Newsletter – august 2019

Newsletter – August 2019

Global updates – a quick glance

Australia: Whistleblower Protections Act, 2019 will be applicable to all companies from July 1, 2019

China: China cuts the pension contribution rate significantly from 20% to 16%.

France: 

• • A 3% digital service tax was enacted and will be applied retroactively from January 1, 2019

• • There is now an exemption from statutory pension contributions for foreign employees hired in France

India: 

• • India is set to implement live e-invoicing reporting beginning January 2020; this will initially apply to certain businesses.

• • India Budget 2019 makes no change in Personal Income Tax Rates (PIT),

• • There is an increase in the annual turnover limit for a reduced Corporate Income Tax (CIT) rate

• • India simplifies its draconian labor codes

Netherlands: Netherlands’ Ultimate Beneficial Owners register to be effective beginning January 2020.

South Korea: All employers must file a ‘Simplified Statement on Wage and Salary Income Payment’ bi-annually effective this year.

General Data Protection Regulation (“GDPR”) Fines: The list of companies fined for GDPR violations is increasing; here are some of the recently reported fines. Compliance with GDPR should be a top priority for businesses operating  in the  EU.

Country	GDPR Fines
France	France’s data protection regulator, CNIL (Commission Nationale de l’Informatique et des Libertés) has issued a fine of EUR 50 Million on Google for failing to comply with its GDPR obligations.
Italy	Italy’s privacy regulator imposes a fine of EUR 1 million on Facebook for disclosure of private/personal information of users to third parties without taking prior consent of the users.
Spain	The Spanish Data Protection Authority imposed a EUR 250,000 fine on the Spanish Major Soccer League,  La Liga.
Netherlands	The Dutch Data Protection Authority charges its first GDPR fine of EUR 460,000 on a hospital for accessing the medical records of a Dutch celebrity.
United Kingdom	The Information Commissioner’s Office (ICO) has levied a fine of EUR 100,000 under the Data Protection Act 1998 (“DPA“) on EE (a British mobile network company) for sending text messages to customers without their consent.

Table of Contents

 

Australia

Thresholds determining Large Proprietary Company doubled from July 01, 2019

Whistleblower Protections Act, 2019 will be applicable to all companies from July 01, 2019

Ride-sharing services provided to the employee to and from workplace to residence are subject to Fringe Benefit Tax (FBT)

China

New ‘Encouraged’ list for foreign investment enacted with effect from July 30, 2019

Pension contribution rates reduced from 20% to 16% across China with effect from May 01, 2019

France

There are changes in the corporate tax reduction policy

A three percent digital service tax has been enacted and will be applied retroactively from January 1, 2019

Computerized format of invoices will be allowed for evidencing tax expenses

Exemption from statutory pension contribution for foreign employees hired in France

India

India Union Budget 2019-2020 Highlights – No change in Personal Income Tax Rates (PIT), Increase in annual turnover limit for reduced Corporate Income Tax (CIT) rate

Changes in Companies Act, 2013 regarding Significant Beneficial Owner, Director disqualification, Corporate Social Responsibility, etc.

Clarification on supply of information technology-enabled services (ITeS services) to overseas entities under Goods and Service Tax (GST) law

New Code on Wages Bill, 2019 introduced to subsume labor laws related to worker’s wages, equal remuneration and payment, bonus, etc.

Japan

Japan expands foreign investment screening list; newly included IT and software development sectors to watch out before making investment

Italy

Threshold criteria for appointment of an external auditor increased for SRL companies

Mexico

Mexico’s Labor Reform 2019 imposes stricter obligations on employers

Netherlands

Netherlands’ Ultimate Beneficial Owners register to be effective from January 2020

South Korea

Simplified bi-annual submission reporting of salary information by all employers on Wage and Salary Income Payment

Australia

Thresholds determining Large Proprietary Company doubled from July 1, 2019

From July 1, 2019 the current threshold determining the Large Proprietary company has doubled from: 

• • AUD 25 million or more to AUD 50 million or more with respect to consolidated revenue;

• • AUD 12.5 million or more to AUD 25 million or more with respect to consolidated gross assets;

• • 50 to 100 employees (part-time employees will be considered as a fraction of full-time equivalent)

Implication

The number of companies that get classified as small entities will increase and will reduce the financial reporting obligations for most companies.

