Global Tax and Regulatory Update: October 2019

The Federal government has set the employment insurance rates for 2020 as follows:

• The annual maximum of insurable earnings will increase from CAD 53,100 to CAD 54,200.
• The employee insurance contribution rate will be reduced from 1.62% to 1.58%, with a maximum contribution of CAD 856.36.
• The employer insurance contribution rate will be reduced from 2.27% to 2.212%, with a maximum contribution of CAD 1,198.90 per employee.

As Quebec has its own insurance administration plan, rates differ from the above:

• The annual maximum of insurable earnings will be the same as in the rest of the country, CAD 54,200.
• The employee insurance contribution rate will be 1.2%, with a maximum contribution of CAD 650.40.
• The employer insurance contribution rate will be 1.68%, with a maximum contribution of CAD 910.56 per employee.

The changes are effective from January 1, 2020.

Our Global Compliance Law Firm in Canada, Stikeman Elliott LLP will be happy to provide more information. Feel free to reach out to Michel Legendre atmlegendre@stikeman.com.

The Ministry of Taxation published the personal income tax adjustments for 2020, as follows:

• The minimum tax rate will be increased from 12.13% to 12.14%;
• The threshold above which the maximum 15% tax rate applies will be increased from DKK 513,400 to DKK 531,000.

The changes are effective from January 1, 2020.

Effective September 1, 2019, the government introduced a new income tax regime allowing resident companies that meet certain conditions to qualify as “international companies”. More information on how the application process will work will become available once the regime is implemented.

Eligible companies that are granted favorable income tax treatment as “international companies” will enjoy the following tax benefits:

• Wages paid to Georgian resident foreign citizens will be exempt from personal income tax;
• No withholding tax obligation will be applicable on dividends paid by such companies; and
• The corporate income tax rate will be 5%.

It is not known at this time how these proposed changes will impact the taxation of equity awards. We will continue to monitor these developments.

Our Global Compliance Law Firm in Georgia, BGI Legal will be happy to provide more information. Feel free to reach out Lasha Gogiberidze at lasha.gogiberidze@bgi.ge.

On September 7, 2019, the Prime Minister announced that the government intends to table a tax bill that will include several tax cuts for 2020, including the following:

• A reduction of the personal income tax rate from 22% to 9% for employment income up to EUR 10,000; and
• A reduction of the dividend withholding tax rate from 10% to 5%.

We will continue to monitor these developments.

Our Global Compliance Law Firm, KG Law Firm, in Greece will be happy to provide more information. Feel free to reach out to Loukas Panetsos at l.panetsos@kglawfirm.gr.

Effective September 1, 2019, the Greek government lifted all remaining capital control restrictions, including:

• the requirement to seek approval for any transfer of funds exceeding EUR 4,000 per employee per month from Greece to a foreign country, and
• the statistical notification requirement on transactions exceeding EUR 50,000 between Greek residents and non-residents.

Lifting the remaining capital control restrictions signals a return to a more stable and positive macroeconomic forecast.

Our Global Compliance Law Firm in Greece, KG Law Firm will be happy to provide more information. Feel free to reach out to Loukas Panetsos atl.panetsos@kglawfirm.gr.

On September 10, 2019, the 2020 budget proposal was submitted to the parliament.

A new personal income tax bracket has been proposed, resulting in the following tax bands for individuals:

• For income up to 330,225 ISK per month, the tax rate will decrease from 22.5% to 20.6% in 2020 and to 17% in 2021;
• For income between 330,226 to 927,087 ISK per month, the tax rate will be 22.75% in 2020 and 23.5% in 2021;
• For income above 927,087 ISK per month, the tax rate will remain at 31.8% for both 2020 and 2021.

Our Global Compliance Law Firm in Iceland, Jonsson & Hall will be happy to provide more information. Feel free to reach out to Geir Gestsson at geir@law.is.

The tax manual on the Key Employee Engagement Program (KEEP) has been amended to include the updated definition of “qualifying share option”. KEEP, a share option program that is intended to help small and medium enterprises attract and retain talent, provides an income-tax-exempt treatment for qualifying share options granted during the period January 1, 2018 to December 31, 2023.

According to the updated manual, the total market value of all shares granted to an employee or director must not exceed:

• EUR 100,000 in any one year of assessment;
• EUR 300,000 in all years of assessment; or
• 100% of the qualifying individual’s annual emoluments in the year of assessment in which the qualifying share option is granted.

