Regulatory Updates – November 2020


Employees can take double annual leave at half pay till March 29, 2021

The Australian Fair Work Commission (“FWC) extended the duration of certain provisions entitling employees to 2 weeks of unpaid ‘pandemic leave’, thereby facilitating employees and employers to reach an agreement for the employee taking twice as much the annual leave at half pay till March 29, 2021. The benefit under these can be availed by any employer/employee covered by the award (regardless of the qualification of Job Keeper subsidies).

These provisions in the Clerks Awards will allow employees working from home, to work ordinary hours over a greater span than usually applies in the Award. Furthermore, an employer can agree with permanent employees to temporarily reduce ordinary hours of work for the employees by 25% if at least 75% of the employees agree.


The employers will have to modify the employment policies to enable the employees to take more annual leaves at half the pay due to the pandemic till March 29, 2021.

Federal Budget 2020-21 – Highlights

Federal Budget 2020-21 has brought some key taxation reforms. Following are the highlights:

  • The government will bring forth stage Personal Income Tax Plan by two years, with tax relief for lower and middle-income earners retroactively w.e.f. July 1, 2020. 2020-21, low-and middle-income earners will receive a one-off additional benefit of up to AUD 1,080 from the low and middle-income tax offset (“LMITO). The following are the changes:
  • the low-income tax offset will increase from AUD 445 to AUD 700; 
  • the top threshold of the 19% bracket will increase from AUD 37,000 to AUD 45,000; and
  • the top threshold of the 32.5% bracket will increase from AUD 90,000 to AUD 120,000.
  • For businesses with a turnover less than AUD 5 billion, they can now deduct the full cost of eligible depreciable assets (acquired between October 6, 2020, and first used/installed for use by June 30, 2022);
  • AUD 105 million in tax relief to be provided to small business; as a result of the small business turnover threshold being increased from AUD 10 million to AUD 50 million, tax concession access to small businesses has been expanded;
  • Temporary tax loss carry-back rules for entities having turnover of less than AUD 5 billion can apply tax losses acquired in the three income years up to June 30, 2022, against taxable profits derived in or later than the 2018/19 income year.

Note – As part of the 2018/19 budget, the Government had announced a 7-year personal income tax plan to lower taxes for individuals. This year the Government has announced that it will bring forward the second stage of the income tax plan from July 1, 2022, to July 1, 2020. The third stage of the income tax plan remains the same and will commence as planned in 2024/25.


Employee taxes will change considerably, and payroll will need to be adjusted accordingly to withhold the proper amount of taxes. 


Brazil proposes a new indirect tax CBS (‘Contribuição Social sobre Operações com Bens e Serviços’ or ‘Social Contribution on Operations with Goods and Services’) to replace the social integration programme (“PIS”) and the social security financing (“COFINS”) 

As a part of Brazil’s tax reforms, a new indirect tax CBS (Contribuição Social sobre Operações com Bens e Serviços i.e. Social Contribution on Operations with Goods and Services) is proposed to replace the social integration program (“PIS”) and the social security financing (“COFINS”) in Brazil.

The proposed tax rate will be at 12% and will be a part of replacing the current complex indirect tax system in Brazil.


The new tax will likely simplify extremely complex tax structures in Brazil (when implemented) 

Brazil’s General Law on Protection of Personal Data (Lei Geral de Proteção de Dados Pessoais – LGPD) is now in effect

Recently, the Brazilian General Law on Protection of Personal Data (Lei Geral de Proteção de Dados i.e. LGPD) has been made effective. However, the administrative sanctions under the law will be in force from August 1, 2021.

Brazil’s LGPD law is modeled after the European Union’s (“EU”) General Data Protection Regulation (“GDPR”). Brazil’s general law on the protection of personal data (“LGPD”) is as follows:

  • LGPD is having an extra-territorial effect like EU’s GDPR. Thus, it will apply to both companies which are based in and out of Brazil.
  • The LGPD will apply if the company/organization:
  • Processes personal data in Brazil;
  • Processes personal data that was collected in Brazil;
  • Processes personal data to offer goods or services in Brazil.
  • Similar to the EU’s GDPR, LGDP also provides for rights of individuals (data subjects) like rights of access, deletion, portability, etc. Additionally, LGPD provides people the right to access information about those entities with whom the respective individual’s data is been shared by the organization. Also, an individual has a right to know whether a piece of particular information is held by the organization.
  • An adequate level of data protection is required for cross-border data transfer.
  • Processing requirements are to be recorded.
  • Appointment of Data Protection Officer (“DPO”) by companies which are classified as “controllers” is required. However, there are no specific requirements for the qualifications of DPO.


Due to the implementation of LGPD, the data controller is required to have an adequate security process for protection of personal data of data subjects along with other additional compliances under LGPD like the appointment of Data Protection Officer (“DPO”), such as obtaining explicit consent, etc.


There are additional T4 slip (Statement of Remuneration Paid) reporting requirements for all employers for 2020 

The Canada Revenue Agency (“CRA”) has announced that all employers are required to comply with additional T4 Slip (Statement of Remuneration Paid) reporting requirements for the tax year 2020 to help the CRA validate payments under the Canada Emergency Response Benefit (“CERB”), Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency Student Benefit (“CESB”).

For the tax year 2020, in addition to reporting employment income in Box 14 or Code 71, employers are required to use new other information codes when reporting employment income and retroactive payments in the following periods:

  • Code 57: Employment income – From March 15 to May 9
  • Code 58: Employment income – From May 10 to July 4
  • Code 59: Employment income – From July 5 to August 29
  • Code 60: Employment income – From August 30 to September 26

Eligibility criteria for the CERB, CEWS, and CESB is based on employment income for a defined period. 

However, if the employer has already filed a T4 slip and summary for the year 2020 then there is no requirement to refile the T4 Slips.


There will be an additional reporting requirement for all employers, which needs to be completed by the specified dates.

Federal and Quebec: Updated Social Security Rates and Maximum Insurable Earnings for 2021

Updated social security rates and thresholds for 2021 will be as under –

ParticularsFor 2021For 2020 
Federal (Other than Quebec)
Employment Insurance (“EI”)
Maximum annual insurable earningsCAD 56,300CAD 54,200
Premium rates for employees1.58%1.58%
Premium rates for employers2.212%2.212%
Maximum annual employee premiumCAD 889.54CAD 856.36
Maximum annual employer premiumCAD 1,245.36CAD 1,198.90
Canada Pension Plan (“CPP”)
Maximum annual pensionable earningsCAD 61,600CAD 58,700
Basic exemptionCAD 3,500CAD 3,500
Maximum contributory earningsCAD 58,100CAD 55,200
Employer and employee contribution rate5.45%5.25%
Maximum annual employer and employee contribution CAD 3,166.45CAD 2898.00
Employment Insurance (“EI”)
Maximum annual insurable earningsCAD 56,300CAD 54,200
Premium rates for employees1.18%1.20%
Premium rates for employers1.65%1.68%
Maximum annual employee premiumCAD 664.34CAD 930.08
Maximum annual employer premiumCAD 650.40CAD 910.56


All employers will need to adjust the payroll of employees to reflect these changes. 

Separate Express Consent is not required for Cross-Border Data Transfers 

As per the decision of the Office of the Privacy Commissioner of Canada (“OPC”), under Canada’s data protection law, i.e. Personal Information Protection and Electronic Documents Act (“PIPEDA”), a separate express consent of data subject is not required when an organization is transferring the personal information outside Canada (i.e. Cross-Border data transfer).  

However, any organization using a third-party service provider (“outside Canada”) shall:

  • Provide individuals (data subjects) with appropriate notice of such cross-border data transfer;
  • Be accountable for the personal information while ensuring adequate protection from any unauthorized access, use, or disclosure through the related third-party service provider.


Though express consent is not required for cross border data transfer, it is recommended that the company obtains the express consent of the data subject for a cross border data transfer.

British Columbia (B.C.): A new requirement to maintain “Transparency Register” of Significant Individuals is beginning October 1, 2020

Last year, British Columbia (“B.C.”) introduced the “Transparency Register” of Significant Individuals of a company which is incorporated under the Business Corporations Act (British Columbia) (“BCBCA”). British Columbia (“B.C.”) has made it effective for maintaining a register for all private companies effective  October 1, 2020. However, wholly owned subsidiaries of reporting issuers (or reporting issuer equivalents) are exempted from the transparency register requirement.

The significant individual refers to those individuals, who owns (directly or indirectly) or has a beneficial interest in 25% or more of issued shares of the company or carry 25% or more of the rights to vote at the general meeting of the Company, or an individual who has the right (directly or indirectly) or the ability to exercise direct and significant influence on individual who has right to elect, appoint or remove one or more of the company’s directors. Companies must also include in their transparency registers individuals along with their spouses, parents, children, and other relatives who share the same home, and whose combined interests exceed the thresholds.

Each company has to keep the following information about each significant individual:

  • Full name, date of birth, and last known address
  • Whether they are a Canadian citizen or permanent resident of Canada
  • If they are not a Canadian citizen or permanent resident of Canada, every country or state of which they are a citizen
  • Whether they are a resident in Canada for the Income Tax Act (Canada)
  • The date when they become or cease to be a significant individual in the company
  • A description of how they are a significant individual

A private company must send notice to individuals within 10 days after their entry in the transparency register or they will cease to be a significant individual.

The transparency register must be updated within 30 days of receiving new or different information. The transparency register will be open to directors, regulatory ‎authorities, and specific inspecting officials but not to the public. A private company must keep its transparency register at its records office. There is no requirement to file the transparency register with the government.


Companies will need to identify the significant individuals, obtain and record the necessary information. 

The companies will have to update the register as required, within the specified timelines.

Ontario: There is an increase in the general minimum wage from CAD 14 per hour to CAD 14.25 per hour, effective from October 1, 2020

Under the Ontario Employment Standards Act, 2000, the general minimum wage has been increased to CAD 14.25 per hour from the previous CAD 14 per hour effective October 1, 2020, to September 30, 2021.

Canada Revenue Agency (CRA) increases taxable amount for overtime meal or allowance or meal portion of a travel allowance from CAD 17 to CAD 23 retroactively from January 1, 2020 

The Canada Revenue Agency (“CRA”) has raised the amount from CAD 17 to CAD 23 which an employer can use for determining whether the overtime meal or allowance or meal portion of a travel allowance is taxable.