Whistleblower Protections Act, 2019 will be applicable to all companies from July 1, 2019

The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (“the Act”) will be applicable to all companies, which includes foreign corporations, financial, trading corporations, ADIs, NOHCs, Insurers and super funds from July 1, 2019. The Act brings about enhanced disclosures, ethical whistleblowing measures and protection of the whistleblowers by amending certain provisions of the Corporations Act, 2001 and the Taxation Administration Act, 1953.

Key reforms include: 

• • Requirement for formulation of whistleblower policy by public companies, large proprietary companies and registered superannuation entities by January 1, 2020.

• • Definition of eligible whistleblowers (for protection purposes) extended to former employees, contractors, employees of contractors, associates, and relatives of such individuals as well as existing employees. However, employees having any personal employment grievances or conflicts with the employer will not be granted any protections prescribed under the Act for making any disclosures. The protections will not be extended to disclosures about employment or workplace grievances such as interpersonal conflicts, transfer, promotion, or disciplinary decisions.

• • Transparency in disclosures is increased by fostering a culture of compliance and ethics and the scope of eligible recipients (who may receive disclosures) is narrowed to include top managerial personnel such as senior managers, auditors, directors and extends to journalists as well.

• • Stronger protections for whistleblowers.

Severe civil and criminal penalties will be levied on contravening employers who breach the provisions of the Act, being as under: 

• • For individuals, up to AUD 1.05 million; and

• • For companies, AUD 10.5 million or 10% of the annual turnover.

• • A penalty of AUD 12,600 for non-formulation of a whistleblower policy.

Implication

Though the formulation of a whistleblower policy is mandatory for certain companies, it is recommended that all companies review/update their policies, employment contracts and check implications of the act.  Training programs may also be conducted to train people regarding the whistleblower policy and its disclosures.

Ride-sharing services provided to the employee to and from workplace to residence are subject to Fringe Benefit Tax (FBT)

The Australian Taxation Office (ATO) has recently clarified that ride-sharing services are not considered as Taxis and hence are subject to Fringe Benefit Tax (“FBT”) where the employee uses such service for travel to and from the workplace to the residence. The FBT exemption extends to a vehicle licensed as a taxi and as ride-sharing services are not licensed taxis, the employer will have to pay FBT on such services being used by the employee to commute to and from the workplace to the residence.

Implication

Employers that provide the employee with the benefit of ride sharing taxis for travel to and from the workplace to the residence will now have to pay FBT on the service.

China

New ‘Encouraged’ list for foreign investment enacted with effect from July 30, 2019

The National Development and Reform Commission and Ministry of Commerce of China issued the following revised lists on June 30, 2019, to encourage foreign investment in China: 

• • Free Trade Zones (FTZ) Negative list 2019 – applies to pilot FTZs

• • National Negative List 2019 – applies to other than FTZs

• • Encouraged list 2019 – for encouraging foreign investment

The above-mentioned negative lists prescribe the industries where foreign investment is restricted whereas the encourage list prescribes the industries where foreign investment is welcome. In a nutshell, negative lists have been reduced and the encouraged lists have been expanded.

Compared to the 2017 list, the Encouraged list for 2019 has widened the scope of industries to encourage more foreign investment in China. To clarify, the following industries have been added or moved to the encouraged sector: 

• • In the manufacturing sector: 
    • • The main raw material for cell therapy medicine and large-scale cell culture products particularly for the pharmaceutical sector.
    • • Main parts of industrial robots, new energy automobiles, and intelligent automobiles particularly for the equipment manufacturing sector.
    • • 5G main core components, designing machines for integrated circuits, chip encapsulation, etc. particularly for electronic information sector.

• • In the service sector: 
    • • Artificial intelligence, cleaner production, carbon capture, etc. particularly for technology service sector.
    • • Cold chain logistics, e-commerce and construction, and operation of special railway lines particularly for commercial circulation sector.
    • • Accounting, tax, inspection and detection services, etc. particularly for the business service sector. 

Implication

Foreign investments that come under the encouraged list will be eligible for favorable treatments such as tax incentives, liberalized approval procedure, subsidized land prices, etc. Foreign investors will need to check their proposed activities with such lists before setting up in China.

Pension contribution rates reduced from 20% to 16% across China effective May 1, 2019

The maximum employer contribution rate with respect to pension contributions has been reduced from 20% to 16%. Companies will need to check for specific adjustments and transition plans for each jurisdiction.

Moreover, employer contributions to unemployment insurance and work injury insurance will continue to be reduced through April 2020.

