Shareworks Global Intelligence Newsletter February 2020

February 1, 2020 Shareworks Marketing

Icon of a globe with a network connecting countries together with the wording "Global Intelligence Newsletter" underneath.

Shareworks Global Intelligence newsletter provides an overview of recent changes affecting employee share plans globally. 

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Country Updates

Argentina: Tax on Purchase of Foreign Currency Introduced

Argentina has introduced a new tax of 30% on foreign currency purchases made for certain enumerated purposes including savings, travel expenses and payment for foreign services. The tax will be collected by financial intermediaries and is applicable to resident individuals and legal entities. The tax will be in force for the period of 5 years, commencing for transactions made on or after December 23, 2019. 

The tax will not apply to foreign exchange transactions carried out for purposes of purchasing foreign shares and/or implementing a cost recharge arrangement between a foreign parent and its local subsidiary. However, individuals will still require the prior approval of the Argentine Central Bank for foreign exchange transactions entered into for investment purposes that exceed the equivalent of USD 200 per month.

This information has been provided by our collaborating law firm in Argentina, Nicholson y Cano Abogados (contact: María Noel Lascano at mlascano@nyc.com.ar and Cecilia Martin at cmartin@nyc.com.ar).

 

Azerbaijan: Financial Market Supervision Authority Abolished

On November 28, 2019, the Financial Market Supervision Authority was abolished and its powers, including its functions and rights in the field of licensing, regulation, and supervision of the financial services market, protection of the rights of investors and consumers of financial services, were transferred to the Central Bank of Azerbaijan.

 

Azerbaijan: New Compulsory Health Insurance Contribution

Effective on April 1, 2020, employers and employees in Azerbaijan will be subject to a new Compulsory Health Insurance tax (CCHI) in Azerbaijan. The updated tax rates for CCHI, as well as the other social insurance contributions, will be as follows:

Employee Social Insurance Rates:

Employees in non-oil & gas sector

Monthly Income (AZN)

Social Security

Unemployment Insurance

CCHI

0 - 200

3%

0.5%

1%

201 - 8,000

10%

0.5%

1%

8,001 - up

10%

0.5%

0.5%

Employees in oil & gas sector

Monthly Income (AZN)

Social Security

Unemployment Insurance

CCHI

0 - 8,000

3%

0.5%

2%

8,000 - up

3%

0.5%

0.5%

Employer Social Insurance Rates:

Employers in non-oil & gas sector

Monthly Income (AZN)

Social Security

Unemployment Insurance

CCHI

0 200

22%

0.5%

1%

201 - 8,000

15%

0.5%

1%

8,000 - up

15%

0.5%

0.5%

Employers in oil & gas sector

Monthly Income (AZN)

Social Security

Unemployment Insurance

CCHI

0 - 8,000

22%

0.5%

2%

8,001 - up

22%

0.5%

0.5%

This information has been provided by our collaborating law firm in Azerbaijan, Michael Wilson & Partners (contact: Michael Wilson at michael.wilson@mwp.kz).

 

Brazil: Changes to the Social Security System

On January 14, 2020, changes to the social security system in Brazil were published in the Official Gazette. The following progressive social security table will be applicable with effect from March 1, 2020: 

Monthly salary (BRL)

Rate %

0 - 1,039

7.5%

1,039.01 - 2,089.6

9%

2,089.61 - 3,134.4

12%

3,134.41 - 6,101.06

14%

6,101.06 - 10,000

14.5%

10,000.01 - 20,000

16.5%

20,000.01 - 39,000

19%

39,000.01 - up

22%

The new table will be applicable to both private employees and civil servants. However, the maximum rate for private employees will effectively be 14% because contributions will be capped at a maximum salary base of BRL 6,101.06.

This information has been provided by our collaborating law firm in Brazil, Pinheiro Neto - Advogados (contact: Cristiane Matsumoto at cmatsumoto@pn.com.br).


Ireland: Registration Required for Reporting Employee Share Schemes

On December 11, 2019 the Irish Tax Authority published a new chapter (Chapter 13) under The Share Schemes Tax and Duty Manual containing information on how to file annual equity reporting Form RSS1 and Form KEEP1 via Revenue Online Service (“ROS”).

