Regulatory Updates for Globally Managed Businesses
When doing business overseas, your business need to deal with a large number of taxing regulations, labor laws, stock options, etc, cautiously. Each country has its own regulatory standard that varies from country to country. There are numerous areas of a business that have different regulatory filing deadlines in each country. Below are the regulatory updates for countries like Denmark, Germany, Ireland, United Kingdom, Netherlands, Malaysia and Japan.
Danish Government Eliminates Special Tax Rules on Share-based Payment
The Danish Government plans to eliminate special tax rules on employee share ownership plans and individual share-based remuneration plans. Abolition of rules on employee share ownership will be effective from January 1, 2012, and abolition of individual share-based remuneration plans with a deferred tax element till the time of sale will be applicable to signed agreements on or after November 21, 2011.
German Government Introduces New Tax Return Form – Anlage N-AUS
German government introduces a new tax return form – Anlage N-AUS for foreign employment income which requires foreign employees to report more details related to their employment income for German income tax returns, if they have applied for a tax exemption or a foreign tax credit in respect of such income.
International mobile employees who are taxable in more than one foreign country, need to fill up the Anlage N-AUS for each foreign country in which they are being taxed. Any deviation with regard to submission of details to the tax authorities or non-compliance may attract legal action.
Ireland: Changes to Pay Related Social Insurance on Share Based Remuneration
Government of Ireland announced that employee Pay Related Social Insurance (PRSI) charges on all share-based remuneration will be applicable from January 1, 2012 with the exception of shares already held in an Employee Share Ownership Trust before January 1, 2011.
United Kingdom Delays Parental Leave Extension for One Year
United Kingdom delays the parental leave extension for further one year required by the EU Parental Leave Directive. If the change is applied, unpaid leave tenure will be extended to 18 weeks from 13 weeks for an employee who has a child less than five years of age.
Dutch Employment Term Likely to Reflect Retirement Dates
A new bill related to Dutch employment law requires old age pension to start on the actual day an employee turns 65 rather than on the first day of the month the employee is due to retire. The employment contracts of companies operating in the Netherlands and staff handbooks will need to incorporate this change.
Malaysian Government introduces Minimum Wage System for the First Time
Malaysian government introduces minimum wage system for the first time in the country against profound resistance from employers. National minimum monthly wage is set at 800 to 900 ringgit ($261 to $293) which is higher than the approximate present worker’s salary of 760 ringgit ($248). This system may bridge the widening income gap, but could negatively affect Malaysia’s competitiveness as a low labor cost market against ASEAN countries. Malaysian Employers Federation forecast that Malaysia might lose 4 million jobs at 200,000 companies in consequence of the new system.
Japan Announces New Equity Reporting Criteria
Japan’s new equity reporting criteria is expected to come into effect on January 1, 2013 and will affect employers with business operations in Japan as well as individual taxpayers. Japanese subsidiaries which are owned fifty percent or more by foreign companies and Japanese branches of foreign companies are required to adhere to the modification. As per the new ruling, any income realized from equity compensation by resident employees from the foreign company will need to be reported to the national tax office, annually.
To overcome the challenges in regulatory filing, it is advisable to partner with an expert to help simplify the process. They have the latest information on how to keep up with the constantly changing laws. A dependable professional partner, when doing business overseas, can help eliminate the anxieties concerning your overseas expansion project and allows you to focus on building your business alone. Additionally, they may provide assistance in other areas like international accounting, international financial reportingetc.
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