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Key Features
Release version 20.3.0 features calculation and rate changes to reflect current tax law.
The effective dates disclosed below indicate when the changes enter into force.
New Authority
Switzerland - Neuchatel
Income Tax: The top cantonal and municipal marginal tax rates of 17.5% and 9.1%, respectively, are imposed on taxable income above CHF 400,000. Withholding tax is also supported (see note under Product Enhancement). The federal concession for housing allowance up to CHF 18,000 is available for qualifying inbound employees.
Product Enhancements
Withholding Tax for Switzerland
Added the tax at source method to Geneva, Neuchatel and Vaud. This feature is available for hypothetical tax using compensation calculations, and for hypothetical and host actual tax for cost estimates. Previously, only host actual tax was supported in Geneva.
Select Yes from the Use Withholding Table? input to utilize the tax at source table which includes federal, cantonal and communal amounts. Effective rates for single, married with nonworking spouse, and single parents are supported.
New Tax Input Name
Added the ability to capture personal deductions to decrease taxable income without impacting the total assignment costs. This feature is added to the United States tax estimator, see details below, and will be rolled out to other estimators as needed in future releases.
To use this feature in a cost estimate, map the line item in the template to Base Compensation: Personal Deduction tax input name. In compensation calculation, in the line item using one of the Expat4Cast Hypo calculations, select Personal Deductions as the calculation input. The deduction amount must be entered as a negative value.
Social Security Agreements
The following social security agreements were added:
Agreement countries
|
Effective date
|
Coverage period
|
Canada – China
|
Jan 1, 2017
|
72 Months
|
China – Finland
|
Feb 1, 2017
|
60 Months
|
Country Updates
Argentina
Income Tax: Increased the following, effective January 1, 2020:
Tax bracket thresholds. The threshold for the top rate of 35% increased by ARS 234,071 to ARS 762,707.
Earned income deduction by ARS 100,044 to ARS 594,534.
Basic deduction by ARS 20,842 to ARS 123,861.
Spouse deduction by ARS 35,437 to ARS 115,471.
Child deduction by ARS 17,872 to ARS 58,233.
Social Security:
Increased the employee wage ceiling by ARS 360,085 to ARS 2,261,294, effective March 1, 2020.
Decreased the employer pension contribution rate by 0.3% to 20.1%, effective January 1, 2020.
Australia
Social Security: Increased the superannuation wage ceiling by AUD 7,280 to AUD 228,360, effective July 1, 2020.
Austria
Income Tax:
Updated the calculation for inbound assignments in partial years to use annualized income to determine the tax rate on assignment income.
Changed the family bonus deduction to a credit. The previous treatment, introduced in v.8.6, resulted in a maximum tax overstatement of EUR 975 per dependent.
Social Security: Made the following changes, effective January 1, 2020:
Increased the salary and bonus wage ceilings by EUR 1,800 to EUR 64,440 and EUR 300 to EUR 10,740, respectively.
Decreased the accident and insolvency contribution rates by 0.1% to 1.2% and 0.2% to 0.2%, respectively.
Canada
Income Tax: Increased the following, effective January 1, 2020:
Personal and spouse amounts by CAD 931 to CAD 13,229. Also added phaseout thresholds starting at taxable income of CAD 150,473 and reaching the minimum amount of CAD 12,298 at CAD 214,368.
Maximum voluntary pension deduction by CAD 600 to CAD 27,830 for Registered Pension Plan contributions.
Quebec
Social Security: Increased the Quebec Pension Plan contribution rate by 0.1% to 5.7%, effective January 1, 2020.
Chile
Social Security:
Increased the following wage ceilings, effective January 1, 2020:
Employment insurance by CLP 951,674 to CLP 40 million.
Other contributions by CLP 645,778 to CLP 27 million.
Updated the following employer contribution rates:
Decreased risk activity by 0.9% to 2.6%.
Decreased work accidents by 0.1% to 0.9%, effective January 1, 2019.
Increased disability and life by 0.1% to 1.5%, effective July 1, 2018.
China
Social Security:
Updated the calculation for inbound assignments from Hong Kong or Taiwan to be exempt from contributions when Calculate Social Taxes? is set to Automatic, effective January 1, 2020.
