Links Onboard - Latest APAC Tax, Payroll & Labour Law Updates
Below is the latest issue of Onboard, a quarterly update by Links. Our legislation update covers major tax, labour law, payroll and visa developments across Asia. It is designed to get you updated at-a-glance.
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Want a more in-depth look the legislation by each location? Check out our location legislation summary page for more!
Launch of the One-Stop MPF Fund Platform App
On the 10th July, the Mandatory Provident Fund Schemes Authority launched a new mobile application accompanying the MPF Fund Platform. The app is a one-stop solution that grants easy access to different MPF funds' information, including management fees and investment performance.
Service fee revision by Immigration Department
Taking effect in March 2019, certain services by the Hong Kong Immigration Department including the issuing of visas/entry permits and travel documents, generic tests and dispatch service for delivering travel documents to places outside Hong Kong underwent a fee revision. The service fee increase for these services ranged from 9 - 21%. For an in-depth fee listing of each service, you may visit the official Hong Kong Immigration Department website.
Updated Code of Practice in Cases of Extreme Weather
The Labour Department released the newly revised "Code of Practice (CoP) in times of Typhoons and Rainstorms" on June 3rd. The revision was made in response to last year's Super Typhoon Mangkhut, providing guidelines to employers and employees on the resumption of work in case of "extreme conditions".
Aside from essential staff, upon the announcement of "extreme conditions", instead of heading to work immediately, employees are advised to stay at the place they are currently in for two hours after the cancellation of T8.
Launch of FSS Self- Service Machines
Now members of the public have the option to start or suspend payment of contributions of the arbitrary system through the FSS self-service machines. Launched in July, these FSS self-service machines are set up in more than 40 locations around Macau.
Social Security Payment Updates
The monthly average income in 2018 is regarded as the social security payment base pay in 2019.
Made effective starting July 2019, the upper limit of the payment base for pension insurance and unemployment insurance is 23,565 yuan, the monthly fee for pension insurance is 4,713 yuan, and the unemployment insurance is priced at 282.72 yuan per month.
The lower limit of the payment base is 3,613 yuan, the pension insurance monthly payment is 722.6 yuan, and the unemployment insurance monthly payment is 43.36 yuan.
Those who enjoy social subsidies should pay for pension insurance 216.78 yuan and unemployment insurance 7.23 yuan per month.
The upper limit of medical insurance and maternity insurance is 27,786 yuan, and the lower limit is 5,557 yuan.
Flexible employees pay a monthly fee of 453.82 yuan for medical insurance.
Those who enjoy medical subsidies pay a monthly fee of 64.84 yuan.
Minimum Wage in Beijing
Starting in July, the minimum wage in Beijing is 12.64 per hour and 2,200 per month. Overtime pay and employment benefits such as insurance and provident fund are not included in the minimum wage.
New Social Security Cards in Shanghai
Since July, all incumbents in Shanghai have begun to renew their social security cards. New social security cards can be used to handle a variety of insurance and labor relationship management, as well as financial functions including account transferring, cash saving & withdrawal and credit consuming.
Employment Law Changes for Dispatched Workers and APRC Holders
Passed on 26 April 2019, amendments were made to Taiwan's Labour Standards Act (LSA). Two key provisions were passed for the greater protection of said workers:
- Dispatch agencies can now only sign permanent employment contracts with dispatch employees
- If agencies do not pay wages on time, dispatch employees can request that the client enterprise pay them instead.
Summer Interns Required to Participate in Labour and Pay Pensions
Summer school workers to participate in labour insurance and labour pensions. If a school worker is engaged in more than two jobs, the employers who meets the relevant requirements have to pay labour insurance and labour pension.
Work Rule Reference Handbook now translated to English
With the development of globalization, the ministry of labour has translated Work Rules Reference Handbook into English version in order to let foreign companies understand laws and rules.
Labour Standards in Taiwan
According to Article 70 of the Labour Standard Law and Article 38 of the Regulations, if the employer employs more than 30 workers, it shall abide to the relevant working regulations
Policy Changes in Services Sector
The Committee of Supply introduced a series of changes to maintain the effectiveness of foreign workforce controls, better manage the foreign manpower growth and encourage businesses to invest in developing local workers to create quality jobs.
Starting 1 July 2019, the Local Qualifying Salary (LQS) will be raised from $1,200 to $1,300.
New Minimum Basic Salary for Social Insurance Rates
The Decree 38/2019/ND-CP on minimum basic salary for social insurance took effect on July 1,2019. The minimum basic salary cap for social insurance raised to 29,800,000 VND per month, raising with it the mandatory social insurance contribution for both employer and employee.
Amendments to the Thailand Labour Protection Act
Made effective in May 2019, Thailand launched a series of updates to their Labour Protection Act. Key changes as follows:
New category of statutory severance pay
Previously capped at 10 years or more, the Thailand Labour Protection Act now has a new category of entitlement for statutory severance pay for those who have worked for an uninterrupted period of 20 years or more. These employees who have been employed for 20 years of more will be entitled to the equivalent of 400 days at their most recent rate of pay upon termination.
Increased maternity leave
Pregnant employees are now entitled to a total of 98 days of maternity leave. During this period, the employer must also pay up to 45 days wages.
Paid necessary business leave
It is now mandatory for employers to grant employees a minimum of 3 days of paid necessary business leave per year.