CRA has also increased the rate from CAD 17 to CAD 23 per meal for transport employees and other individuals who can claim meal expenses using a simplified method i.e. a flat rate per person. 

Both will be effective immediately and retroactive from January 1, 2020.


The increase in the taxable amount will affect the reporting of the meal or allowance on the employee’s T4 slip by the employers, subject to conditions being met.


China’s tax authorities to collect social Insurance instead of Social Security bureau w.e.f. November 1, 2020

From November 1, 2020, funds for social insurance in Shanghai (and another 15 provinces including Beijing) will be collected by the Tax Bureau and not by the social bureau.  Note, this only affects those companies with their own social insurance accounts, and have the funds deducted from their bank.  If the client does not have its own social insurance accounts and instead uses the CIIC social insurance account, then this change will not impact the current process for which payment is made to CIIC.

Under the new process: 

  • Employee enrolment will continue to be handled by the Social Insurance Bureau. 
  • The need for sufficient funding available in the local bank (which is linked to social insurance payment) continues to be required.

A new “initial” two-step process is required to set up for funds to be deducted from the local bank account

  • The first step is to declare social insurance via an on-line tax bureau.  
  • The next step is for the tax agent to log into the website of the tax bureau (using their log in ID and password) and download an application, which then links up the company information to the tax bureau, and formally authorize and declare the social insurance data which has been loaded by the social insurance agent. 

Once the above-mentioned steps are completed, the funds will be approved to be drawn from the local bank account.


Effectively, this means social insurance will now be collected by the tax bureau instead of the social insurance bureau. To avoid any non-compliance and to have a smooth process of social insurance payments, the employer needs to consider the above-mentioned changes and modify its practices accordingly.

Czech Republic

Czech Data Protection Authority (“DPA”) fined a car dealer a fine of EUR 250,000 for repeatedly sending unsolicited commercial communications

The Czech DPA imposed the highest ever fine of CZK 6 Million (approx. EUR 250,000) on a car dealer for repeated distribution of unrequested commercial communication. Advertisement e-mails were sent by the used car dealer to almost 500,000 recipients without obtaining proper consent.


Good Practice guidelines containing the use of tracking technology issued by The French Data Protection Agency (“FDPA”) to be implemented by March 2021.

The French Data Protection Agency (“FDPA”) has published a “Recommendation” document and Guidelines concerning the use of tracking technology to be implemented and followed by every website editor.

The user has the right to be notified, according to the published guidelines, of the use of any tracking technology used by the website editor, with the option of either denying or approving the use of this tracking technology.

If the user continues to browse without choosing the option of either acceptance or rejection, as outlined above, this will be considered as deemed rejection from the user for using the tracking technology.

The website editor needs to retain the records of the user’s choices for six months as recommended by the guidelines. Websites’ editors should implement the “Good Practice” guidelines by March 2021.


Considering the Good Practice guidelines issued by FDPA, the website editors need to modify or alter their tracking technology to be in keeping with the published recommendations (i.e. tracking will only be allowed if the user accepts it and not if the user denies or even when the user does not take any action). Further, the website editor also needs to make sure that a proper system is in place for the recommended storage of the user’s choice.

A social security financing bill for 2021 was published for the discussion in parliament

The French government has published the Social Security Financing Bill (“The Bill”) for 2021 on September 29, 2020, for discussion in parliament. The same is expected to be approved by the parliament in December 2020.

The Bill has the below-highlighted measures:

  • Paternity leaves are doubled to 28 days (Previously 14 days).
  • Exceptional contribution to complementary health insurers is introduced during 2020 and 2021.
  • Coverage of telehealth consultations by Social Security until December 31, 2022.


The bill is still in the process of discussion. Once effective, employers need to consider the changes made and amend the relevant policies of the company.


New Data Privacy Guideline for Baden-Wuerttemberg (“DPA-BW”): Schrems II for Companies.

On September 7, 2020, the German data protection supervisory authority for Baden-Wuerttemberg (“DPA-BW”) issued new guidelines post the Schrems II judgment for the transfer of data to third countries. Following are the few recommended guidelines by Baden-Wuerttemberg (“DPA-BW”):

  • Keep an account of data transferred to third countries.
  • Companies must check and adapt their data privacy policies with regards Article 13(1)(f) of the GDPR, which states that data subjects must be informed, not only of the company’s intention to transfer their personal data to a third country but also of the specific transfer mechanism employed.
  • Companies should Instruct all data processors that transfer personal data to, or process personal data in, to maintain adequate data protection in accordance with GDPR.
  • Companies should be updated with third countries’ legal situation.


All companies processing or transferring data out of Germany will need to inform the data subject of the specific transfer mechanism employed.

Ceiling limits of maximum annual income will be revised for social security contributions from 2021

Pending final approval from the German Federal Council, the maximum annual income base for the calculation of social security will be changed. Following are the changes in the draft ordinance: 

  • For ‘general pension insurance’ and ‘unemployment insurance’, the maximum base is:
  • EUR 85,200 for Western Federal States 
  • EUR 80,400 for Eastern Federal States
  • For ‘health insurance’ and ‘nursing insurance’ the maximum base is EUR 58,050 for all federal states.

The changes will apply from January 1, 2021.


All employers will need to adjust the payroll of employees to effect these changes. 

H&M fined for EUR 35.2 Million under provisions of GDPR. 

On October 1, 2020, the Data Protection Authority of Hamburg (the “Hamburg DPA”) levied a fine of EUR 35.20 million for violation of data processing relating to the excessive monitoring of employees.


Companies (Amendment) Act, 2020: Decriminalization, reduction of fines and other related matters etc.

On September 22, 2020, the Indian parliament passed a bill to amend various sections of company law in India mainly focusing on easing compliance for law-abiding corporates, decriminalization of minor procedural offenses or technical lapses, and facilitating ease of doing business.

The bill amends 66 Sections of the Companies Act, 2013. The key amendments include:

  • The amendment allows payment of remuneration even in case of inadequate profits or losses to non-executive directors, including independent directors. This new provision is introduced which now allows non-executive directors including an independent director in a company to receive remuneration even if a company has no profits or inadequate profits as per the Companies Act, 2013 (“Act”).
  • Section 197 of the Act read along with the Schedule V to the Act provides for the computation mechanism of remuneration payable only for executive directors in case of inadequate profits. However, the law does not provide for any mechanism of remuneration of non-executive except for sitting fees, in case of inadequate profits.
  • The provision of Corporate Social Responsibility (“CSR”) is amended to allow companies to offset the ‘excess amount spent on the CSR activity’ (i.e. amount above the required 2% of average net profits in the preceding 3 financial years) in subsequent financial years. Further, to reduce compliance and operational cost, the constitution of the CSR committee is not required, where the amount required to be spent on CSR is below INR 5 million.
  • The amendment empowers the government to not levy penalty upon adjudication after issuing notice for non-filing of financial statements or annual return with the registrar if the same is filed within 30 days of the issue of notice. However, additional fees for default will continue to be levied.
  • A new provision under Section 129A is inserted which empowers the government to require a selected class of “unlisted companies” to prepare and file with the registrar, the financial results of the company, audit or limited review within 30 days of the prescribed period (which will be specified in the rules).
  • To promote ease of business and attract investment the amendment empowers the government to exempt any class of foreign companies from requirements under chapter XXII of the Companies Act, 2013. Chapter XXII prescribes certain procedures and rules to be followed by foreign companies upon establishment in India or rules for companies to be incorporated outside India.
  • A new provision is added which empowers the government to grant relaxation from complying with significant beneficial ownership rules and filing requirements for certain classes of companies.
  • An amendment is introduced which will empower the government to reduce the time of 15 days from the date the offer, within which the offer, if not accepted, shall be deemed to have been declined in case of ‘rights issue’.
  • A total of around 45 amendments are relating to the reduction or omission of penalty for minor offenses, for certain provisions punishment of imprisonment is substituted with a penalty or fines have been reduced or omitted wherein there are technical lapses.


  • The inconsistency in payment of remuneration in case of inadequacy of profits to executive directors vis-à-vis non-executive directors is now removed thereby allowing equity in the remuneration policy of the company.
  • Penalties may be waived off for non-filing of financial statements and annual returns with the registrar upon the adjudication. In case of unintentional non-compliance, a window of additional 30 days will be available to companies upon notice to complete filing.
  • Reducing penalties for procedural, technical, and minor non-compliances, especially the ones not involving subjective determinations will promote ease of doing business for companies.

Indian Parliament has passed the 3 key labor reform bills – The Code on Social Security, 2020; The Industrial Relations Code, 2020 and The Occupational Safety, Health and Working Conditions Code, 2020

Recently, the Indian Parliament has passed the 3 key labor reform bills. These include the Social Security code, 2020, the Industrial Relations Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020.

The Code on Social Security, 2020 replaces 9 laws related to social security (such as Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, Employees’ State Insurance Act, 1948, Maternity Benefit Act, 1961, Payment of Gratuity Act, 1972, etc.) to extend social security to all employees and workers in organized or unorganized or in any other sector.

The Industrial Relations Code, 2020 replaces 3 laws viz., The Trade Unions Act, 1926, The Industrial Employment (Standing orders) Act, 1946, The Industrial Disputes Act, 1947. The code is amended with an objective for quickly resolving disputes of the workers.

The Occupational Safety, Health and Working Conditions Code, 2020 replaces 13 laws such as The Factories Act, 1948, The Contract Labour (Regulation and Abolition) Act, 1970, etc. The code seeks to regulate the health and safety conditions of workers in establishments with 10 or more workers, all mines and docks.

The above mentioned 3 codes will now go to the President for his assent to become a law. The key highlights of the codes are as follows:

The Code On Social Security, 2020

  • The Code On Social Security, 2020 empowers the Central Government to make it applicable to any establishment or class of establishment. The rules in this regard are yet to be notified.
  • It requires the employer to register for Employees’ Provident Fund Organization (“EPFO”), if there are 20 or more workers, earlier it was only applicable to notified establishments. Also, an option for an organization is granted to register for EPFO even if the employer is having less than 20 workers.
  • Option for becoming a member of Employees’ State Insurance Corporation (“ESIC”) is also being given to establishments with less than 10 workers.
  • The code widens the definition of employees to include workers hired through contractors.
  • The code now empowers the government to defer or reduce the employer’s or employee’s contributions (under Provident Fund and Employees’ State Insurance) for a period of up to 3 months in the case of a pandemic, endemic, or national disaster.
  • The code prohibits contract labor in core activities, except where: (i) the normal functioning of the establishment is such that the activity is ordinarily done through a contractor, (ii) the activities are such that they do not require full-time workers for the major portion of the day, or (iii) there is a sudden increase in the volume work in the core activity which needs to be completed in a specified time. The appropriate government will decide whether an activity of the establishment is a core activity or not. 
  • The employers are now required to provide fixed-term employees the same service conditions, gratuity, leave, and Social Security as that of regular employees.

