition process.

The key changes are as follows:

Businesses providing corporate services in and from Singapore will be required to register with ACRA as registered CSPs. Corporate services include legal entity formation, providing register office/ business address, acting as director/ nominee shareholder, carrying out any designated activity in relation to the provision of any accounting service, etc.

Registered CSPs will be required to comply with the obligations, including related to anti-money laundering, countering the financing of terrorism and the proliferation of weapons of mass destruction (“AML/ CFT/ PF obligations”); any failures or breaches will result in fines.

Restrictions on a person acting as a nominee director by way of business, unless the appointment of the person as a nominee director of the company is arranged by a registered CSP after necessary assessment. The changes are for preventing the misuse of nominee directorship arrangements by way of business in creating shell companies to facilitate money laundering.

Nominee status of nominee directors and nominee shareholders and identities of their nominators will be required to be disclosed to ACRA; and

Fines are increased related to the register of registrable controllers, register of nominee directors and register of nominee shareholders.

Implications:

The businesses providing corporate services and not registered currently, will need to check the applicability and requirement for registration under the new provisions.
The CSPs providing nominee director services should comply with requirements of carrying out assessments for confirming that such appointment is fit and proper.
The businesses should take note that nominee status of directors and shareholders will be made available publicly and will be reflected on public business profile searches conducted on the company.

Singapore: Employers of Record can no longer sponsor work passes for foreign company’s employees.

The Singaporean Ministry of Manpower (“MOM”) has clarified on July 9, 2024, through its website, thereby preventing foreign companies from using Employer of Record (“EOR”) and its services for sponsoring work passes to hire foreign employees (“expats”) in Singapore.

In Singapore, a sponsored work pass is necessary for hiring expats who will work for a foreign company not having legal/ local presence in Singapore. An EOR is a company resident in Singapore, which enables hiring of foreign nationals on behalf of foreign companies by sponsoring work passes for them and is also responsible for all the legal compliances pertaining to such hiring. The foreign company employing expats through EOR does not need to get incorporated as a company in Singapore.

As per the clarification issued by MOM, the EORs will not be able to sponsor expats to work in Singapore for a foreign company. Any contravention of the provisions will be considered as an offence resulting in fines and/or imprisonment and any other reputational consequences.

Hence, a foreign company intending to hire an expat in Singapore (i.e., who is not a citizen or permanent resident of Singapore) will need to get incorporated as a company in Singapore or will need to set up a representative or branch office in Singapore.

Implication:

The foreign companies need to take note of this latest development and accordingly reassess viable alternatives to maintain a presence in Singapore complying with the local laws.

South Africa

South Africa: Introduction of VAT at 15% on low-value consignments.

The South African Revenue Service (“SARS”) has announced a 15% Value Added Tax (“VAT”) on all imported Business-to-Consumer (“B2C”) consignments, effective September 1, 2024. Previously, parcels valued under ZAR 500 were exempt from VAT, while incurring only a 20% flat customs duty. This is an interim measure for protecting the clothing industry in South Africa and to create a fairer environment for local businesses which must compete with imported goods. Thus, imports are now subject to a 15% VAT on low-value parcels in addition to the existing 20% flat customs duty starting September 1, 2024.

Implication:

Businesses should evaluate impact of VAT change and update their systems.

Sweden

Sweden: Sweden presented the Autumn Budget Bill for 2025.

On September 19, 2024, the Swedish government presented a budget bill for 2025 with a focus on investing in long-term growth and security. The bill has various tax measures which will take effect from January 1, 2025, unless otherwise stated. The key proposals are as follows:

The compensation level to qualify for ‘expert tax relief’ (called as ‘amount rule’) is proposed to be lowered. It is currently set at two price base amounts per month (i.e., SEK 114,600 for 2024), which is proposed to be reduced to one and a half price base amounts (i.e., SEK 85,950 for 2024) and it will apply in respect of work in Sweden starting after December 31, 2024. In Sweden, foreign experts and key personnel employed by a Swedish company (or a non-Swedish company with a PE in Sweden) may apply for ‘expert tax relief’, subject to certain conditions. The relief is by way of exemption from Swedish tax and social security charges in respect of 25% of the compensation for a period of seven years.

Earned income tax credit is proposed to be increased.

Tax-free basic level (for yield tax) for savings in individual investment savings accounts is increased, which will be up to SEK 150,000 in 2025 and SEK 300,000 in 2026.

The deduction of interest expenses on unsecured loans will be gradually phased out over two years. In 2025, taxpayers may deduct 50% of interest expenses on loans not meeting the new requirements.

The carried forward losses that can be retained after a change of ownership is proposed to be increased from 200% to 300% of the purchase price; and

In order to support growing companies, reduction of employer contributions for one-person companies hiring an additional employee is proposed to be expanded to cover up to two employees and the threshold for monthly compensation eligible for the reduction is proposed to be increased to SEK 35,000.