Implication

With such a reduction in the social security contribution rate, the employer social security insurance burden will be reduced. The employer should ensure that they are aware of the latest social security contribution rates and implement payroll accordingly.

France

Changes in corporate tax reduction policy

Earlier this year, the corporate income tax was planned to be reduced progressively to 25% by 2022. However, on July 11, 2019, the French government approved legislation, which made certain changes with respect to corporate taxation. As per the new legislation, for companies with turnover of more than EUR 250 million (to be assessed on group level) the standard corporate tax rate of 33.33% will be applied, whereas companies with a turnover of less than EUR 250 million (to be assessed on group level) a corporate tax rate of 31% will be applied.

It is to be noted that a 28% corporate tax rate on the first EUR 500,000 remains unchanged.

Implication

Companies with large turnover will not benefit from reduced rates of corporate taxation.

3% digital service tax enacted and will be applied retroactively from January 1, 2019

On July 25, 2019, a digital service tax law was published in the French official gazette and it will be applied on income earned after January 1, 2019. This tax will be applied on certain digital services provided to French users. The criteria for determining tax applicability on the company will be as follows: 

• • Total worldwide annual revenue for taxable digital services of more than EUR 750 million; and

• • Annual revenue for taxable digital services of more than EUR 25 million in France

Computerized format of invoices will be allowed for evidencing tax expenses

Since 2017, most receipts / invoices could be destroyed after scanning the copies (with conditions, this did not apply to social security receipts).

Effective July 1, 2019, supporting documents to prove the base of social security payments can be stored in computerized form. Companies can now set up a system for the digitization of expense reports without the requirement to maintain the same in paper format. Invoices will be allowed to be kept in computerized format subject to satisfaction of following conditions: 

• • Documents must be stored in PDF formats

• • Documents must be timely stamped using internal stamping system

• • Documents must be secured by:

     

    • • Digital fingerprint
    • • Digital signature
    • • Server stamp
    • • All of the above security measures should comply with the one-star general security reference framework.

Implication

Though the implementing decree is now allowing companies to maintain the invoices in digital format, the conditions given above must be adhered to. Companies may have to maintain paper formats until this new process is settled and accepted by all authorities.

Exemption from statutory pension contribution for foreign employees hired in France

Foreign employees hired in France or assigned to France can opt out from French statutory pension contributions (subject to certain conditions) even if they are affiliated to the French social security system. The change was effective on June 18, 2019 and it will be applicable to employees retrospectively for employments beginning on or after July 11, 2018.

Such benefit from exemption from statutory pension contribution (i.e. basic old-age retirement and complementary retirement schemes) is available for a period of three years which can be further renewed for the same period.

Following are the conditions that must be met when opting out of a statutory pension contribution scheme: 

• • The employee should not be subject to statutory pension contributions in the preceding five years from the start date of employment in France.

• • Employment should have been begun July 11, 2018 or after with a French or foreign employment contract.

• • The employee must justify an annual minimum level of contribution of EUR 20,000 to another retirement pension scheme (which can be a private French pension fund or to a foreign pension fund).

The employer and employee must send joint requests to the French social security authority URSSAF (Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales) along with required documentation showing payment of a minimum annual contribution of EUR 20,000 to another retirement pension shceme . A sworn statement by the employee that they he was not subject to a French statutory pension regime for five calendar years from the date of start of employment in France must also be provided.

Implication

The opt out option from a social security contribution can result in cost saving for such employee. However, companies will have to ensure necessary documentation is in place before making claims to URSSAF or the opt out can result in a penalty.

India

India Union Budget 2019-2020 Highlights – No change in Personal Income Tax Rates (PIT); Increase in annual turnover limit for reduced Corporate Income Tax (CIT) rate

The Finance Minister Nirmala Sitharaman presented the Union Budget for the year 2019-20 in the Parliament on July 5, 2019. As mentioned in the budget statement, India’s Ease of Doing Business ranking under the category of ‘paying taxes’ showed a significant jump from 172 in 2017 to 121 in 2019, India had also improved its overall ranking in doing business from 100 to 77.