Employers or tax agents are required to upload both forms by using ROS. Employers must also timely register for Share Scheme Reporting online via ROS before filing the upcoming 2019 returns due by March 31, 2020.

This information has been provided by our collaborating law firm in Ireland, McCann FitzGerald (contact: Eleanor Cunningham at eleanor.cunningham@mccannfitzgerald.com).

 

Maldives: Introduction of Personal Income Tax

On December 4, 2019, a new income tax bill was passed for 2020, introducing personal income taxation in the Maldives. 

Effective January 1, 2020, the following personal income tax bands will be applicable, and employers will be required to withhold personal income tax on a monthly pay-as-you-go basis from their employees’ salaries and benefits (including equity compensation).

Annual income (MVR)

Tax rate 

0 - 720,000

0%

720,001 - 1,200,000

5.5%

1,200,001 - 1,800,000

8%

1,800,001 - 2,400,000

12%

2,400,001 - up

15%

Currently, individuals are not subject to personal income tax and are only taxed on profits derived from carrying out business activities. 

This information has been provided our collaborating law firm in the Maldives, Shah, Hussain & Co. (contact: Dheena Hussain at dheena@shclawyers.com).

 

Mongolia: Social Security Cap Increased

Effective January 1, 2020, the monthly maximum basis for social security contributions in Mongolia will increase from MNT 368,000 to MNT 483,000. The applicable social security rates of 11.5% for employees and 14.5% for employers remain the same.

This information has been provided by our collaborating law firm in Mongolia, Lehman Law (contact: Jacob Blacklock at jblacklock@lehmanlaw.com).

 

Sweden: Income Tax Amendments for 2020

The highest tax bracket of 25%, applicable on annual income exceeding SEK 689,300, was abolished in Sweden effective January 1, 2020. 

Following this amendment, two tax brackets remain: annual income up to SEK 509,300 is exempt of personal income tax, and income exceeding SEK 509,300 is taxed at a flat rate of 20%.

This information has been provided by our collaborating law firm in Sweden, Skeppsbron Skatt (contact: Erik Frosdal at erik.frosdal@skeppsbronskatt.se).

 

United Kingdom: Guidance on Reporting Net-Settled Employee Awards

Her Majesty’s Revenue and Customs (“HMRC”) recently issued guidance on ongoing reporting for companies using the net-settlement method for collecting taxes due for non-tax advantaged employee share plans in their annual Employment Related Securities (“ERS”) returns. 

Net-settlement is a means of limiting the number of shares that need to be issued to satisfy share awards. However, using the net-settlement withholding method can reduce the amount of any corporate tax deduction otherwise available for such awards. 

In its recent guidance, HMRC has clarified that companies offering net-settled awards should report these awards on two separate entries in their ERS returns, showing both:

  • the actual number of shares delivered to employees, and
  • the value of the cash withheld and paid to HMRC, which should be disclosed as a cash cancellation.

In the past, employers may have reported the full number of shares (including those withheld) in the same entry in their ERS return; going forward, HMRC will only accept reporting in line with the above. 

The deadline to submit the annual tax returns for tax year 2019/2020 is July 6, 2020.

This information has been provided by our collaborating law firm in the United Kingdom, Pinsent Masons (contact: Fleur Benns at fleur.benns@pinsentmasons.com or James Sullivan-Tailyour at james.sullivan-tailyour@pinsentmasons.com).

 

Upcoming Filing and Reporting

United States of America: Annual Reporting Deadline for Qualified Plans

January 31, 2020
Affects: Local Company

The annual reporting deadline for companies that grant tax qualified incentive stock options (ISOs) or shares to an employee under a tax-qualified employee stock purchase plan (ESPP) in the US is approaching. Companies that granted such tax qualified awards during the year must file annual information statements, namely Form 3921 for ISOs and Form 3922 for a tax-qualified ESPP. The forms provide details in respect of any employee or former employee who exercised an ISO, or to whom shares were transferred under a tax qualified ESPP in the relevant tax year.

