Download to read offline
More Related Content
Equus AMR Tax Update
- 1. Global Tax Trends:Impact and Management
- 2. Speaking With YouToday Gwen Sakponou Tax Solutions Manager Equus Software John Neely Senior Manager Grant Thornton Richard Tonge Principal Grant Thornton
- 3. CONTEXT OBJECTIVES OUTCOMES Key Learnings Changes intax legislation for key countries. Understand the impact of those changes on your global mobility programs. Better equipped to make informed decisions using Equus’ solutions.
- 4. 1 2 3 Agenda Global Tax Update CaseStudy: Focus on India Experience Post TCJA
- 5.
- 6. China Tax Reform Domicileclarified and new 'six year rule' for long-term expats Phase out of tax efficient expat benefits from 2022 Phase out of preferential tax treatment on incentive compensation Introduction of new tax deductible expenses for locals and expats What are the takeaways from the new regulations?
- 7. China Tax Reform Whatis the impact? Payroll complexity increases for expats and domestic employees Tax return process allows for deductions, residency review and refunds Phase out of preferential treatment challenges compensation arrangements Increased risk for payroll administration Falling tax cost for certain assignees and business travelers Incentive compensation remains beneficial if structured effectively Broader range of deductions to reduce tax cost to Employee and Employer Uncertainty from 2022 and a response to economic conditions? Administrative Cost
- 8. China Tax Reform CostEstimate Trends 2015 2018 Where are they coming from?
- 9. Focus on Brexit: Expert View No Deal - Brexit on 6/1/19 or 10/31/19 - Existing Regulations and A1s cease to apply - Reversion to bilateral agreements Remain - Existing regulations continue - Existing and new A1 certificates - Up to 5 years home country coverage Deal - EU Regulations could continue through transition to 12/31/20 - Existing A1 certificates remain valid - New arrangements post-Brexit? X
- 10. Focus on Brexit: Impactfor US MNC’s operating within EU Increased social tax cost of mobility from UK operations Mobility candidates and planning challenges Increased business administration for potential new arrangements Agreement gaps leading to potential dual contributions Contributions stop after 12 months – cost saving or disincentive?
- 11. Comparing Social SecurityContributions on USD 200k • Assuming UK-FR agreement no longer in force • Dual contributions required
- 12. Focus on Brexit Comparativecost of social security on 120K in the EU 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 InUSD Employer Social Tax Employee Social Tax
- 13. Social Taxes: Wideningthe Net China EU India Beyond Shanghai Totalization Networks Impact of Brexit beyond immigration and trade Supreme Court Rulings increases income subject to contributions
- 14. Uncapped contributions for 'internationalworkers' 15,000 rupees contribution limit for domestic employees 12% employer and employee rates 24% where employee meets employer burden too Historic split of compensation between salary, 'special allowance' and other allowances and perquisites. Compensation 'paid uniformly and universally by an employer to its employees' Broad impact on Cost to Company (CTC) for both domestic and international employees 'International workers' have uncapped contributions. No totalization agreement with U.S. Does not apply to variable incentive compensation such as bonus and equity Focus on India Supreme Court Ruling 14
- 15. Case Study: Focus onIndia
- 16. Case Study: Focuson India Capped or unlimited contributions? Status Rate Outbound Inbound Agreement 24% Cap None No Agreement 24% Unlimited Unlimited List of Agreements Australia Austria Belgium Brazil Canada Czech Republic Denmark Finland France Germany Hungary Japan Korea Luxembourg Netherlands Norway Portugal Sweden Switzerland No agreement yet with the United States
- 17. Case Study: Focuson India Comparing Social Tax Costs on USD 200K • $23K difference between 2 scenarios • For a population size of 100 amounts to $2.3M
- 18. Case Study: Focuson India Managing the Costs – Equus Solution India Tax Position • Enter CoC Salary Cap % • Enter % to be multiplied by base salary to determine EPF wage ceiling • Employee must have a certificate of coverage to be eligible
- 19. Case Study: Focuson India Cost Estimate Trends India Outbounds: US vs Canada United States, 96% United States, 54% Canada, 4% Canada, 46% 2015 2018
- 20.
- 21. Increased costs ofLong-Term Assignments Assignment Allowances Shift to Short Term Experience Post TCJA U.S. Tax Reform – Mobility Impacts Moving Expense Deduction
- 22. Experience Post TCJA U.S.Tax Reform – Mobility Impacts Moving Expense Deduction: Illustrate increased cost of long-term assignments Pre TCJA (2017 Law) TCJA (2018 Law) 100 employees * $6K = $600K
- 23. Personal Exemptions Eliminated Deductions Withholdingcomplications Experience Post TCJA U.S. Tax Reform – Mobility Impacts Adjustments to Taxable Income
- 24. Tax on ControlledForeign Corporations Increased Tax Compliance Costs Policy Impact Experience Post TCJA U.S. Tax Reform – Mobility Impacts Global Intangible Low-Taxed Income (GILTI)
- 25. Experience Post TCJA U.S.Tax Reform Expert View – What did we learn? More Experience Based Assignments Assignment Allowance Approach More Short Term Assignments
- 26. Experience Post TCJA CostEstimate Trends Type of moves Average Salary
- 27. 1 2 3 Wrap-up Global Tax Update CaseStudy: Focus on India Experience Post TCJA
- 28. Where Next? Empowering Employees with Flexibility,Choice & Self-Service Tools 2:10 – 2:55 From Concept to Design – Redesigning your Initiations Process 2:10 -2:55 Strategic Practical
- 29. Questions? Don’t forget toleave your feedback in the app!
- 30. DENVER (HQ) 1809 BlakeStreet, 200 Denver, CO 80202 +1 (303) 292-4200 www.equusoft.com DALLAS 5601 Granite Parkway Suite 260 Plano, TX 75024 +1 (214) 989-4339 UNITED KINGDOM 3rd Floor 1 Norton Folgate London, E1 6DB +44 (0)20 3540 6248 MANILLA Level 5, Gateway Tower Araneta Center, Cubao Barangay Socorro, Quezon City Philippines 1109 LISBON Avenida da Liberdade N°245, 4A, Suite 420 1250-143 Lisbon Portugal