The key highlights of the budget are as follows:

For Individuals 

• • There will be no change in the personal income tax rates. The Personal Income Tax (“PIT”) rates for Financial Year April 1, 2019 to March 31, 2020 will be as follows:

Annual Taxable Income (in INR)	Tax rate
0 to 250,000	0%
250,001 to 500,000 *	5%
500,001 to 1,000,000	20%
1,000,001 and above	30%

* Individual taxpayers having taxable income up to INR 500,000 will get a full tax rebate and will not be required to pay income tax. Please note that taxable income exceeding INR 500,000 will not receive any benefit from the tax rebate and hence will have to pay income tax on full taxable income.(Introduced in the Interim Budget of February 2019) 

• • The standard deduction limit for salaried persons has been raised from INR 40,000 to INR 50,000 per year. (Introduced in the Interim Budget of February 2019)

• • There is a proposed surcharge on individuals having taxable income between INR 20 million to INR 50 million and individuals earning more than INR 50 million a year. The effective tax rates for these two categories will increase by more than 3% and 7% respectively (10% and 22% increase in the surcharge).

• • Interest paid on housing loans is allowed as a deduction to the extent of INR 200,000 in respect of a self-occupied property. An additional deduction of up to INR 150,000 is proposed for interest paid on sums borrowed up to March 31, 2020 for purchase of an affordable house valued up to INR 4.5 million.

• • Pre-filled tax returns will be made available to individual taxpayers.

For Companies 

• • Currently, a lower corporate tax rate (“CIT”) of 25% is applicable to companies having an annual turnover up to INR 2.50 billion. It is proposed to increase the annual turnover limit for 25% Corporate tax rate from INR 2.50 billion to INR 4.00 billion.

• • There will be a Levy of Tax Deducted at Source (TDS) of 2% on cash withdrawals exceeding INR 10 million in a year from bank accounts for business payments.

• • There is a relaxing of some of the conditions for carry forward and set off losses in the case of start-ups.

• • Currently, there is a high level of personal interaction between the taxpayer and the department for scrutiny assessments in the Income-tax Department.  This leads to heavy corruption from the tax officials. To eliminate such instances a scheme of faceless assessment in electronic mode involving no human interface is being launched this year in a phased manner.

Goods and Services Tax (GST) 

• • A simplified single monthly return is being rolled out.

• • A taxpayer having an annual turnover of less than INR 50 million will have to file only a quarterly return.

• • Beginning January 2020, an electronic invoice system will be implemented through which invoice details will be captured in a central system at the time of issue.

• • GST rate on electric vehicles reduced from 12% to 5%. The government will provide an additional income tax deduction of INR 150,000 on the interest paid on loans to purchase electric vehicles.

The Union Budget for the year 2019-20 received President’s Assent on August 1, 2019.

Changes in Companies Act, 2013 regarding Significant Beneficial Owner; Director disqualification, Corporate Social Responsibility, etc.

The provisions of the Companies (Amendment) Act 2019 have been effective from various dates.                                

Some  of the key amendments are as follows.

No.	Particulars	Old Provision	New Provision
1.	Corporate Social Responsibility (CSR)	The unspent amount of Corporate Social Responsibility (“CSR”)was earlier required to be only stated in the annual report of the company and there was no such provision for transfer of the CSR amount to the government   CSR Applicability: The CSRis applicable for every Company including its holding and subsidiary company and foreign company having its branch office or project office in India having – Net worth of INR 5 billion or more, or- Turnover of INR 10 billion or more, or – Net profit of INR 50 million or more These have to make CSR contribution of 2% of the average net profit made during the three immediately preceding financial years.	The Indian government now requires a transfer of the unspent Corporate Social Responsibility (“CSR”) amount (as disclosed in the annual report) to the government within six months of the financial year.   For contravention of this provision, the government can impose a fine up to INR 2.5 million.
4.	Additional Disqualification for Directors	There were eight grounds for disqualification of a director under section 164 of the Companies Act.	An additional ground for disqualification of a director has been introduced. Accordingly, any director holding directorship in more than 20 companies or 10 public companies will be disqualified to act as a director – it is important to check this for nominee directors (provided by local service providers), who provide such services to multiple clients.
5.	Significant Beneficial Owner	The company was responsible only for reporting of information as received from the Significant Beneficial Owner (“SBO”) in the form BEN-1 regarding Significant Beneficial Ownership.	An amendment regarding Significant Beneficial Owner (“SBO”) places an onus on the company to undertake necessary steps for SBO identification and require the person to make the declarations specified under the Companies Act.  Note The Ministry of Corporate Affairs on July 29, 2019 gave an extension for filing of e-Form No. BEN-2 (Return to the Registrar in respect of declaration of SBO to be filed by the company upon receipt of information in BEN-1 from the shareholder of the company) without additional fees till September 30, 2019.