It has been made mandatory for all establishments with 20 or more workers to report the vacancy position in their establishments to such a career center as may be specified by notification. This information would be given on an online portal.

The Industrial Relations Code, 2020

  • An establishment having at least 300 workers is required to seek prior permission of the government before closure, lay-off, or retrenchment.

The Occupational Safety, Health and Working Conditions Code, 2020

  • The code will apply to establishments employing at least 10 workers.
  • The code will also apply to establishments or contractors employing 50 or more contract workers (on any day in the last year).
  • Occupational Safety & Health Code to also can now over cover workers from IT and Service Sector.
  • The 2020 Bill fixes the maximum daily work hours for workers at 8 hours per day.
  • The code also provides for extra wages for overtime work at the rate of twice the rate of wages where workers work more than stipulated working hours.
  • Free health check-up once a year by the employer for workers which are more than a certain age.
  • Every employer shall issue a letter of appointment to every employee on his appointment with such information and in such form as may be prescribed by the appropriate Government.
  • 50 % of the penalty in case of an accident to go to the workers along with other dues.
  • The code empowers the government to exempt contractors from the provisions of the Bill in case of an emergency through a notification.

All the new labor codes are likely to be implemented from April 1, 2021.


The change in labor laws will have a lot of effects mainly on manufacturing and low-income labor. However, there will be additional compliances/changes for all employers and the same needs to be analysed for each case to determine the changes in policies, remuneration, etc. 

India extends B2B e-invoices to all businesses April 2021 

India has implemented the electronic invoice system under the Goods and Service Act for larger businesses on B2B transactions having an annual sales turnover of INR 500 Crore or more from October 1, 2020.

For medium-sized businesses with annual sales turnover of INR 100 Crore, it will be mandatory to issue electronic invoices from January 1, 2021. Lastly, all businesses shall have to follow the e-invoice system from April 1, 2021, onwards. 


Businesses are required to be compliant with e-invoicing requirements for B2B transactions.

Ministry of Corporate Affairs (“MCA”) relaxation for Company Directors regarding residency requirement in India for at least 182 days for FY 2020-21

As per the Companies Act, 2013, every company shall have at least one director who stays in India for a total period of not less than 182 days during the financial year.

However, as per the general circular 36/2020, the Ministry of Corporate Affairs (“MCA”) has relaxed the residency requirement for the director of a company for the financial year 2020-21. Non-compliance with the minimum residency requirement shall not be treated as non-compliance for the financial year 2020-21.

India: Further extensions in due dates for furnishing Income Tax returns

As per the recent update, there will be a further extension in due dates for furnishing of Income Tax Returns, as follows:

  • The due date for furnishing of Income Tax Returns for the taxpayers (including their partners) who are required to get their accounts audited has been extended to January 31, 2021. (The original deadline as per the law was October 31, 2020)
  • The due date for providing income Tax Returns for taxpayers who are required to furnish a report in respect of international/specified domestic transactions has been extended to January 31, 2021. (Original deadline as per the law was November 30, 2020).
  • The due date for providing income tax returns for individual taxpayers has been extended to December 31, 2020. (The original deadline as per the law was July 31, 2020)
  • Consequently, the date for furnishing of various audit reports under the Act including tax audit report and report in respect of international/specified domestic transactions has also been extended to December 31, 2020.
  • The due date for payment of self-assessment tax for the taxpayers whose self-assessment tax liability is up to INR 100,000 has been extended to January 31, 2021, for the taxpayers whose accounts are required to be audited and to December 31, 2020, for the taxpayers whose accounts are not required to be audited. 

Atmanirbhar Bharat Package 3.0: Incentives for creation of new employments during COVID recovery phase

The Indian Finance Minister has announced the Atmanirbhar Bharat 3.0 (Part of COVID-19 Relief package). One of the measures in the package is to provide incentives for the creation of new employment in the COVID-19 recovery phase. The scheme will be operational until June 30, 2021.

  • Eligible beneficiaries (employees) under the scheme are as follows:
  • Any new employee joining in EPFO registered establishment on monthly wages less than INR 15,000;
  • An EPF member who exited employment due to COVID Pandemic from March 1, 2020, to September 30, 2020, and is employed on or after October 1, 2020.
  • Beneficial employers under the scheme are as follows:

The establishments registered with EPFO and those who have added new employees compared to reference base of employees as in September 2020 as under:

  • Minimum of 2 new employees if the reference base is 50 employees or less;
  • Minimum of 5 new employees if the reference base is more than 50 employees.

Here, establishments registering with EPFO after the commencement of the Scheme will also get subsidies for all new employees.

Under this scheme, the Central Government will provide the subsidy for two years in respect of newly eligible employees engaged on or after October 01, 2020, at the following scale: 

  • Establishments employing up to 1000 employees: 24% of wages (12% Employee’s contributions + 12% Employer’s contributions)
  • Establishments employing more than 1000 employees: Only Employee’s EPF contributions (i.e. 12% of “EPF” wages)
  • The subsidy support will get credited upfront in Aadhaar seeded EPFO Account (“UAN”) of eligible new employee

India: Changes in Leave Travel Concession/Allowance (“LTC/LTA”) – A scheme to convert tax exempt travel expenditure into a tax-exempt consumer expenditure

Due to the COVID-19 pandemic, employees are not in a position to travel anywhere in India to take advantage of the benefit of LTC/LTA. Therefore, recently, the Government has announced a scheme offering income tax exemption for LTC/LTA to non-Central Government employees without the need for them to travel subject to fulfillment of the following conditions –

  • Deemed LTC/LTA fare per person (round trip), subject to a maximum of INR 36,000, shall be allowed for income tax exemption.
  • The employee should spend a sum equals to three times of the value of the deemed LTC fare on the purchase of goods/services which carry a GST rate of not less than 12% from GST registered vendors’/service providers (i.e. specified expenditure) through digital mode during the period from October 12, 2020, to March 31, 2021 (i.e. specified period) and obtain a voucher indicating the GST number and the amount of GST paid.
  • An employee who spends less than three times of the deemed LTC fare on specified expenditure during the specified period shall not be entitled to receive the full amount of deemed LTC fare and the related income-tax exemption and the amount of both shall be reduced proportionately.
  • The employee exercises an option for the deemed LTC fare instead of the applicable LTC in the Block year 2018-21.

The above measure is introduced to stimulate consumer spending and capital expenditures and to help the growth of the Gross Domestic Product (“GDP”).


This is very useful for saving tax for employees. This will involve additional work for the payroll teams in obtaining and verifying the documents from the employees but can save a significant amount of taxes for all employees. 

Consolidated Foreign Direct Investment (“FDI”) Policy 2020: Key highlights

Recently, the Ministry of Commerce and Industry (the Department for Promotion of Industry and Internal Trade (“DPIIT”)) has announced its Consolidated FDI policy which is effective from October 15, 2020. For ease and convenience to foreign investors, DPIIT has compiled all the decisions that have been taken by the Government concerning FDI in the past three years. This policy supersedes all circulars/press notes/press releases issued by the DPIIT in the past.

Following are some of the key highlights of the Policy:

        Earlier in 2020, India has made some changes in FDI Policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic. According to the note issued earlier this year, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defense, space, atomic energy, and sectors/activities prohibited for foreign investment.

In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the above Para, such subsequent change in beneficial ownership will also require Government approval.

The above-mentioned restrictions are now included in the consolidated FDI policy.

  • An investment limit of 26 % has been introduced and imposed on FDI in digital media (uploading or streaming of news and current affairs through digital media) including the likes of web-based content. This can be done only via the government approval route.

        100% FDI under automatic route is permitted in the marketplace model of e-commerce (i.e. providing an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller). FDI is not permitted in the inventory-based model of e-commerce (i.e. e-commerce activity where an inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly).

        E-commerce marketplace entities with FDI shall have to obtain and maintain a report of statutory auditor by 30th of September every year for the preceding financial year confirming compliance with the e-commerce guidelines. This compliance requirement was first introduced in 2019.


Increase in unpaid parental leave w.e.f. September 01, 2020, from 22 weeks to 26 weeks.

Effective from September 1, 2020, Ireland has increased the unpaid parental leave. The leave will be increased from 22 weeks to 26 weeks per parent per child below the age of 12 years, or where the child is disabled and below 16 years of age.

Note that, a new parent or an individual acting in loco parentis can claim parental leave but the leave shall be taken in a consistent period or blocks of at least six weeks unless agreed otherwise.


The employers without having to bear any additional cost can grant employees parental leave from September 1, 2020. Accordingly, the employer will have to update and change the company policies, and employment contracts of the employees.

Sick Leave and Parental Leave (COVID-19) Bill 2020 to provide paid sick leave to employees

The Sick Leave and Parental Leave (COVID-19) Bill 2020, if passed, would give employees in Ireland the legal right to paid sick leave for the first time. It also proposes paid leave for employees whose children must stay at home from school due to COVID-19 measures.

Employees have no legal right to sick pay in Ireland. Some employers may decide to pay their employees during sick leave but, if they do, the duration and level of pay are at the employer’s discretion.

The bill provides that after four weeks’ service, employees will be entitled to sick pay for a continuous period of six weeks, or 30 days in any period of 12 months, for any day that they are incapable of working as a result of illness or injury. Sick pay will be paid at the same rate as annual leave. There is no waiting period set out in the bill, so employees would be entitled to sick pay from the first day of illness or injury. 


Sick Leave and Parental Leave (COVID-19) Bill 2020, if passed will enable employees’ right to paid sick leave. The employer will have to assess the changes which he will be required to make in employment agreements, company handbooks, payroll policies, etc. if the bill is passed.


