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Key Features
Release version 20.5.0 features calculation and rate changes to reflect current tax law, as well as line item taxability reclassifications resulting from annual review to align with tax legislation.
The effective dates disclosed below indicate when the changes enter into force.
New Authorities
Croatia
Income Tax: The top marginal rate of 36% is imposed on income above HRK 360,000, and municipal tax of 18%, using the Zagreb rate, is imposed on calculated tax. Double tax relief is available as a foreign tax credit.
Social Security: Employees contribute 20% up to the wage ceiling of HRK 629,424. Employers contribute 16.5% without ceiling.
Serbia
Income Tax: A wage tax of 10% is imposed on income. Residents are subject to an additional tax with a top marginal rate of 15% on income over RSD 5.5 million. Double tax relief is available as a foreign tax credit.
Social Security: Employees and employers contribute 19.9% and 16.7%, respectively, up to the wage ceiling of RSD 4.4 million.
Product Enhancements
New Tax Outputs
Added two tax estimator outputs to include employer payroll tax on base compensation in total costs for the Grossup Only calculation method. Refer to the Equus Tax Engine – Cost Estimate Line Items Set-up article in the Equus Help Center for instructions on how to configure Home or Host Country Employer Payroll Tax on Base Comp – Use with Grossup Only Option.
Generic Tax Estimator
Added Employee and Employer Social Wage Ceiling inputs to capture annual amounts for social security contributions.
Social Security Agreements
The following social security agreements were added:
Agreement countries
|
Effective date
|
Coverage period
|
Azerbaijan – Bulgaria
|
May 4, 2020
|
24 Months
|
Bulgaria – Canada, Quebec
|
September 1, 2020
|
60 Months
|
Country Updates
Angola
Income Tax: Made the following changes effective August 21, 2020:
Updated the tax brackets and rates. The new top rate of 25% applies to income above AOA 10 million.
Reclassified the following line items to be taxable:
Severance Benefits
Housing Cost Host Country
Camp Accommodations Host Country
Australia
Other Employer Costs: Updated the following:
Payroll tax to not calculate for outbound assignments when duration is more than six months or Assignment Type is set to Permanent.
Home Country Storage from a fringe benefit to income and it remains nontaxable.
Austria
Income Tax: Made the following changes, retroactively effective January 1, 2020:
Extended expiration of the 55% rate, imposed on income over EUR 1 million, from December 31, 2020 to December 31, 2025. A top rate of 50% will apply for estimates with Year Column Label up to 2025.
Decreased the tax rate applicable to income between EUR 11,000 and EUR 18,000 by 5% to 20%.
It is recommended that cost estimates created after version 9.5 with income above EUR 1 million in 2021 or later be recalculated, as tax may be understated by up to 5%.
Azerbaijan
Income Tax: Reclassified the following line items to nontaxable:
Employee Airfare/Hotel En route to Foreign Location and on Repatriation
Transportation of Goods to Foreign Location and on Repatriation
Family Airfare/Hotel En route to Foreign Location and on Repatriation when assignment duration is 12 months or less.
Chile
Income Tax:
Increased the tax unit (UTM) to CLP 50,322, effective September 1, 2020, which increased the threshold for the top tax rate of 40% by CLP 1.1 million to CLP 187.2 million.
Reclassified the following line items to taxable, unless stated otherwise:
Departure/Destination Services
International Mobility (Settling-in) Allowance
Pre Assignment/Pre Repatriation Visit
Temporary Living Expenses to nontaxable when Assignment Type is Short Term with Deductions and assignment duration is 12 months or less.
Social Security: Increased the development unit (UF) to CLP 28,680, effective September 1, 2020, which increased the following wage ceilings:
Employment insurance by CLP 514,975 to CLP 41.4 million.
Other contributions by CLP 343,317 to CLP 27.6 million.
China
Social Security:
Increased, unless otherwise stated, the following wage ceilings, effective July 1, 2020:
Shenzhen by CNY 48,132 to CNY 383,256.
Shanghai by CNY 40,608 to CNY 336,204.
Guangzhou by CNY 34,992 to CNY 370,512.
Beijing decreased by CNY 14,940 to CNY 318,492.
Enhanced the social tax detail report to disclose the selected urban center and each contribution separately.
Costa Rica
Income Tax: Reclassified the following line items:
To nontaxable when Assignment Type is Short Term with Deductions and assignment duration is 12 months or less:
Employee Language and Cultural Training Costs
Employee Medical Emergencies Host Country
Employee Passport and Work Permit Costs
Temporary Housing in Foreign Country
Temporary Living Expenses
Shipment of Pets to nontaxable when assignment duration is more than 12 months.
Temporary Housing in Home Country to taxable.
Czech Republic
Income Tax: Corrected the solidarity tax base by removing the employer social contribution.
El Salvador
Income Tax:
Corrected the tax table. The previous table included a deduction for employee social security contributions, resulting in a maximum understatement of USD 1,800. The top rate remains 30%.
Reclassified the following line items:
To taxable:
Employee Pre-assignment Medical Exam
Family Airfare/Hotel En Route to Foreign Location and on Repatriation
Pre Assignment/Pre Repatriation Visit
Temporary Housing in Home Country
To nontaxable when Assignment Type is Short Term with Deductions and assignment duration is 12 months or less:
Employee Language and Cultural Training Costs
Employee Passport and Work Permit Costs
Shipment of Pets to nontaxable.