New form “Form DIR-3-KYC-WEB” for subsequent reporting of KYC of Directors

The Indian government has notified the Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019. It has eased the KYC (Know Your Client/Customer) filing of directors with the introduction of “Form DIR-3-KYC-WEB” for those whose director details as per the MCA (Ministry of Corporate Affairs) portal remains unchanged.

Particulars	Old Provision	New Provision
KYC (Know Your Client/Customer)	DIR-3 KYC Due Date June 30th  Provision Every individual holding Director Identification Number (DIN) had to file Form DIR-3 KYC with details such as name, nationality, residence, mobile number, the e-mail id, address, etc. along with proof for identification and permanent address.	Form DIR-3-KYC-WEB Due Date September 30th  Points to be noted With the introduction of “Form DIR-3-KYC-WEB” upon entry of the Director Identification Number (DIN), an OTP (One-time Password) will be sent on the email address and phone number of the director. Upon entering the correct OTP the other details will be pre-filled and there is no need to physically enter the details every time.  Every individual holding DIN, however, will still have to file the form “e-form DIR-3-KYC” for the first time or to update details such as mobile number or the e-mail address.

Clarification on supply of information technology-enabled services (ITeS services) to overseas entities under Goods and Service Tax (GST) law 

Recently, the Central Board of Indirect taxes and Customs (CBIC) has issued a circular providing clarification on the supply of information technology-enabled services (ITeS services) to overseas entities under Goods and Service Tax (GST) law.

ITeS services includes business process outsourcing services like back office operations, call centers, legal databases, payroll, remote maintenance, accounting etc.

Following are the takeaways from the circular: 

• • The supplier of ITeS (information technology-enabled) services (as mentioned above) supplying services on his own account to his clients or to the customers of his clients, will not be considered as intermediary services. In such cases the supply is considered export of services subject to fulfilment of other conditions and hence, exempt from GST.

• • The supplier of backend services located in India arranges or facilitates the supply of goods or services or both by the client located abroad to the customers of client. Such backend services includes support services, during pre-delivery, delivery and post-delivery of supply such as order placement and delivery and logistical support, obtaining relevant Government clearances, transportation of goods, post-sales support and other services, etc. This transaction will be treated as intermediary services and will be subject to GST.

• • In case of combination of above two scenarios, treatment of the supply of ITeS services would depend on the particular facts and circumstances of each case.

Implication

It is very important to check and structure the activities in India keeping in mind this information, to avoid any GST liability in India. The liability can be very high with potential for disputes.

New Code on Wages Bill, 2019 introduced to subsume labor laws related to worker’s wages, equal remuneration and payment, bonus, etc.

The Code on Wages Bill, 2019, has been passed in the Parliament, which subsumes the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The Bill will become an Act after Presidential assent.

The Code on Wages Bill, 2019 is the first in the series of four labor codes proposed in the government’s labor reform initiative and subsume various legal provisions related to worker’s wages, equal remuneration and payment, bonus, etc. The remaining three codes will deal with social security, industrial safety and welfare, and industrial relations.

Following are the some of the key provisions of the Code on Wages Bill, 2019: 

• • It simplifies the wage definition and removes the multiplicity of wage definitions under different labor laws.

• • It ensures minimum wages and timely payment of wages to all employees and workers.  This will be applicable for both the organized as well as unorganized sectors including labor-intensive industries and small businesses employing less than 10 workers in total.

(Currently, the provisions of the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936 apply to workers employed in certain kinds of jobs and below a particular wage ceiling only.) 

• • Employees should get monthly salary by the seventh of the following month.

• • The Bill proposes fewer factors for determining minimum wages, which currently is based on multiple factors, such as the level of skill set, type of employment, etc.

• • The Bill has introduced the national floor rate for wages and minimum wage in certain sectors. The national floor rate may vary according to the different regions of the country.   The minimum wages decided by the central or state governments shall not be less than the floor wage.

Implication

This is a very important law and will reduce labor disputes considerably.

Japan

Japan expands its foreign investment screening list; newly included IT and software development sectors to be aware before making investment 

Beginning August 1, 2019, Japan has expanded the list of sectors that require mandatory pre-foreign investment screening under the Foreign Exchange and Foreign Trade Law (FEFTL) of the country.

Prior reporting to the Minister of Finance and the minister with responsibility for the relevant industry will be required upon any acquisition of shares in a Japanese company falling under the specified list of sectors that require mandatory pre-foreign investment screening, which will be required in up to 30 days. The list includes certain common sectors such as: 

• • Information Technology and its support services;

• • Telecommunications Technology;

• • Software Development etc.