The Italian data protection authority (‘Garante’) has levied fine on various companies in violation of GDPR

  • Garante fines a private hospital EUR 80,000 for disclosing data of job applicants and Scanshare with EUR 60,000 for failing to handle data of those job applicants in line with GDPR

The Italian data protection authority (‘Garante’) fined a private hospital a fine of EUR 80,000 on September 30, 2020, for violation of GDPR. Azienda Ospedaliera di Rilievo Nazionale ‘Antonio Cardarelli’, a private hospital, disclosed online personal data of candidates applying for a job there. It failed to provide adequate security even though the applications were managed by a company named Scanshare, it is the primary responsibility of the data controller to implement appropriate technical and organizational measures guaranteeing data security.

The Italian data protection authority on September 30, 2020, also Scanshare s.r.l. EUR 60,000. The company was outsourced with the job of handling candidates’ online submissions (job applicants whose data privacy was breached).

There was a mistaken configuration for which this company was responsible as a result of which access to documents presented by other candidates, containing their personal data was easily allowed. In such a manner, the data of more than 2,000 candidates were exposed for a period of 25 days 

Thus, both the hospital and Scanshare were fined for violations of GDPR Art. 5(1)(f) (principle of integrity and confidentiality) and GDPR Art. 32 (security of processing).

  • Garante fines polyclinic ‘Università Campus Bio-medico di Roma’ EUR 20,000 for disclosing medical online reports

The Italian data protection authority on October 26, 2020, fined polyclinic ‘Università Campus Bio-medico di Roma’ EUR 20,000 for violating Articles 5(2)(a) and (f) and 9 of the General Data Protection Regulation (Regulation (EU) 2016/679) (‘GDPR’), as well as Article 75 of the Personal Data Protection Code. This fine was due to the incorrect integration of two IT systems.  As a result, a breach of 39 patient medical records occurred through a smartphone, and another 74 patients had their reports and a list of medical exams were breached under GDPR provisions.

Italian businesses required to file beneficial ownership information by March 15, 2021 

In Italy, Legislative Decree 231/2007 transposing the EU anti-money laundering directive mandates business entities such as commercial enterprises, limited liability companies, limited partnerships, joint-stock companies, etc. to file information regarding beneficial ownership (“UBO”) by March 15, 2021. For, newly entities incorporated, the information will be required to be filed within 30 days of the incorporation date.

The filing is required to be done by the directors or managers of the company, founder or administrators of trusts, etc.

The information to be filed is as under:

  • Name of the beneficial owner;
  • Address or ‘place of residence’ of the beneficial owner; and
  • Domicile of the beneficial owner.

The information collected should be verified and it must contain the registered address of the organization, Italian tax code number, place of business, etc.

The filing information for the commercial entities should include the following:

  • Ownership percentage of the capital of the company;
  • Source and nature of power to control the entity;
  • Source and nature of authority to legally represent the entity, etc.


  • The legal entities such as commercial enterprises, limited liability companies, limited partnerships, joint-stock companies, etc. will be required to identify their UBO’s properly;
  • The entities will have to put in place a mechanism for identification and reporting the UBO upon changes occurring in the shareholding pattern. Letters to shareholders informing the same will be required to be sent.


Amendments to Japan’s data privacy law in line with Europe’s GDPR; Changes to be effective latest by first half of 2022.

The country has recently amended its Protection of Personal Information (“APPI”) Act on June 05, 2020. The amendments are expected to fully take effect in the last quarter of 2021 or the first half of 2022, the following are the highlights:

  • The amendment expands the data subject’s rights, it specifies rights to disclose; correct, add, or delete; cease the use of or erase, or cease providing personal data to third parties. 
  • Upon breach resulting in the violation of individual rights and interests, the company is required to immediately inform the individual and Personal Information Protection Commission (‘PPC’) about the breach. In case, informing the individual is difficult, a public announcement regarding the same can be made.
  • The breaches will now be required to be reported using an official form, rather than by mail or fax, as before.
  • Now, if the personal data is already transferred to third parties on an opt-out basis, any further transfer is prohibited on the same clause. 
  • The concept of ‘pseudonymization’ has been introduced. However, consent is still required for the transfer of pseudonymized data to a third party in case it becomes identifiable in the hands of the third party.
  • The amendments clarify the scope of cross-border transfer of data. Even though the amendment does not require a change in cross-border data flows, it clarifies that entities outside of Japan are subject to the law.
  • The penalties stand substantially increased. Penalties for organizations can be as high as JPY 100 million.


  • Businesses in Japan obtaining personal information from data subjects, processing or handling of personal data will have to comply with additional compliances, reporting obligations, an undertaking of specified processes, updating of company policies.
  • Additional documentation will have to be undertaken by the employers. Record maintenance of consent received for sharing of information and data transfer will have to be undertaken as proof.
  • The organizations will have to appoint personnel and draft data protection policies as per the changes in the act, implement access controls, assign proper permission as to who gets access to sensitive data, etc.


Dutch UBO declaration online form is now available at Dutch Chamber of Commerce (KVK) website w.e.f. September 27, 2020

The UBO declaration in the Netherlands can now be submitted online via the Dutch Chamber of Commerce (“KVK”) website w.e.f. September 27, 2020, with the following link:

The declaration is to be submitted in 4 steps as follows:

  • First, the organization has to be selected;
  • Secondly, the UBO statement needs to be compiled;
  • Thirdly, the attachments need to be uploaded; and
  • Lastly, the form needs to be signed and sent.

Specific UBO details required for registration

The following information will be required for submitting the UBO declaration:

  • Name of the UBO;
  • Date of birth (including month and year of birth);
  • Place of birth, country of birth, and home address;
  • Country of residence and nationality;
  • Dutch citizen service number (“BSN”) – BSN is a unique personal number for everyone who is registered in the Dutch Personal Records Database (“BRP”);
  • UBO’s tax identification number (foreign tax identification number, if any);
  • Nature and extent of the shareholding, voting rights, economic interest, or actual control by the UBO (shareholding or voting rights or ownership interests in bandwidths from 25% to 50%; 50% to 75%; or 75% to 100%);
  • Start date of the current interest (whether on or before September 27, 2020, exact date will be required to be provided if the person has acquired the stake after September 27, 2020), etc.
  • A request for protection of personal data of UBO can be made in case the UBO is a minor, is under guardianship or administration, or has police protection.

Specific UBO documents required for registration

The following documents will be required to be obtained from the UBO to provide proof of personal details:

  • Passport copy;
  • Tax identification number or Citizen service number;
  • Dutch driving license copy; or
  • Dutch immigration document;
  • Copy of identity card of the UBO, etc.;
  • Documents representing the nature and extent of the economic interest held by the UBO. (e.g. copies of registers of shareholders, articles of association, instruments of incorporation, organizational, contracts, etc.).

The Netherlands budget 2021- General corporate tax rate to remain at 25%; Corporate tax for small companies to be reduced from 16.5% to 15%

The Dutch government published the Dutch budget proposals for the fiscal year 2021 and the final version of it is expected to be enacted by December 2020. Below are the highlights of what you can expect from the Netherlands budget 2021.

Corporate income tax rates

The Budget 2020 had postponed the reduction of the higher corporate income tax (“CIT”) rate to 2021. The budget for 2021 will continue with the top rate at 25%. However, the “basic rate” will be reduced to 15%. The threshold of the first bracket for the basic rate is increased from EUR 200,000 to EUR 245,000. The rate structure for 2021 (as against the rate structure for 2020) will be as follows 

Taxable amount
up to EUR 200,000
Taxable amount from EUR 200,00025.0%
Taxable amount
up to EUR 245,000
Taxable amount
from EUR 245,000

Wage and income tax

Personal income tax rates

The basic income tax rate on incomes of up to EUR 68,507 will be decreased from 37.35% to 37.10% in 2021.


The Netherlands plans to implement the EU VAT Directive on e-commerce by July 2021 simplifying VAT rules for distance selling of goods. 


  • Reduction in lower tax rates will lower the burden of corporate taxpayers. Also, with an increased threshold more taxpayers will be able to avail the benefit of a lower tax rate.
  • Individual taxpayers having income up to EUR 68,507, will also benefit from a decrease in the basic income tax rate from 37.35% to 37.10%.

The grace period for reporting requirements for employers w.r.t. employed foreign worker in the Netherlands ends w.e.f. September 1, 2020; Penalty range between EUR 1,500 and EUR 4,500 for each employee not reported

As per the Posted Workers in the European Union (Working Conditions) Act, all the employers (in the EU/EEA and Switzerland) having Non-Dutch Employees Working temporarily in the Netherlands were required to give notice in advance to the government. 

The grace period for which was granted till September 1, 2020 ends, and from now on the following penalties will be levied in case of non-compliance:

The penalties may be imposed on both the foreign employer and the Dutch contracting party if they do not fully comply with the conditions of the Posted Workers in the European Union (Working Conditions) Act.

  • The penalty for foreign employers who do not timely report is – a minimum of EUR 1,500 up to EUR 4,500 per employee for non-reporting on time.
  • Dutch contracting parties are also liable to a penalty of EUR 1,500 upon not verifying a notification or failing to do so, on time.


Failure to report about having Non-Dutch Employees working temporarily in the Netherlands will have penal consequences. The penalty which the organization will have to pay will be based on each employee’s non-reporting on time.


New changes introduced to Work Injury Compensation Act (WICA) effective from September 1, 2020 

The Ministry of Manpower (“MOM”) has issued certain changes to be made to The Work Injury Compensation Act (“WICA”).  The set of such key changes are effective from September 1, 2020, and includes:

  • Reporting of leave availed/taken on the account of work injury including light duties
  • Employers need to be notified of the accident for consideration of claims.
  • Compensations can be based on a multiple of basic monthly salary and current incapacity assessment.
  • Employers are liable to compensate for the shortfall in earnings when their employees are on light duties.
  • Switching of doctors may be allowed for current or permanent incapacity assessment.
  • Greater recourse for employers to recover compensation paid out on basis of error or fraud.
  • Increased penalties for offenses.


The employers should familiarize themselves with the new changes and engage early with their WIC insurance providers.

Singapore increases minimum qualifying salary and advertising period for foreigners applying for E-pass/S-pass to promote employment opportunities for locals.