Information statements must be provided to employees by January 31 (or the next business day if January 31 falls on a weekend). In addition, the statements have to be filed with the Internal Revenue Service by March 31 (if filed electronically), or by the last day of February (if filed in paper). Forms 3921 and 3922 as well as instructions on how to complete these forms are available on the IRS website.

This information has been provided by our collaborating law firm in United States of America, Pillsbury Winthrop Shaw Pittman (contact: Jessica Lutrin at jessica.lutrin@pillsburylaw.com)

 

Taiwan: Tax Withholding Statement

January 31, 2020
Affects: Local Company

Taiwan employers must submit a non-withholding statement to the tax authorities by January 31 that includes the name, address, national ID number of each employee with awards or shares that vested, were exercised or purchased under an employee equity plan in the previous calendar year. In addition, the Taiwan employer must also issue a non-withholding statement to employees by February 10.

This information has been provided by our collaborating law firm in Taiwan, Huang & Partners (contact: Lawrence Lee at lawrence_lee@huangandpartners.com.tw)

 

Germany: Wage Tax Certificate

February 28, 2020
Affects: Local Company

The German employer must issue a wage tax certificate ("Lohnsteuerbescheinigung") containing information each employee's calendar year income, as well as information on social security contributions. The wage tax certificate, which must also include all employee benefits, must be sent electronically on an official form to the tax authority at which the employer is registered and a copy must also be provided to the employee. The deadline for filing is the last day in February after the end of the previous tax year (December 31). 

This information has been provided by our collaborating law firm in Germany, Haver & Mailaender (contact: Ulrich Schnelle at us@haver-mailaender.de)

 

Malaysia: Annual Reporting of Equity Awards

February 28, 2020
Affects: Local Company

The deadline for annual reporting in respect of equity awards granted to Malaysian employees is approaching. Companies that granted such equity awards must report any stock option exercises, RSU vestings, and/or purchases under an ESPP that took place during the previous calendar year to the Malaysian Inland Revenue Board on Appendix C of the Form BT/MSSP/2012 and on the statement of remuneration (EA form) which is issued to employees.

The due date for filing is February 28 following the end of the tax year. Form Appendix C of the Form BT/MSSP/2012 is available on the website of the Malaysian Inland Revenue Board.

This information has been provided by our collaborating law firm in Malaysia, Loh Chow Tet & Associates (contact: Ann Premilla David at general@lohchowtet.com)

 

Singapore: Filing for Former or Posted Employees

March 1, 2020
Affects: Local Company

The local company must file a report on appendix 8B with the Inland Revenue Authority of Singapore in respect of all Singaporeans and Singapore permanent resident employees who have ceased employment or are posted overseas, and derived gains from the vesting, exercise, assignment, release or acquisition of any rights obtained under any employee stock option plan or employee share ownership plan which are taxable in Singapore.

The due date for both filings is March 1 following the end of the tax year.

This information has been provided by our collaborating law firm in Singapore, Low Yeap Toh & Goon LLP (contact: Low Siew Joon at infolaw@lytag.com.sg)

 

Vietnam: Equity Reporting for Registered Plans

March 31, 2020
Affects: Parent Company

Companies that operate equity plans which have been approved by the State Bank of Vietnam must file a report providing details of any awards granted or vested as well as any options that have been exercised in the previous calendar year. The due date for filing is March 31 following the end of the tax year. 

This information has been provided by our collaborating law firm in Vietnam, Russin & Vecchi (contact: Diu Dao Hong at dhdiu@russinvecchi.com.vn)

 

Ireland: Equity Reporting

March 31, 2020
Affects: Local Company

Companies are required to report to the Irish Revenue on Form RSS1 (filed electronically) by March 31 any unapproved options and other rights to acquire shares that were granted, assigned, released and/or exercised by employees and/or directors during the preceding year.

Separate reporting requirements apply for approved save-as-you-earn plans, approved profit-sharing plans and employee share ownership trusts. The forms are available for download on the Irish Revenue website.