Workplace relocation notification
Employers wishing to relocate an employee's workplace to anther establishment is obligated to post a clear & visible announcement at the current workplace, for a continuous period of at least 30 days in advance. Employees who do not wish to relocate must also inform the employer in writing within the 30 days of the announcement.
Consent required for change of employer
Employers must now obtain consent from employees where there is a change in employer either as a result of a transfer of functions or staff from one juristic person to another.
Interest on statutory payments
Employers must pay interest on the default amount at 15% per annum if they defaults on payments owed to employees for wages in lieu of advance notice, wages during a temporary cessation of the employer's operations, or other payments due to an employee.
Payment in lieu of notice required on date of termination
An employee with an indefinite term employment contract may be terminated immediately without notice as long as the employer is willing to pay wages in lieu of advance notice on the day of termination.
75% wages payable during suspension of business
The employer must pay the employee at least 75 percent of his or her usual daily wages throughout the suspension period where there is a temporarily suspension of business, in part or in whole, for any reason other than force majeure. Such payment shall be made at the place of work of the employee. If the payment is to be made elsewhere, or by other means, consent of the employee must be obtained.
Employers must pay wages, overtime payments, payments for working on holidays, and payments for working overtime on holidays, at the same rate for both male and female employees who undertake work of the same nature, quality, and quantity, or work of the same value, at an equal rate.
Seniority Payments for Employees on UDCs
Employees working on UDCs (Undetermined Duration Contracts) may benefit from seniority payments. Over the last few months, the Ministry of Labour and Vocational Training of Cambodia released a number of instructions clarifying on points relating to seniority payment. Calculation of ongoing seniority payments in both garment and non-garment sectors were recently detailed in a instruction enacted on June 10, 2019.
The instructions stipulates that seniority should be counted once every six months (a "semester"). Eligible employees are entitled to seniority payments equaling to seven and a half days of average wages and other benefits each semester, for a total of fifteen days' ongoing seniority payments per year.
- Non-garment sectors:
Employers must make back payments (which accrue at 15 days per year) starting in December 2021 at a rate of three days per semester.
- Garment sector (Including textiles & footwear):
Back payments are due at a rate of 15 days per semester, and the maximum seniority back payment amount cannot exceed 6 months of average net wages. In calculating the daily average basic net wage, employers must treat a month as 26 working days.
New Legislation Addressing Workplace Bullying
In effect starting July 16, 2019, the Labor Standards Act (LSA) of South Korea made an amendment providing a definition of "workplace harassment".
Under this amendment, for the first time, "workplace harassment" is prohibited under the law in Korea. The amendment states that both employer and employees are prohibited from causing physical or mental suffering, or worsening the working environment of another employee by taking advantage of their status beyond the appropriate scope of work.
Shadow Payroll Concessional Reporting
Recognising the many factors impacting the operation of a shadow payroll arrangement making it difficult for multinational employers to report through Single Touch Payroll (STP) the Australian Tax Office has made a concession for inbound assignees.
An inbound assignee:
- is employed by an offshore entity
- is seconded to Australia
- has all or part of their base salary and other remuneration paid by an offshore entity
- is maintained in Australia using a shadow payroll arrangement, for example, a notional payroll for the purposes of tax and social security obligations and internal tax equalisation and protection policies.
To apply for the concession, employees must be reported on or before pay day. Starting July 1, 2019, the due date for submission of reporting of inbound assignees through STP is the last day of the next calendar month after the relevant payment is made.
Cleaners & Couriers- Taxable Payments Annual Report
The Taxable payments annual report (TPAR) is for payments made to contractors between July 1 2018 and June 30, 2019.
Businesses will have to lodge their first TPAR by August 29, 2019 if they:
- have an Australian business number (ABN)
- you have paid contractors to provide cleaning or courier services on you behalf.
Penalty Rate Changes for Pay
From 1 July 2019, penalty rates will be changed in the following awards:
- Hospitality Award
- Pharmacy Award
- Fast Food Award
- Retail Award
For more detail of the rates, when they are applied and Pay Calculator, you may visit the official Fair Work Commission website.
Individual Income Tax Return due on 31st Oct 2019
Individual, partnership and trust income tax returns due:
- Income tax returns for trusts that were either taxable or non-taxable medium to large taxpayers in the last year they lodged and have one or more prior year returns overdue as at 30 June in the previous financial year.
- Income tax returns for Trusts where the previous financial year income tax return was not lodged by the due date.
- Exception – new registrant trusts from the previous financial year can lodge by 28 February unless required earlier.
Access Payment Summary or Income Statement
If an employer reports employee's income, tax and super information to the Australian Taxation Office (ATO) through Single Touch Payroll (STP) they are no longer required to give employees a payment summary. This information will instead be made available to employee through ATO online services via myGov and finalised by 31 July.
If the employer is not yet reporting through STP, they will need to continue to provide employees with payment summaries due 14 July.
New Minimum Wage Rates & High Income Threshold
The Fair Work commission reviews the national minimum wage under awards each year. The minimum pay rates this year was increased by 3%, starting from the first full pay period on or after 1 July 2019.
As of 1 July 2019, the high income threshold is also updated to $148,700.
Fairer Tax Measures Being Passed
The change is designed to ensure greater fairness. Starting from 1 December, offshore businesses who supply more than $60,000 of services and low-value goods per year will pass on GST directly to Inland Revenue.
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