The Ministry of Manpower (“MOM”) for promoting employment among locals has created stricter requirements for Employment Pass (“E Pass”) Holders and S Pass Holders, i.e. for foreigners in Singapore. The changes for E pass holders and S pass holders respectively include the following:

  • E Pass holder – The minimum qualifying salary for obtaining the E Pass is increased from SGD 3,900 to SGD 4,500 applicable w.e.f. September 1, 2020. The effective date of such change in salary is May 1, 2021, in case of renewal of existing E pass holders.
  • S Pass holder – The minimum qualifying salary for obtaining the S Pass is increased from SGD 2,400 to SGD 2,500 w.e.f. October 1, 2020. The effective date of such change in salary is May 1, 2021, in case of renewal of existing S pass holders.
  • Further, under the current Fair Consideration Framework (“FCF”) regime, employers are required to advertise the job vacancy on the government website before hiring foreign employees. The advertisement is to be posted 14 days before hiring foreign employees. Earlier the FCF advertisement requirements were only applied to Employment Pass applications. But from October 1, 2020, this requirement will also apply to S Pass applications.


Employers planning to employ foreigners on E-pass/S-pass should be aware of these changes and revise their foreign employees hiring policy accordingly.

Proposed Changes to the Personal Data Protection Act 2012 (PDPA)

The Personal Data Protection (Amendment) Bill (“Bill”) was tabled in Parliament on October 5, 2020, for the first reading. The Bill is expected to be passed before the end of the year if not sooner. The employer must be ready to comply with the new requirement once the bill is passed as there .will be no buffer time for compliance

Some of the significant changes to PDPA include the following:

  • Individuals and the Personal Data Protection Commission shall be notified on the account of a data breach;
  • Expansion of the framework of Deemed Consent in specific circumstances;
  • Express Consent is not required when the information collect, use and disclose for legitimate interests and business improvements;
  • The financial penalty has Increased up to 10% of the annual turnover of the organization with an annual turnover exceeding USD 10 million, or SGD 1 million, whichever is higher;
  • Individuals have new rights of data portability that will obligate the information controller to transmit the data of the individual.


Employers should comply with the new changes to PDPA obligations once the changes become effective.

Singapore Personal Data Protection Commission imposed a fine of SGD 20,000 on Civil Service Club for failure to implement safety arrangements for protection of personal data of its members.

The Personal Data Protection Commission (“PDPC”) of Singapore on September 10, imposed a fine of SGD 20,000 on Civil Service Club (“CSC”) because of the failure to implement safety arrangements for the protection of personal data of its members.


Spain passes Royal decree-law 28/2020 on remote work; Remote workers to have the same rights as workers working in company premises

The Royal decree-law 28/2020 on remote work was published in the Spanish Official Gazette (“BOE”) on September 22, 2020. The law will take effect 20 days from its publication in the BOE, that is, w.e.f. October 12, 2020.

The law aims at ameliorating the conditions of remote workers. The remote workers will now be granted the same rights as those who carry out their activities on the company’s premises. It will be based on the employment agreement. The regular distance work is defined as “that which is provided in a reference period of three months, at a minimum of 30% of the working day or the equivalent proportional percentage depending on the duration of the employment contract.”

The law emphasizes the remote working agreement between the employer and the employee. The remote working agreement must be in writing. Companies with employees who are currently working remotely must formalize the remote working agreement by December 23, 2020 (i.e. three months from publication). The agreement must be of a “voluntary nature” and must state the beginning and the end of the working day,  including the periods of activity to be carried out. 

The employee and the employer will need to sign the distance working agreement.  The working agreement should be: 

  • Formalized in writing, 
  • Registered at the employment office and 
  • Delivered to the legal representation of working people.

The refusal of the worker to work remotely, the exercise of reversibility to face-to-face work and the difficulties for the adequate development of the telework activity, which are exclusively related to the change from a face-to-face service to another that includes work at a distance, will not be grounds for the termination of the employment relationship or the substantial modification of the working conditions.

Throughout the regulation, the role of collective bargaining is reinforced, with express referrals as important as the regulation of the exercise of reversibility (return to face-to-face work after agreeing to work remotely) by the parties, the right to disconnect, the identification of the jobs and functions that can be carried out through remote work, the conditions of access and development of work activity through this organizational model, a maximum duration of remote work, as well as additional content in the remote work agreement. It also discusses the main rights such as the right to payment, compensation for expenses, right to privacy and data protection, as well as the right to digital disconnection outside of working hours.

In addition, in cases where companies provide remote working options in exceptional situations such as health emergencies, the employer will be mandated to provide means, equipment, and tools, as well as maintenance costs to the remote workers. The same will be provided in the collective bargaining agreements.


  • The new law will result in more cases classified as remote working. Certain flexible working situations which were excluded until now will be henceforth classified as remote working with all its consequences. This could discourage companies from considering the approval of remote working or flexibility plans at large as an option now or in the future.
  • The newly introduced equality of rights would require the company to review their hiring and employment policies; The employer will have to maintain parity in terms of salary, work-life balance measures, privacy and non-discrimination, training and professional promotion between employees working remotely and those working in office premises. Reversibility conditions for changing from remote to on-site work will have to be included in the agreement as per the collective bargaining agreement or the remote working agreement.
  • Careful consideration will have to be given to the data protection rights of the workers; The employer can verify or monitor work-related compliances subject to maintenance of their dignity, privacy, and right to data protection and digital disconnection.
  • New compliance agreements will have to be considered. The agreement (in writing), will have to be furnished to the workers’ legal representatives and also to the employment office;

The Spanish data protection authority fines various companies for violation of the General Data Protection Regulations

  • The Spanish data protection authority fined “Centro de Investigation y Estudio para la Obesidad” with EUR 50,000 for unlawful data transfer

The Spanish data protection authority (‘AEPD’) on October 9, 2020, fined “Centro de Investigación y Estudio para la Obesidad” with EUR 50,000 for unlawfully transferring the personal data of the claimant to Evo Finance EFC, SA, for processing of a medical insurance claim which allowed for the identification of the claimant. The medical treatment in question was never carried out. It was held that Centro de Investigación y Estudio para la Obesidad had violated Article 6 of the General Data Protection Regulation (Regulation (EU) 2016/679) (‘GDPR’)

  • The Spanish data protection authority fined “Lycamobile” EUR 60,000 for processing personal data without a legal basis

The Spanish data protection authority (‘AEPD’) issued, on October 6, 2020, to Lycamobile SL, a fine of EUR 60,000 for violating Article 6(1)(a) of the General Data Protection Regulation (Regulation (EU) 2016/679) (‘GDPR’). The company had carried out the processing of personal data without a legal basis. The personal data of prepaid phone card users was obtained without their consent for processing it.

The user data in the company’s records did not match the actual data of the users/owners of the phone card.

  • The Spanish data protection authority fined “GLP Instalaciones 86, SL” with a fine of EUR 60,000 for processing the claimant’s name, last name, phone number, bank account details, and email without a valid legal basis.

The Spanish data protection authority (‘AEPD’) published, on September 22, 2020, fined GLP Instalaciones 86 SL with a fine of EUR 60,000 for violating Article 6(1) of the General Data Protection Regulation (Regulation (EU) 2016/679) (‘GDPR’). The claimant had contacted Naturgy Energy Group S.A. for air conditioning system installation when his personal data was collected during the call. After which he was contacted by two different companies calling themselves as Naturgy collaborators. One of which was GLP Instalaciones 86, and it was neither an authorized installer nor a Naturgy’s collaborator. This violated the principle of the lawfulness of processing under GDPR, as the claimant’s name, surname, telephone number, bank account details, and email, among other information, were processed without a valid legal basis.

  • The Spanish data protection authority fined “Vodafone España, S.A.U.” EUR 30,000 for incorrect assignment of customer contracts and thereby charging an invoice wrongly to a customer

The Spanish data protection authority fined “Vodafone España, S.A.U.” EUR 30,000 for the processing of personal data of a data subject without sufficient legal basis. There were errors in the correct assignment of customer contracts. In this case, Vodafone demanded a debt from a data subject. The company sent a bill of EUR 56.88, requesting the payment for a service contract carried out without the claimant’s consent. In fact, it was identified that the claimant had never activated such service, but the amount was charged as a result of incorrectly assigning the customer’s data.

  • The Spanish data protection authority fined “Vodafone España” EUR 36,000 for illegitimate data processing

The Spanish data protection authority (‘AEPD’) on October 21, 2020, fined Vodafone España, S.A.U. in another case for EUR 36,000 for a violation of Article 6(1) of the General Data Protection Regulation (Regulation (EU) 2016/679) (‘GDPR’). In particular, Vodafone processed the claimant’s personal data illegitimately, as it was incorporated into the company’s information system without obtaining prior consent for its collection and subsequent processing.

  • The Spanish data protection authority fined “Iberia” EUR 30,000 for failure to provide users with the option to reject all the cookies, for lack of brevity and transparency of information regarding cookies provided on the website, and non-identification of third-party cookies.

The Spanish data protection authority (‘AEPD’) on October 21, 2020, fined EUR 30,000 on Iberia, Líneas Aéreas de España, S.A. for violating Article 22(2) of Law No. 34/2002, on Information Society Services and Electronic Commerce. The users had to accept cookies if they wanted to continue browsing on the website. The AEPD found that Iberia’s website’s cookie banner did not conform to the recommendations of the ‘Guide on Cookies’ from November 2019 and the cookie policy requirements under the GDPR. The information in the first layer of the website was not concise, transparent, or intelligible, in addition, the second layer contained no option to reject all cookies. Also, the website failed to identify third-party cookies.


The budget bill 2021: Tax reduction for earned income, temporary tax reduction for low income earners, and a reduction in taxes for people over age 65.

On September 21, 2020, the government submitted its budget bill to the Riksdag. Following are key highlights of the Budget bill:

  • Tax reduction for earned income:
  • A tax reduction is proposed for earned income up to SEK 1,500 per person per year.
  • It will apply to both categories i.e. earned income and income from social insurance benefits.
  • The tax reduction is stepped up and the maximum amount is proposed to apply to those who earn SEK 240,000 per year or more.
  • Temporary tax reduction for low-income earners:
  • To deal with increased labor costs as a result of the covid-19 pandemic, the government is announcing a temporary tax reduction for earned income.
  • The tax reduction is intended to have a clear low-income earner profile and be completely phased out for earned income amounting to SEK 50,000 per month.
  • The tax reduction has been proposed to apply during 2021 and 2022.
  • Reduction in tax for people over 65 years of age – The basic deduction is raised for everyone having income between SEK 213,000 and SEK 1,418,000 per year.
  • The employer contribution is reduced temporarily for persons between the age group of 19 to 23 years old.  A reduction is given to companies that do not have an employee and that employ one or two people, as well as to companies with one employee that employs another person. The proposed reduction will apply to the employee during the period -July 1, 2021, until December 31, 2022.
  • The deferral interest rate for deferred tax on profits from home (domestic) sales will be removed next year. It will cover both future and existing deferrals.
  • The budget bill announces that the tax exemption should be introduced for food gifts given to employees in connection with the COVID-19 pandemic and forest fires of 2018. The proposal will be effective from January 1, 2021, and will apply retrospectively to benefits provided after February 29, 2020.