Failure to comply with these mandatory filing obligations will result in a penalty and, in the case of any approved schemes, may result in the withdrawal of Revenue approval for approved schemes.

This information has been provided by our collaborating law firm in Ireland, McCann FitzGerald, Solicitors (contact: Eleanor Cunningham at eleanor.cunningham@mccannfitzgerald.com)

 

Japan: Equity Reporting

March 31, 2020
Affects: Local Company

The deadline for annual reporting in respect of offshore assets for Japanese employers is approaching. Japanese companies that are majority owned by non-Japanese companies and Japanese branch offices of non-Japanese companies must file an annual report with the tax authorities, using Form 9(3), if employees have had cash or equity awards that vested or were exercised in the previous tax year.

The due date for filing is March 31 following the end of the tax year. Form 9(3) is available on the website of the Japanese tax authority.

This information has been provided by our collaborating law firm in Japan, Anderson Mori & Tomotsune (contact: Kunihiko Morishita at kunihiko.morishita@amt-law.com)

 

China: SAFE Quarterly Reports

April 3, 2020
Affects: Local Company

Companies that have obtained SAFE approval for their equity plans in China are required to file quarterly reports with their local SAFE office within three business days following the end of the relevant quarter.

This information has been provided by our collaborating law firm in China, Martin Hu & Partners (MHP) (contact: Kevin Xu at kevin.xu@mhplawyer.com)

 

Saudi Arabia: Quarterly Equity Reporting

April 10, 2020
Affects: Parent Company

Companies offering share plans to employees in Saudi Arabia under the revised 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. Plan amendments or changes may also require additional filings with the CMA.

This information has been provided by our collaborating law firm in Saudi Arabia, Tamimi (contact: Grahame Nelson at g.nelson@tamimi.com)

 

Singapore: Equity Reporting

April 15, 2020
Affects: Local Company

Under the Qualified Employee Equity-Based Remuneration Schemes (QEEBR), qualifying employees may elect to defer payment of the tax due at exercise of stock options and vesting of share awards, including RSUs, for up to 5 years, subject to an interest payment. Under the tax deferral scheme, the applicant must meet certain criteria.

A plan that meets the applicable requirements of the QEEBR legislation is automatically qualified (i.e., no approval is required).

Employees must submit an application form to defer their tax gains to the Inland Revenue Authority of Singapore, and the employer must certify on the application form that the stock plan under which the stock option and/or share award is granted qualifies for the QEEBR Scheme. The form must be submitted to the Singaporean tax authorities by April 15.

This information has been provided by our collaborating law firm in Singapore, Low Yeap Toh & Goon LLP (contact: Low Siew Joon at infolaw@lytag.com.sg)

 

India: Employer Tax Filings

April 15, 2020
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

This information has been provided by our collaborating law firm in India, Little & Co. (contact: Rajni Divkar at rajni.divkar@littlecompany.com)

 

Upcoming Events

GEO's Global Share Plan Basics Bootcamp

April 20, 2020

The bootcamp will be organized in the Renaissance Nashville Hotel in Nashville, Tennessee. It is designed to be either a standalone one-day program or for those wishing to also attend GEO’s 21st Annual Conference, GEO offers a combined program option.

Registration is now open.

More info: https://www.globalequity.org/geo/Nashville2020-Bootcamp

 

GEO Nashville 2020

April 21-23, 2020

The registration is now open for GEO's 21st Annual Conference in Nashville, Tennessee, at the Renaissance Nashville Hotel.

Find out more and register here.

More info: https://www.globalequity.org/geo/Nashville2020

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Shareworks, Shareworks Global Intelligence and all product marks and logos are trademarks of Shareworks.THIS INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s) as Shareworks does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your employees. The information is sourced from third parties, may not be current and is subject to change without notice. Shareworks makes no representations or warranties concerning the accuracy, completeness or timeliness of the information and is not implying an affiliation, sponsorship or endorsement with/of any third parties or views expressed by such parties. Any views expressed in the information are solely those of the third-party source. Shareworks shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information. All information made available by Shareworks is subject to the terms of the written agreement entered into between Shareworks and your company.

CRC 2926171 (02/2020)

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