Implication:

Businesses should keep a track of further developments and make necessary changes in the policies and systems as per the proposed amendments.

Switzerland

Switzerland: Tax deductions for childcare costs increased.

In Switzerland, actual child care/day-care costs up to a capped/ specified amount can be claimed as deduction at federal level and in certain cantons. The deduction can be claimed by married and unmarried couples as well as single parents incurring third-party childcare costs from their taxable income for federal tax and cantonal and municipal taxes. It applies in respect of children up to 14 years of age living with the taxpayer and directly related or incurred due to the taxpayer’s employment, education or disability. The maximum deduction for federal tax purposes was CHF 25,000 per child, which is now increased to CHF 25,500 per child for 2024.

Taiwan

Taiwan: Amendments related to submission of B2B and B2C electronic invoices to E-invoice platform, effective from January 1, 2025.

Taiwanese Government through a Presidential Decree Hua-Tsung-1-Yi No.11300068911 dated August 7, 2024, has amended some of the provisions of the ‘Value-Added and Non-Value-Added Business Tax Act’ (“BTA”) relating to issuance of electronic invoices. The amendments will be effective from January 1, 2025.

As per the amendments, the taxpayers issuing electronic government uniform invoices (“e-GUIs”) must transmit the e-GUIs and all related information to the E-Invoice platform of Ministry of Finance (“MoF”) for storage and verification within specified time limits, which are as follows:

In case of Business-to-Business (“B2B”) invoices – within 7 days; and
In case of Business-to-Consumer (“B2C”) invoices – within 2 days.

The MoF will be issuing detailed implementation rules regarding the transmission procedure, issuance of e-invoices, and the specific information required, etc.

Failure/ delay in complying with the e-invoice transmission timelines will attract a penalty between TWD 1,500 to TWD 15,000.

Implication:

Businesses must take necessary steps making changes in their systems and policies to enable transmitting of the e-GUI invoices to the E-Invoice platform within the timelines specified as per the requirements.

Thailand

Thailand: Lower standard VAT rate of 7% extended until September 30, 2025.

On September 17, 2024, the Thai government made announcement extending the reduced VAT rate of 7% (including local tax) for the sale of goods, services, and imports for an additional year. This lower rate will continue to be effective from October 1, 2024, until September 30, 2025.

Implication:

Businesses should take note of the continuation of 7% VAT rate and keep their systems up to date.

Thailand: Introduction of new documentation requirements for companies having share capital exceeding THB 5 million.

The Thai Department of Business Development (“DBD”) under the Ministry of Commerce issued Order No. 1/2567, superseding the previous Order No. 1/2566 which mandates stricter documentation requirements for companies with share capital exceeding THB 5 million threshold.

The new requirement, which is effective from July 1, 2024, applies to the following situations:

Incorporation of company with capital exceeding THB 5 million;
Capital infusion which results in increase in capital exceeding THB 5 million; and
Mergers/amalgamations.

Companies are required to submit a company confirmation letter from the directors in addition to a bank certificate in case of cash contribution. Where contribution is in the form of asset or services, a detailed description and ownership document of the asset or an employment contract or other labor related document in case of contribution in the form of services should be provided. The companies may be unable to provide confirmation for cash contribution due to all the directors being foreigner or for any other reason. In such a situation, an explanation should be provided. The documentation is required to be submitted with the company registrar within 15 days of the incorporation or capital infusion or merger/amalgamation.

Implication:

These changes aim to enhance transparency in capital contribution and companies should ensure the compliance with the requirements.

Turkey

Turkey: Deadline for County-by-Country (“CbC”) notifications amended.

Turkey’s Revenue Administration has issued Presidential Decision No. 8956, effective from September 1, 2024, modifying the deadline for submitting Country-by-Country (“CbC”) notifications. Previously, CbC notifications were required to be filed electronically by the end of June of the year following the reporting year. The new regulation now requires businesses to submit the notification within 6 months after the close of the reporting year. Notably, the deadline for submitting CbC reports remains unchanged at 12 months following the end of the fiscal year.

Implication:

Companies subject to CbC reporting should take note of the new deadline for CbC notification filing.

United Kingdom

United Kingdom: Process to update VAT registration details digitized effective from August 5, 2024

Effective from August 5, 2024, companies in the UK must inform HM Revenue and Customs (“HMRC”) of any changes to their VAT registration details exclusively through the VAT online account, rather than using VAT484 form and other postal or electronic methods. Considering that not all companies will be able to access the online platform, the HMRC has offered support to those that are digitally excluded or require assistance with digital services. However, companies unable to access the digital services, are exempt from the new process and hence can continue to file the changes through form VAT484, which can be obtained by sending a request to the HMRC. The intention behind this digitization is to make processes quicker, easier and more secure for the companies.

Implication:

Companies should comply with the new requirements and follow the applicable method for updating their VAT registration details with the HMRC.

US Office