Switzerland to mandate statutory paternity leave of two weeks

The Swiss parliament approved paid paternity leaves of two weeks. The new fathers are now eligible for paid leave paternity starting January 1, 2021, financed by income compensation allowances (APG). The employee taking the leave will be eligible for up to 80% of their gross monthly pay up to CHF 196 per day.


The provision excludes leave for adoption and leave to the biological father of the child whose mother is married to another man.


An eligible person can take 10 days of paternity leave or less. An eligible person can take paternity leave either in the form of:

  • Single working days (up to 10 days); or
  • A block of two weeks (14 days).

The total number of daily allowances is 14 whether the leave is taken in the form of isolated days or each block of five days. The paternity leave must be taken within six months of a child’s birth.


  • The APG contribution rate will be increased from 0.45% to 0.50% of the employee’s gross salary.
  • There will be additional costs for the employer.
  • Also, revisions in the employment contracts of male employees and leave policy will be required.

Switzerland amends the employment Act; 11 hours of break to be granted to employees after return from international business trips w.e.f. November 1, 2020

The Federal council of Switzerland amended Ordinance 1 to the Employment Act. The following are the highlights of the amendment to be effective from November 1, 2020:

  • A break of 11 hours is to be allowed to an employee returning from a business trip abroad. The professional activity they undertake, and mode of transport remain irrelevant;
  • A working week has now been defined as “a working week to begin at 00:00 on Monday and end at 24:00 on Sunday.”
  • The employees cannot work for more than three nights in a row in addition to working hours of a maximum of 10 hours (out of 12 hours’ period).
  • A medical examination and advice are now required for all young employees working at night on a continuous or regular basis, every two years. This examination can be combined with a medical-fitness-to-drive examination.
  • The employee will be entitled to extra pay and substitute rest times for work performed on Sundays or public holidays.
  • The compensation payable for the rest period will be 50%.


  • Now an employee can work maximum up to only three nights in a row.
  • Employers will have to provide a mandatory 11-hour break for employees returning from international business travel.
  •  Employers will need to update, prepare, and revise their work rules, break policies, handbooks, etc. for the changes.

United Kingdom

Brexit: New VAT treatment applicable to foreign taxable persons for sale of goods from January 01, 2021

In a post-Brexit scenario, effective from January 1, 2021, UK VAT will be made applicable for the sale of goods by foreign taxable persons. United Kingdom (UK) has announced the new treatment for VAT applicability (i.e. equal treatment to both foreign and British taxable persons while selling goods to customers in the UK). 

Foreign taxable persons (both EU and non-EU) will be required to have VAT registration and related obligations from January 1, 2021. However, Northern Ireland will have different rules and the above-mentioned changes will not become applicable as it will have separate measures.   


  • Every business will need to check and verify the applicability for VAT registration and other obligations for their business operations in the UK.
  • Additional tax compliances and tax liability may occur for the sale of goods to customers in the UK. 

UK Companies House allows temporarily suspended voluntary strike off action from September 10, 2020

UK Companies House has lifted the temporary suspension of voluntary strike-off action from September 10, 2020. Thus, the companies that have filed for a strike-off process before July 2020 will be struck off from the register in a phased manner over 4 weeks starting from September 10, 2020.

UK Companies who have applied to be struck off from July 2020 will have the voluntary strike-off process as normal after the initial 4-week period.

Additionally, the UK Companies House has initiated the compulsory strike-off process from October 10, 2020 for those companies which are no longer carrying on business or in operation.

Business who opted to defer VAT between March to June 2020 will have the option of repaying it over 11 months

UK businesses who have opted to defer VAT for the period between March 2020 and June 2020, now have an option to repay their deferred VAT payments in smaller and interest-free payments over 11 months instead of paying it in a lump sum payment by March 2021.

These smaller payments option is available by opting for a scheme and such VAT payments can be paid until the end of March 2022. Although, the UK businesses who can pay the deferred VAT in a lump sum can do so on or before March 31, 2021.   


UK businesses now have extra time to repay their VAT dues for the specified period. 

Data Protection fines for various offenses

The Information Commissioner’s Office (“ICO”) of the UK has levied a fine of GBP 130,000 to Swansea company CPS Advisory Ltd for making unauthorized marketing calls to people regarding their pensions. 

The Information Commissioner’s Office (“ICO”) of the UK has levied a fine of GBP 60,000 on Digital Growth Experts Limited for sending nuisance marketing texts during the coronavirus pandemic.

The Information Commissioner’s Office (“ICO”) has levied a fine of GBP 20 million on British Airways due to its failure in the protection of personal and financial details of more than 400,000 customers. The airline company had insufficient technical and organizational measures to ensure information security which is required under EU’s GDPR.

The UK’s Information Commissioner’s Office (“ICO”) has issued a notice for levying a fine of GBP 18.4 million on Marriott International Inc. due to a cyber-incident that happened because of inadequate security measures and due diligence. The data breach incident has exposed the guest records globally including records related to the UK and European Economic Area (EEA) residents.

The UK’s Information Commissioner’s Office (“ICO”) has fined Reliance Advisory Limited for GBP 250,000 for sending nuisance calls over a period of 6 months starting from 2019. The fine was levied as the data subject’s consent has not been freely given, specific, or informed. It was regarded as a violation of regulation 21A of the Privacy and Electronic Communications Regulations 2003 (‘PECR’) and under Section 55A of the Data Protection Act 1998. 

The UK’s Information Commissioner’s Office (“ICO”) has issued an enforcement notice and a monetary penalty of GBP 40,000 on Studio MG Limited for sending unlawful marketing emails to individuals without their permission. 

United States of America


Employer credits for businesses during COVID-19 

Internal Revenue Services (“IRS”) has introduced several employer credits to support business owners during this unprecedented time of COVID 19.  The IRS also has highlighted the eligibility criteria for these credits. 

Following are the credits introduced to help the business owners:

  • Employee Retention Credit

This credit is for providing support to the business to help retain the employees on the payroll irrespective of its size including tax-exempt organizations. There are two exceptions to this:

  • State and local governments and their instrumentalities 
  • Small businesses who take small business loans

The refundable tax credit is 50% up to USD 10,000 in wages paid. There are a few qualifying conditions for availing the credit: 

  • The business is fully/partially suspended due to COVID-19.
  • The company’s gross receipts are below 50% for the comparable quarter for the year 2019. The disqualification limit is beyond 80%. 

Calculation of these measures will be done in each calendar quarter by the employer.

  • Paid Sick Leave Credit and Family Leave Credit:
  • Sick Leave Credit – The Employer can get Paid Sick Leave Credit for an employee if he is not able to work (including telework) due to Coronavirus quarantine, self-quarantine, or is undergoing medical treatment for having Coronavirus symptoms. Employees are entitled to paid sick leave up to 10 days/up to 80 hours at the regular rate of pay up to USD 511 per day and USD 5,110 in total.
  • Carer or Child’s Care Credit – The employer can also receive the credit for employees who are unable to work due to caring for someone affected by Corona Virus or caring for a child because the child’s school or place of care is closed. Employees are entitled to paid sick leave for up to two weeks/up to 80 hours at 2/3 the employee’s regular rate of pay or, up to USD 200 per day and USD 2,000 in total.
  • Family Leave Credit – Employees are also entitled to paid family and medical leave equal to 2/3 of the employee’s regular pay, up to USD 200 per day and USD 10,000 in total. Up to 10 weeks of qualifying leave can be counted towards the Family Leave Credit.

Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ wages by the amount of the credit.

All eligible employers are entitled to immediate receipt of the credit in the full amount of the required sick leave and family leave along with related health plan expenses and the employer’s share of Medicare tax on the leave, from April 1, 2020, to December 31, 2020. 


The eligible employer can use the credits introduced by the IRS to support the business during this current pandemic. 

Deferral from payment of employer’s shares of Federal Insurance Contributions Act (FICA) taxes under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

Employers are allowed to defer the payment of employer’s shares of Federal Insurance Contributions Act (FICA) taxes (6.2 percent) for the remaining year of 2020 (i.e. from March 27, 2020, to December 31, 2020) under the CARES Act. The deferred amount of Employer’s share of FICA taxes will be paid as follows:

  • 50% of the deferred amount will be paid by December 31, 2021; and
  • Balance 50% of the deferred amount will be paid by December 31, 2022


The said relaxation shall help the employer to bring more liquidity to boost the business which is hampered by COVID-19. 


California Employers (with 100 or more employees) to report ‘Pay Data’ by race, ethnicity, and Sex

California Governor Gavin Newsom signed SB 973 into law on September 30, 2020, which addresses pay inequities based on gender, race, and ethnicity. According to this law, an employer with 100 or more employees will be required to submit to the Department of Fair Employment and Housing (“DFEH”) a yearly report by no later than March 31, 2021 (for 2020 reports), and annually thereafter by March 31 every year.  The data in this report shall be bifurcated into broadly defined job categories based on race, ethnicity, and sex, etc. 

The retention period is of a minimum of 10 years for pay data reports and records.


In case of non-compliance with the above-mentioned reporting, DFEH is authorized to seek an order requiring the employer to comply and recover the costs associated with seeking the order. 

New California Family Rights Act (CFRA) expands Employee Rights and Employer Responsibilities

Governor Gavin Newsom signed Senate Bill No. 1383, on September 17, 2020, which replaced the current California Family Rights Act (“CFRA”) and eradicated the California New Parent Leave Act, by merging it with a new CFRA. This Law will be effective on January 1, 2021. The important highlights of the New CFRA are given below:

Applicability to Employer

The new CFRA will apply to employers with five or more employees instead of the old threshold of 50 or more employees.