Made the following updates, effective July 1, 2019, unless indicated otherwise. If wage ceilings and rates vary among contributions within a location, the highest amount was used:
Guangzhou:
Increased outbound employee contribution rate by 7% to 22.2%.
Decreased inbound and increased outbound employer contribution rates by 1% to 21% and 6% to 33%, respectively.
Increased the wage ceiling by CNY 127,380 to CNY 335,520.
Shanghai, effective May 1, 2019:
Decreased inbound and outbound employer contribution rates by 0.6% to 27.1% and 34.1%, respectively.
Increased the wage ceiling by CNY 34,596 to CNY 335,124.
Shenzhen: Decreased the following inbound and outbound contribution rates, respectively:
Employee by 0.7% to 10.3% and 22.3%.
Employer by 1.4% to 21.5% and 33.5%.
Beijing: Increased the wage ceiling by CNY 50,652 to CNY 333,432.
Colombia
Social Security: Corrected the 9% family welfare contribution by removing the wage ceiling and increasing the base to gross income. Previously, the contribution was subject to a wage ceiling of COP 263.3 million and calculated on base salary, resulting in a potential understatement of tax costs.
Egypt
Income Tax: Changed Housing Costs Host Country to be taxable unless the assignment type is Short Term with Deductions and duration is 12 months or less.
Social Security: Changed the social security contributions, effective January 1, 2020, by removing the variable salary component; decreasing the contribution rates; and increasing the wage ceiling. The employee and employer contributions are 11% and 18.8%, respectively, on base salary up to EGP 84,000.
Finland
Income Tax: Increased the maximum tax credit by EUR 140 to EUR 1,770; the credit rate by 0.3% to 12.5%; and the phaseout rate by 0.1% to 1.8%, effective January 1, 2020. As a result, the taxable income at which the credit completely phases out increased by EUR 1,428 to EUR 129,196.
France
Income Tax:
Decreased the income thresholds limiting coefficient relief for inflation, effective January 1, 2020. The threshold decreased by EUR 2,387 to EUR 39,291 for single taxpayers with one dependent.
Changed double tax relief for outbound assignments to treaty countries to calculate the foreign tax credit instead of the foreign income exemption, when Qualifies for Expatriate Concession? is set to Yes.
Ghana
Income Tax: Corrected the nonresident rate to 25% for inbound assignments of six months or less. Previously, 20% was used, resulting in an understatement of tax.
Greece
Social Security: Decreased the employee and employer contribution rates by 0.7% to 15.3% and 24.3%, respectively, effective June 1, 2020.
Ireland
Social Security: Increased the employer contribution rate by 0.2% to 11.1%, effective January 1, 2020.
Italy
Income Tax:
Corrected the phaseout for the spouse portion of the family credit. The previous calculation resulted in a potential understatement of tax for married employees with taxable income less than EUR 80,000.
Increased the maximum employment credit by EUR 600 to EUR 2,480, effective July 1, 2020. The credit begins to phase out when taxable income exceeds EUR 8,000 and completely phases out at EUR 55,000.
Social Security: Increased the wage ceiling by EUR 512 to EUR 103,055, effective January 1, 2020.
Kazakhstan
Made the following changes, effective January 1, 2020:
Income Tax: Increased the minimum monthly salary, which increased the maximum basic allowance by KZT 170,592 to KZT 510,000.
Social Security:
Added the medical insurance contribution. Employees and employers contribute 1% and 2%, respectively, up to the wage ceiling of KZT 5.1 million.
Increased the employee pension wage ceiling by KZT 12.8 million to KZT 38.3 million.
Decreased the employer social security contribution rate by 1.5% to 3.5% and increased the wage ceiling by KZT 175,920 to KZT 3.6 million.
Kenya
Income Tax: Made the following updates, effective April 25, 2020:
Removed the top tax rate of 30% and increased the bracket thresholds. The new top rate of 25% applies to income above KES 688,000.
Increased the personal relief by KES 11,904 to KES 28,800.
Social Security: Updated the wage base to use Base Salary instead of assignment income, effective November 7, 2019.
Kuwait
Social Security: Decreased the wage ceiling by KWD 18,000 to KWD 33,000. The previous calculation resulted in a maximum tax overstatement of KWD 3,510.
Mongolia
Social Security: Increased the maximum employee contribution by MNT 1.9 million to MNT 6.3 million, effective January 1, 2020.