Other conditions for the share options to be eligible for the KEEP are listed below:

• The shares acquired by the exercise of the share options are new shares in a qualifying company, which carry no present or future preferential rights;
• The share option price is not less than the market value at the date of grant;
• There is a written contract or agreement in place setting out the number and description of shares which may be acquired by exercise of the option, the option price, and the period during which the option(s) may be exercised;
• The vesting period is at least 12 months in length; and
• The share options cannot be exercised more than 10 years from the date of grant.

Our Global Compliance Law Firm in Ireland, McCann FitzGerald, Solicitors in Ireland will be happy to provide more information. Feel free to reach out Eleanor Cunningham at eleanor.cunningham@mccannfitzgerald.com.

The Mauritius Revenue Authority updated the minimum and maximum wage for the purposes of calculating social security contributions effective as of July 1, 2019.

The minimum monthly wage on which contributions are payable is now MUR 2,875 (approximately USD 80), while the monthly maximum basic wage for social security calculation purposes is MUR 18,740 (approximately USD 520).

Our Global Compliance Network Law Firm in Mauritius, ENSAfrica would be happy to provide you with more information. For any queries, feel free to reach out to Thierry Koenig at tkoenig@ensafrica.com.

The Inland Revenue Tax System recently launched the Integrated Tax Administration System, an e-service allowing taxpayers to file their tax returns and view their transactions electronically. To use the service, taxpayers must sign upand link the system to their tax ID number.

Taxpayers should continue to use existing filing methods until the system is fully operational.

Our Global Compliance Law Firm in Namibia, H.D. Bossau & Co will be happy to provide more information. Feel free to reach out to Hanno Bossau at hannob@bossau.com.

September 30, 2019
Affects: Local Company

Indian employers relying on the terms of the General Permission enacted by the Reserve Bank of India (RBI) must file an annual report with the RBI providing details regarding the shares issued to residents of India, the number of employees who received the shares, the amount of funds remitted for the purchase of shares and amounts remitted on account of recharge arrangements, if any, during the previous tax year on a specified form. Companies are advised to file the report by September 30 at the latest.

October 10, 2019
Affects: Shareworks – Sales

Companies offering share plans to employees in Saudi Arabia under the new securities law exemption must notify the Capital Market Authority (“CMA”) within 10 days after the end of the quarter following grant disclosing the total number and value of all offers made to employees during the preceding quarter. This notification can be made by an authorised person or by the company. The company should also review any plan amendments or changes to determine whether any additional filings with the CMA may be required.

October 15, 2019
Affects: Local Company

Indian employers are required to file Form 24Q with the Indian tax authorities on a quarterly basis. These quarterly returns report information on employment income paid to employees (including from share-settled awards) as well as taxes withheld.

The quarterly returns must be submitted by:

• May 31 for the quarter ending March 31
• July 31 for the quarter ending June 30
• October 31 for the quarter ending September 30
• January 31 for the quarter ending December 31

October 03, 2019

The 2018 Annual Conference attracted 375 share plans industry professionals and providers, covering all of the essential hot topics, plus abundant networking and business development opportunities.

The Shareworks Team will be there!

We will be presenting:

• Improve Your ‘Tech’ Life, by June Davenport. Using Technology to Save Time and Money, and Reduce Global Share Plan Compliance Risk. Get in contact!

More info: https://www.proshare.org/events

October 21-23, 2019

Mark your calendars for this not-to-be-missed three-day event, which is known for bringing together strategic-minded individuals who are leaders in their fields and involved in the design and management of executive compensation and employee share plans as well as the providers that serve them.

GEO’s America’s Regional Conference (formerly NECF) is known for bringing together strategic-minded attendees who are knowledgeable about employee share plans and interested in topics that address current issues vital to the application of equity in all of its core disciplines. The America’s Regional Conference provides industry-leading education and networking opportunities in an inviting and relaxed environment, allowing attendees ample time to network with existing contacts and make new ones!

The Shareworks Team will be there!

June Davenport will be attending this event. Get in contact!

More info: https://www.globalequity.org/geo/ARC2019

November 20, 2019

The 2019 Pan European Regional Event on November 20, 2019, at the prestigious Humboldt Carre in the heart of Berlin. This year’s event promises insightful keynotes, a schedule packed with useful content, knowledgeable speakers and high caliber attendees.

Delegates will leave this year’s event armed with up-to-date information on the industry’s most pressing issues and will be equipped with tips to improve their global share plan operations and executive compensation strategies through exceptional knowledge, shared experiences and access to tools they can use immediately.

The Shareworks Team will be there!

June Davenport will be attending this event. Get in contact!

More info: https://www.globalequity.org/geo/node/6946