Eligible Employees:

Under the current CFRA and the Federal Family and Medical Leave Act (“FMLA”)—an employee is eligible for leave subject to fulfillment of below-mentioned conditions:

  • An employer with 50 or more employees employed within 75 miles of the employee’s worksite
  • Employee has worked with the employer for 12 months; 
  • Employee has worked for the employer for 1,250 hours within the previous 12 months. 

The new CFRA removed the “50 or more employees employed within 75 miles” requirement. 

Addition of more Family members:

Under the current CFRA, an employee can take leave for serious health conditions, as well as the serious health condition of a spouse, registered domestic partner, parent, or child. The new CFRA adds the addition of grandparents, grandchildren, and siblings to the list.

The new CFRA also allows an employee to take leave to take care of a domestic partner’s child and a child with a serious health condition, regardless of the child’s age.

Expanded bonding leaves:

The new CFRA allows each parent who works for the same employer to take leave of 12 weeks each as baby-bonding leave, instead of sharing the leave period of 12 weeks between them under the current CFRA.

Protected family and medical leave increase to 24 weeks

Under the new CFRA employee is eligible to take 24 weeks of protected family medical leave, instead of just 12 weeks of leave under the current CFRA.


Employer needs to take all the necessary steps to be compliant under new CFRA before the new law takes effect. 

Additional Information to be disclosed in Corporations’ Statement of Information

Assembly Bill 3075 (“AB 3075”) which expands the scope of information to be included in the corporation’s statement of information to be filed with the California Secretary of State, was signed on September 30, 2020. 

In the case of Limited Liability Company (LLC), the AB 3075 requires the LLC to include whether any member or manager, has an outstanding final judgment issued by the Division of Labor Standards Enforcement or court of law for a violation of any wage order or labor code in Corporations’ Statement of Information.


The employer shall take into consideration the new requirement of disclosing the additional information while filing the Corporation’s Statement of Information with the California Secretary of State.

Increase in hourly Minimum-Wages in the state for the year 2021.

California’s hourly minimum wages are to be increased as stated below effective from January 1, 2021.

  • For employers with 25 employees or less – USD 13 from USD 12.
  • For employers with 26 employees or more – USD 14 from USD 13.

Google faces USD 5 billion lawsuit filed in District Court of California, U.S.A for invading the privacy of users by extensively tracking their internet use through browsers set in “private” mode.

Google faces USD 5 billion lawsuits. The lawsuit is filed in District Court of California, U.S.A for data privacy infringement. Google allegedly invaded the privacy of users by extensively tracking their internet use through browsers set in “private” mode.


Increase in hourly minimum wages for the year 2021 in the Massachusetts state

In the year 2018, the schedule of year-wise minimum hourly wages was released. The schedule prescribed the minimum wages for the period ranging from 2018 to 2023 with the capping of USD 15 per hour for most employees.

The schedule of minimum wages is as follows:

  • For the year 2021: USD 13.50 per hour 
  • For the year 2022: USD 14.25 per hour 
  • For the year 2023: USD 15.00 per hour

New Jersey

Increase in hourly Minimum Wage from USD 11 to USD 12 effective from January 1, 2021

Minimum hourly wages for the employees working in the state will rise to USD 12 (previously USD 11) per hour, effective January 1, 2021.

The minimum hourly wage for employees of a small employer or those engaged in seasonal work will increase to USD 11.10 from USD 10.30.

New Jersey Governor Signs Bill that Incorporates a 2.5% Corporate Surtax Through 2023

Instead of abolishing the surtax after December 31, 2021, as previously declared, A. 4721 (new law), signed by the governor on September 29, 2020, imposes the corporate surtax rate of 2.5% and extends the surtax through December 31, 2023, for corporations with net taxable income over USD 1 million for tax periods beginning on or after January 1, 2018, up to December 31, 2023.


The affected taxpayer shall analyze the provision regarding the extension given for the applicability of surtax prescribed in New Law A 4721 while assessing the Corporation Business Tax liability for the relevant years. The extension of the surtax is applicable until December 2023.

New York

Amendments to Earned Safe and Sick Time Act (ESSTA) to be effective from September 30, 2020.

New York City Mayor Bill de Blasio has signed into law amendments to the New York City Earned Safe and Sick Time Act (ESSTA) with the motive of aligning the Earned Safe and Sick Time Act (“ESSTA”) with New York State Sick Leave Law (“The NYS Law”) on September 28, 2020, effective from September 30, 2020. ESSTA amendments are listed below:

Here is a brief overview of the amendments to ESSTA:

  • Same as of NYS Law, employees are eligible to accrue safe and/or sick time under ESSTA as follows:
  • 40 hours of unpaid safe/sick time per calendar year in case of employers with less than four employees along with a net income of less than USD 1 million in the previous tax year.
  • 40 hours of paid safe/sick time per calendar year in case of: 
  • Employers with less than four employees and a net income of more than USD 1 million in the previous tax year; 
  • employers with one or more domestic workers; and 
  • employers with between five and 99 employees. 
  • 56 hours of paid safe/sick time per calendar year in case of employers with 100 or more employees. 
  • Elimination of the eligibility criteria of working more than 80 hours in a calendar year to accrue safe and/or sick time under ESSTA.  
  • Employees may use paid safe/sick time as it is accrued from January 1, 2021.
  • Employer is required to provide details of the amounts of sick leave accrued and used by the employee in the current calendar year and/or any previous calendar year within three business days of such request from the employee.
  • Under ESSTA, the employer is permitted to request an employee produce a document (e.g. from a Health Care provider) in case of an employee’s absence from work for more than three consecutive days. Further, the employer is also liable to reimburse the expenses incurred for obtaining such documents.
  • The Employer is now required to post the notice at the employer’s place of business in an area accessible by employees. 


As ESSTA amendments are effective from September 30, 2020, employers will need to update their policies and practices to ensure compliance with the above amendments to the law. 

Juneteenth (June 19), will be an Official Public Holiday in New York State from 2021

Juneteenth (June 19), a day which is remembered in honor of Black and African American Freedom and Achievements. The legislation was signed and the executive order is being issued by Governor Andrew M. Cuomo to declare June 19th, as an Official Public Holiday in the state of New York.

Increase in hourly Minimum Wage in New York State for the year 2021.

Long Island & Westchester minimum wages will increase to USD 14 from USD 13 per hour and for the remainder of New York State minimum wages will increase to USD 12.50 from USD 11.80 per hour post-December 31, 2020.

Global Updates


Live reporting of withholding VAT and issue of certified certificates through the government’s SIRE system extended to December 1, 2020, from September 1, 2020

Starting December 1, 2020, mandatory live reporting of withholding VAT and certified certificates are to be issued through the government’s Electronic Withholding System (“SIRE”) system, which has replaced the Withholding Control System (“SICORE”)


Organizations will get extra time for changing their internal procedures, systems, etc. for incorporating changes as per the new government’s Electronic Withholding System.

Minimum and Maximum Basis for Employee Social Security Contributions for September 2020 – December 2020 are ARS 6,105.79 (previously ARS 5,679.8) and ARS 198,435.52 (previously ARS 184,591) respectively

Argentina has set the minimum and maximum basis for social security contributions w.e.f. September 1, 2020. Accordingly, the monthly salary basis for employee social security contributions for September 2020 and December 2020 are ARS 6,105.79 (previously ARS 5,679.8) and ARS 198,435.52 (previously ARS 184,591) respectively. The minimum and maximum threshold sums apply to the employee portion of social security contributions, which consolidated amount to 17%.


The minimum and maximum social security contributions are increased which will lead to additional costs and thus the employer might have to revise the salary structure of the affected employees.

Deadline for Beneficial Ownership reporting extended to December 14 – 16, 2020 from earlier October 28-30, 2020

As per General Resolution 4839/2020 of October 22, 2020, of Argentina, depending upon the last digit of the tax ID code information on beneficial ownership must be reported to the Argentine tax administration (“AFIP”) between July 28 and 30 annually. The deadline for first reporting is extended from October 28-30, 2020 to December 14-16. Data to be reported by this deadline should contain the data for 2019 and also, data concerning foreign passive income companies for years for 2016, 2017, and 2018. 


Legal entities who have not already reported their beneficial ownership information to the government will get a respite period for identification and reporting of Beneficial Ownership. 


Data Protection fines for various offenses

  • The Colombian data protection authority (“SIC”) has imposed a fine of COL 263 million on a telecommunication company for marketing without obtaining data subjects’ consent for commercial and sales purposes.
  • The Colombian data protection authority (“SIC”) issued a resolution to impose a fine of COP 145 million and COP 72 million on Almacenes Exito SA and Exito Industrias SAS respectively for violations under Statutory Law No. 1581 of 2012 for sending marketing messages even after several removal requests by a data subject. 
  • The Colombian data protection authority (“SIC”) had fined Banco de Bogotá, a commercial bank for COP 351 million for unauthorized use of personal data of an individual.


The Danish Data Protection Agency fined “Gladsaxe Municipality” and “Hørsholm Municipality” with DKK 100,000 and DKK 50,000, respectively for personal data security breach upon the theft of computers containing non-encrypted personal data.

The Danish Data Protection Agency fined Gladsaxe and Hørsholm Municipalities in Denmark, fines of DKK 100,000 and DKK 50,000 respectively. In both cases, municipalities reported breaches of personal data security resulting from municipalities’ computer theft. The stolen computers had personal data stored in them without pseudonymization or encryption of data.

The computer stolen from Gladsaxe Town Hall had personal information such as social security numbers from approximately 20,620 citizens while the computer was stolen from a Hørsholm Municipality employee also had information of sensitive nature of about 1,600 employees.


Amendment to Russian personal income tax legislation; proposed increase in higher income tax rate from 13% to 15%

Russia plans to introduce amendments to the Tax Code. Russia Will Have a Progressive Scale of Taxation. The higher personal income tax rate will increase from 13% to 15% beginning January 1, 2021.


Russian residents are liable to a flat personal income tax rate at 13% on their total worldwide income. An increase in the tax rate, if the amendment is passed, will increase those taxpayer’s burden significantly who fall in the higher income category during the pandemic.

Russia – new compliance requirements; Moscow employers mandated to transfer 30% of employees to remote work from October 5 to November 29; 

According to an order by the Mayor of Moscow all employers in Moscow, have at least 30% of their staff working remotely. 

Whom is it applicable to?

This order applies to all hired staff (whether they work under an employment contract or civil law contract). 