Italy

Threshold criteria for appointment of external auditor increased for SRL companies

The current criteria for appointment of an external auditor or supervisory body by Limited Liability Companies are changed as follows: 

• • Where for at least two consecutive financial years a company meets any one of the below-mentioned criteria, an external auditor or supervisory body must be appointed :

     

    • • has total assets in the balance sheet exceeding EUR 4 million (the current limit is EUR 2 million); or
    • • has revenue from the sale of goods and services exceeding EUR 4 million (the current limit is EUR 2 million); or
    • • has an average number of employees employed during the financial year exceeding 20 (the current limit is 10)

Implication

Companies which have appointed an auditor will have the option to revoke the appointment considering this change in the criteria.

Mexico 

Mexico’s Labor Reform 2019 imposes stricter obligations on employers 

The Mexican Federal Law (“LFT”) stands amended on May 1, 2019. The changes affect all employers in Mexico having any workforce. The employers face additional obligations as well as certain prohibitions:

Employers will have to change the work contracts of the workers enabling them to add beneficiaries in case of the death of the worker. Employers must identify the psychosocial risks which the employees face (stress, anxiety, etc.) and develop an action plan for combating or reducing such risks. In addition, employers should review the labor contracts every four years taking into account the workers approval. Employers should maintain certain registers of temporary workers and should ensure that there is no discrimination on grounds of sex, religion, caste, gender, etc. by devising a protocol to check such discrimination.

Employers must ensure that pregnant employees are not deprived of social security benefits in the event of the termination of the labor contract.

One of the most important changes is the overhaul of unions and how workers can participate in them. The worker can now freely decide to engage in collective bargaining and to organize and join a union. The new law will help unions to be independent and not company controlled.

Implication

Employers should review their employment policies/human resource policies as well as employment contracts/agreements to incorporate the recent changes made in Mexican Labor Reform.

Netherlands

Netherlands’ Ultimate Beneficial Owners register effective from January 2020

The Netherlands will introduce the requirement of Ultimate Beneficial Owners (“UBO”) register beginning January 2020, subject to the legislative process in the Dutch parliament. A UBO is: 

• • A person holding 25% or more of the shares in a BV or NV, directly or indirectly;

• • A person having 25% or more ownership interest of a partnership, directly or indirectly;

• • A person capable of exercising more than 25% of the votes in a decision to amend the articles of association of a foundation, directly or indirectly;

• • A person effectively controlling a company or entity.

Each newly incorporated entity is required to obtain information on the persons who are ultimately beneficial owners. The Dutch UBO register will be part of the Dutch Trade Register and upon the register being in place, existing entities will have 18 months to register the details. A branch is exempt from the UBO obligation. The details of a UBO will be publicly available.

UBO details available publicly will include: 

• • Full name

• • Month and year of birth

• • Nationality

• • Country of residence

• • Nature and extent of the UBOs economic interest

Furthermore, the Dutch government will have access to the following information: 

• • Date, place and country of birth

• • Citizen service number or foreign tax identification number

• • Passport copy

• • Residential address

• • Documents stating the nature and extent of the UBO’s economic interest

Implication

Every company incorporated in the Netherlands may be required to identify the Ultimate Beneficial Owners in the company for the purpose of reporting, if the act comes into effect in 2020.

South Korea

Simplified bi-annual submission reporting of salary information by all employers on Wage and Salary Income Payment

South Korea has introduced a simplified reporting of salary information. Bi-annual submission of the ‘Simplified Statement on Wage and Salary Income Payment’ will now be required to be submitted to the South Korean National Tax Service (NTS) by all employers from 2019. The first statement submission of the ‘Simplified Statement on Wage and Salary Income Payment’ iswithin 10 days after six-months for the period ending on June 30, 2019.

Submission timelines

The new reports must be submitted within 10 days following the end of each six-month calendar period.

Sr. No.	Reporting period	Due date
1.	For the period from January 1 to June 30	July 10
2.	For the period July 1 to December 31	January 10

In case of a business closing, the statement must be submitted within 10 days of the date of cessation of the business.

Implications 

• • Employers / payroll service providers will need to provide this additional compliance.

• • In case of non-compliance, the employer will have a penalty of up to 0.5% of the total submission amount.

© 2019 Shan & Co.