Pakistan
Income Tax:
Changed the line items in Appendix B to taxable, with exceptions noted, as a result of annual review.
Added the following line items to the minimum housing benefit calculation:
Camp Accommodations Host Country
Temporary Housing in Foreign Country
Temporary Housing in Home Country
Social Security: Increased the employer wage ceiling by PKR 30,000 to PKR 210,000, effective July 1, 2019.
Philippines
Social Security: Increased the following employee and employer contributions:
Social security by PHP 2,624 to PHP 9,600 and PHP 4,696 to PHP 19,200, respectively, effective April 1, 2019.
Medicare by PHP 5,550 to PHP 10,800, effective January 1, 2020.
Portugal
Income Tax:
Increased the tax bracket thresholds, effective April 1, 2020. The threshold for the top rate of 48% increased by EUR 242 to EUR 80,882.
Increased the child credit by EUR 300 to EUR 900 for each dependent for employees with more than one child, effective April 1, 2020.
Removed the additional child education credit for employees with three or more dependents.
Puerto Rico
Income Tax: Increased the credit rate by 3% to 8% of calculated tax when gross income is less than USD 100,000, effective April 16, 2020. The credit remains 5% at and above this amount.
Senegal
Social Security: Increased the pension and additional pension wage ceilings by XOF 1.2 million to XOF 4.3 million and XOF 3.7 million to XOF 13 million, respectively, effective January 1, 2020. When income exceeds the pension wage ceiling, the additional pension contribution applies.
Slovakia
Social Security: Increased the wage ceiling by EUR 4,956 to EUR 85,092, effective January 1, 2020.
South Korea
Income Tax: Changed the maximum pension credit to KRW 840,000. The previous calculation resulted in a maximum tax overstatement of KRW 396,000.
Social Security: Increased the following:
Pension and health insurance wage ceilings by KRW 4.2 million to KRW 60.4 million and KRW 4.4 million to KRW 1.2 billion, effective July 1 and January 1, 2020, respectively.
Employee and employer health insurance contribution rates by 0.3% to 3.7%, effective January 1, 2020.
Sri Lanka
Income Tax: Reduced the tax table from six to four tiers and decreased the rates, effective January 1, 2020. The new top rate of 18% applies to income above LKR 9 million.
Switzerland
Social Security: Increased the employee and employer old age contribution rates by 0.1% to 5.3%, effective January 1, 2020.
Neuchatel
Refer to New Authority section for details.
Taiwan
Income Tax: Changed the line items in Appendix C to taxable, with exceptions noted, as a result of annual review. These changes made the Preferential Housing Applies? input for outbound assignments unnecessary, so it has been removed.
Social Security:
Increased the workers’ insurance contribution rate by 1% to 11%, effective January 1, 2019.
Decreased the rate for additional employer health insurance contributions by 3% to 58%, effective January 1, 2020. If the employee is married or has dependents, the additional amount is calculated by multiplying the rate by the employer contribution.
Tanzania
Income tax: Decreased the nonresident rate from 30% to 15% for inbound assignments with assignment duration of six months or less.
Turkey
Social Security: Increased the wage ceiling by TRY 34,614 to TRY 264,870, effective January 1, 2020.
United Kingdom
Social Security: Corrected the Home Country Employer Portion Social Tax to output a prorated instead of an annual amount for non-equalized assignments in partial years. The previous calculation resulted in an overstatement of tax.
United States
Income Tax: Added a third option to derive other deductions as part of the itemized deduction calculation. The Use line item value is added to the Other Deductions Option tax position on the home estimator. In Cost Estimate, the template must include a line item mapped to the Base Compensation: Personal Deduction tax input name. In Compensation Calculation, the line item using the Expat4Cast Hypo calculation must have Personal Deductions included as a Calculation Input.
The amount must be entered as a negative value. Twenty percent of the amount is treated as property tax and added to the calculated state income tax. The sum is subject to a USD 10,000 cap.
South Carolina
Income Tax: Added a foreign tax credit for tax paid to Canadian provinces and Swiss cantons, applicable to outbound assignments.
Vietnam
Social Security: Increased the unemployment insurance wage ceiling by VND 57.6 million to VND 1.1 billion, effective February 1, 2020.
Zambia
Social Security: Increased the wage ceiling by ZMW 37,104 to ZMW 275,904, effective January 1, 2020.