France
Income Tax: Limited the deduction of foreign social security contributions to cost estimates for inbound assignments from countries that have a social security agreement with France.
Germany
Income Tax: Added the exemption with progression method of double tax relief for outbound resident employees to countries that have an income tax treaty with Germany. The foreign tax credit continues to apply for non-treaty countries.
Hungary
Income Tax: Decreased the child care deduction for employees with two dependents by HUF 816,000 to HUF 1.6 million for each dependent, effective January 1, 2020.
Indonesia
Income Tax: Corrected the country name displayed in the outbound Hypo Calculation Details of the Cost Estimate Calculation Details report.
Social Security: Added the following contributions:
Healthcare at 1% and 4% for employees and employers, respectively, up to the wage ceiling of IDR 144 million, effective January 1, 2020.
Pension at 1% and 2% for employees and employers, respectively, up to the wage ceiling of IDR 107 million, effective March 1, 2020. The employee contribution is deductible for income tax.
Italy
Income Tax: Added a deduction for foreign social security contributions to cost estimates for inbound equalized assignments from EEA countries.
Malaysia
Income Tax: Corrected the deemed housing benefits to be taxable for single employees on inbound assignments.
Netherlands
Income Tax: Reclassified the following line items:
Primary or Secondary School Costs Host Country to taxable unless the 30% ruling concession applies.
Education Allowance to taxable.
Portugal
Income Tax: Changed the following line items to be nontaxable up to the lesser of 10% of income and EUR 4,200. This adjustment is displayed in the Allowance Details as Nontaxable Relocation Reimbursement. Previously, these line items were nontaxable:
Employee Airfare/Hotel En route to Foreign Location and on Repatriation
En Route Meals
Temporary Housing in Host Country
Temporary Living Expenses
Transportation of Goods to Foreign Location and on Repatriation
Romania
Income Tax: Reclassified the following line items from :
To taxable:
Departure/Destination Services
International Mobility (Settling-In) Allowance
Relocation Allowance
Temporary Housing Home Country
To taxable unless assignment type is Short Term with Deductions and assignment duration is 12 months or less:
Auto Lease Host Country
Temporary Housing Host Country
Temporary Living Expenses
Singapore
Income Tax: Corrected various line items to be nontaxable when the assignment type is Short Term with Deductions and assignment duration is 12 months or less:
Previously, the following line items were taxable:
Auto Lease Host Country
Camp Accommodations Host Country
Employee Home, R&R and Rotational Leave
Employer Provided Driver Host Country
Furniture and Appliances Rental Host Country
Housing Allowance Host Country
Per Diems Allowance
Telephone Host Country
Utilities Host Country
Previously, the following line items were nontaxable:
Employee Passport and Work Permit Costs
En Route Meals
Sri Lanka
Income Tax: Corrected the personal allowance as follows:
Decreased by LKR 500,000 to LKR 3 million for residents.
Removed for inbound assignment with assignment duration less than 6 months because it is unavailable for nonresidents.
Switzerland
Added the following:
Income Tax:
Family Benefits line item to include the amount in income. For cost estimates, the template must include a line item mapped to the Base Compensation: Family Benefits tax input name.
Exclude General Employment Deduction? input to exclude this deduction from Federal taxable income. Set this input to Yes when a cost estimate includes a representation allowance.
Social Security:
option to calculate the contribution using a percentage or the new feature using the Employee Pension Contribution line item. If a value is entered in the Pillar II Pension Override input, it will take precedence over the percentage or line item options. This functionality was introduced in v.9.2 for compensation calculations. Refer to the Equus Tax Engine Guide to Tax Positions in the Equus Help Center for more information.
Employer Family Allowance contribution for supported cantons. The contribution rate varies between 1.1% and 2.7%.
Tanzania
Income Tax: Increased the tax bracket thresholds, effective July 1, 2020. The threshold for the top rate of 30% increased by TZS 3.4 million to TZS 12 million.
United Kingdom
Income Tax:
Updated the taxable pension contribution for the increase in the tapering threshold and decrease in minimum deduction, retroactive to April 6, 2020. The tapering threshold increased by GBP 90,000 to GBP 240,000, and the minimum deduction decreased from GBP 10,000 to GBP 4,000. The maximum deduction remains GBP 40,000.
Reclassified the following line items:
From nontaxable to taxable:
Family Pre-Assignment Medical and Immunization
Supplemental Retirement Benefit
Employee Pre-Assignment Medical Exam from taxable to nontaxable.
United States
California
Increased the following, effective January 1, 2020, to incorporate the inflationary index released on September 1, 2020:
Tax bracket thresholds. The threshold for the top rate of 12.3% increased by USD 8,270 to USD 599,012 for single taxpayers. Combined with the 1% tax imposed on income exceeding USD 1 million for mental health services, the top rate remains at 13.3%.
Phaseout threshold for itemized deductions and exemption credits. The threshold increased by USD 2,807 to USD 203,241 for single taxpayers.
Standard deductions and exemption credits.
Ohio
Increased the tax bracket thresholds, effective January 1, 2020. The threshold for the top rate of 4.8% increased by USD 3,900 to USD 221,300.
Appendix A – 154 Supported Authorities