All employees above 65 years of age and those who suffer from one of the diseases specified in the list compiled by the Moscow Department of Health must mandatorily work remotely. Employees whose presence is critical to the functioning of the organization can remain in the workplace.

Is working in shifts allowed?

Employers can allow work in shifts. Each shift can have up to 70% of employees on the premises. In the case of a company having separate subdivisions not operating in Moscow, then the total number of employees should be considered for calculation (including only the employees located in Moscow).

New compliance requirements

The information w.r.t. “employees posted for working remotely” is required to be reported in the form “Appendix 4 to Order No. 12-?”, every week on Mondays, w.e.f. October 12. The reporting can be done through the individual entrepreneur/legal entity’s online account on the government website.

Employers can upload their notification forms via their online account at in the tab “Organization of business”- “Support for businesses”

What details are to be reported?

The following details must be specified in the notification:

  • Individual entrepreneur full name;
  • Short name of the organization;
  • Registered address;
  • Actual address (with the code from the Federal Information Address System);
  • Taxpayer identification number (“INN”);
  • Main type of activity (“OKVED”);
  • Main state registration number (“OGRN”);
  • Total number of employees not subject to transfer to remote work;
  • Total number of employees subject to transfer to remote work;
  • Total number of employees on furlough by a decision of the President of the Russian Federation with pay for non-workdays;
  • Additional types of activity carried;
  • Number of employees who are not subject to transfer to remote work, working at the actual address specified in Item 11 of this form.

The following information about the employees switched to remote work must also be reported:

  • Mobile telephone number;
  • Vehicle license plate number (if any);
  • Number of monthly travel passes without limit and with 70-trip limit, temporary social ticket, temporary reduced-fare ticket (if any).
  • Strelka card number (if any);
  • Troyka card number (if any);
  • Social card number (if any);

These details must be provided in an Excel document whose template can be found on the website.


For employers registered in Moscow, there will be additional compliance for reporting employees posted for working remotely. 

Russia to introduce a special tax regime for IT Companies w.e.f. January 2021

Russian president, Vladimir Putin signed the amendments to tax law (“Federal Law No. 265-FZ”) benefiting IT companies on July 31, 2020. The “Amendments to Part Two of the Tax Code of the Russian Federation” will be effective from January 1, 2021.

Which industries will benefit?

A special tax regime for Russian IT companies has been introduced in order to help IT industries operating in the field of information technology:

  • Developing and implementing programs for computers,
  • Activities for developing the design and development of:
  • electronic component base products;
  • electronic (radio-electronic) products; and
  • electronic (radio-electronic) products.

Benefits to IT industries

The benefits available to the IT industries include:

  • Reduction in the insurance premiums from 14% to 7.6% for an indefinite period w.e.f. 2021 

(for ‘OPS or mandatory pension insurance premiums’ -6.0%, for ‘OSS or social insurance contribution’ on VnM -1.5% for compulsory medical insurance – 0.1%)

  • Reduction in the income tax rate to 3% from the current 20% 

(amount paid to the federal budget will be 3% and 0% will be paid to the regional budget)

Further, the procedure VAT exemption to transactions has been revised for “the implementation of exclusive rights to programs” that are included in the “Unified Register of Programs for Electronic Computers and Databases”.

Also, to receive benefits, there must be at least 7 employees on average in the organization for the reporting period. Further, a company is also required to procure a document on state accreditation of organizations operating in the field of information technology.

Criteria for availing the benefits

The companies must meet the following criteria to avail the benefits:

  • The share of income from qualifying activities is at least 90%* of the total income of the organization for the specified period;
  • The average number of employees during the reporting period is at least 7; and
  • A document on state accreditation of organizations operating in the field of information technology is obtained by the company.

*for calculating the 90% threshold, certain income from “the assignment of debt claims” arising from certain incomes as provided in a specified list will be excluded.

Exclusion of benefits in certain cases

It is important to note that, the exceptions to the above as per clauses 26 p 2 of article 149NK includes the provisions of this sub-clause are inapplicable if the transferred rights are of:

  • Obtaining the opportunity to distribute advertising information in the “Internet” (or information and telecommunication network); and/or
  • To gain access to such information; and/or
  • To post offers for the purchase/sale of goods/works/services or property rights on the internet (or information and telecommunication network); and/or
  • To search for information about buyers/sellers or potential buyers/potential sellers; and/or
  • To finalize transactions.


  • The amendments will decrease the cost of insurance premiums, which are the main reason for the cost price falls on the payment of salaries to qualified employees. Accordingly, contributions to the Funds from the wage fund will also be affected.
  • The IT companies can now the right of claim to the debtor who has not paid for IT goods and services (works), and not lose the right to apply for the benefit.


UAE- Decree mandating equal pay for women in the Private Sector effective September 25

The United Arab Emirates now mandates equal pay for women in the private sector. The law was approved by the UAE Cabinet in 2018 but has come into effect since September 25, 2020.

The Ministry of Human Resources and Emiratisation (“MoHRE”) will work along with the government for developing standards, procedures, and detailed requirements to properly implement this tangible public policy


Employers will have to review the pay scales, pay policies, and actual payroll of the employees to ensure pay parity.

Dubai New DIFC Data Protection Law in Force – What You Need to Know

In UAE, the Dubai International Financial Centre (“DIFC”) enacted Law No. 5 of 2020 on July 1, 2020, for organizations to follow global best practices regarding data protection and data privacy. The law will apply to companies’ w.e.f. October 1, 2020. The following are the highlights of the DIFC Data Protection Law No. 5 (the new law):

  • The enactment expands the scope of the law; The controllers of personal data regardless of their place of incorporation will be governed by the law.
  • The non-DIFC entities may be fined, issued warning, or public reprimanded due to their direct or indirect relationship with entities in DIFC. However, they are not required to register or comply with administrative requirements under the law.
  • The law expands conditions requiring data subject’s consent for processing or transfer of personal data. The law requires free, clear, and unambiguous consent.
  • The law incorporates the principles and conditions for the lawful processing of Personal Data as provided under the GDPR.
  • The new law specifies special categories of personal data that can be processed only with requisite conditions as set out in the law.
  • The concepts of Data Protection Officer (“DPO”) and Data Protection Impact Assessments (“DPIA”) are introduced by the new law.
  • The organizations undertaking high-risk processing activities are required to appoint a DPO. Further, a DPO is required to reside in the UAE unless he handles similar functions of the group entity internationally.
  • The law requires data processors to notify controllers in case of a data breach. It places additional responsibility and obligations on controllers as well as the processors.
  • In the case of a breach of personal data, the commissioner must be notified immediately.
  • A written electronic record of all processing activities is now required to be maintained by the data controllers and processors.
  • The law grants specific rights for the processing of personal data by the controller for employment purposes or in the context of healthcare.
  • The conditions for transferring personal data outside of the DIFC are based on ‘GDPR’s data export requirements’ and ‘explicit consent’ of the data subject is required for such transfers.
  • The organizations may use the standard contractual clauses as published by the commissioner for the transfer of data outside DIFC. The law also provides for certification schemes for showing compliance with the law, which companies may obtain.
  • In case the legal basis of processing doesn’t exist, the controller should cease the processing of personal data immediately. All the personal data may be permanently encrypted or archived in a manner where it is ‘put beyond further use’, permanently deleted, pseudonymized, or anonymized.
  • This confers heavy fines, especially with regards to contraventions in respect to data subject rights.


The organizations operating in DIFC or non-DIFC entities having a direct or indirect relationship with entities in DIFC concerning processing or handling of personal data will have to comply with additional compliances, reporting obligations, and updating of company policies.

Significant Developments for UAE – 100% foreign ownership will now be allowed in local companies too

Previously, in UAE, 100% foreign-owned companies were only allowed to operate within a free trade zone; this has now changed as follows: 

UAE amends company law allowing 100% foreign ownership in onshore companies

The United Arab Emirates (“UAE”) has issued a new decree (Federal Decree-Law No. 26 of 2020) introducing significant amendments to the federal company law (UAE Commercial Companies Law No. 2 of 2015) which regulates legal entities outside the free trade zone areas (i.e. the entities established “onshore” in the UAE). The amendments overhaul the rules relating to foreign ownership of companies in the UAE. The decree was signed by the president of UAE on November 23, 2020.

Effective date

Most of the amendments will be effective beginning December 1, 2020. However, certain changes will be implemented at a later date. 

Companies will have a year to comply with the amendments from the effective date.

What has changed?

The following are some of the key amendments affecting onshore legal entities in UAE:

  • 100% foreign ownership

The decree removes the requirement, mandating that “onshore” companies have 51% shares held by a UAE shareholder. This requirement is still in place for those entities carrying activities with a “strategic impact”.

  • Directors Nationality

The requirement for the chairman and a majority of the Board of Directors of private and public joint-stock companies to be Emirati is also removed.

  • Local service agent

Branch offices/representative offices of a foreign entity are no longer required to appoint a UAE national in this role as the local service agent requirement has been removed.

  • Foreign Direct Investment Law 

This law repeals Decree-Law No. 19 of 2018 on Foreign Direct Investment (“FDI”) (issued to promote FDI in UAE) as there is no longer the requirement for 51% ownership by UAE nationals under company law.

  • Single shareholder companies 

Foreign investors can now form a single shareholder company, subject to it not undertaking strategic impact activities.

  • Changes relating to the general meeting

The prior notice calling for a general meeting has been changed from a minimum of 15 days to 21 days;

 E-voting is now allowed at a general meeting;

  • The quorum for a general meeting of an LLC is now decreased to 50% from the earlier 75%, subject to certain conditions;
  • Any shareholder/s holding 5% of the share capital (as against earlier 10%) can request items to be added to the agenda for discussion at the general meeting of the company;
  • Any shareholder/s holding 10% of the share capital (as against earlier 25%) will be able to call a general assembly meeting.

Amendments pertaining to the ownership and operation of public joint-stock companies, increasing or decreasing public company share capital, issuing in-kind shares, etc. have also been introduced.


  • An onshore company can be established in UAE with no local shareholder;
  • The branch or representative office of a foreign company can be established without a local service agent.
  • Owing to the repeal of Decree-Law No. 19 of 2018 on FDI all current applications for foreign ownership licenses have now been suspended by the Department of Economic Development (“DED”).
  • Previously only LLCs with local shareholders were allowed to open one person companies but now foreign investors can also incorporate an LLC (without the restriction of having local shareholders).

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