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Key Features
Release version 7.6.0 features a number of enhancements to the Equus Tax Engine as well as routine updates to country tax & social security rates.
The effective dates disclosed below indicate when the changes enter into force.
Product Enhancement
Fixed Compensation
Changed the hypothetical income and social tax calculations for partial periods when the cost estimate includes Bonus (Fixed) or Bonus (Pre-Assignment) line items, i.e. fixed compensation. The annual hypothetical tax for such estimates is allocated between variable and fixed compensation, and the fixed portion is excluded from partial period proration in deriving the assignment related amount for tax grossup and total costs. Previously, the annual hypothetical tax was fully prorated, resulting in a potential understatement of tax costs.
One additional enhancement to this allocation method was made for France relating to the supplemental pension contribution, a component of social tax. Due to its high contribution threshold for income over EUR 313,000; the calculated annual contribution will continue to be prorated if total base compensation excluding fixed compensation, exceeds the income threshold.
Income Tax Treaties
The following income tax treaties were added:
Treaty countries
|
Effective date
|
Argentina – Mexico
Brazil – Russia
Egypt – Saudi Arabia
Ivory Coast – Portugal
Kenya – South Korea
Panama – Vietnam
Slovakia – United Arab Emirates
|
Jan 1, 2018
Jan 1, 2018
Jan 1, 2018
Jan 1, 2018
Jan 1, 2018
Jan 1, 2018
Jan 1, 2018
|
Social Security Agreements
The following social security agreements were added:
Agreement countries
|
Effective date
|
Coverage period
|
Belgium – Israel
|
Jun 1, 2017
|
24 Months
|
China – Netherlands
|
Sep 1, 2017
|
60 Months
|
Country Updates
Argentina
Social Security: Increased the monthly wage ceiling by ARS 9,629 to ARS 81,919, effective September 1, 2017.
Canada
Increased the following, effective January 1, 2018:
Income Tax: Maximum pension deduction by CAD 220 to CAD 26,230.
Social Security: Pension contribution and employment insurance wage ceilings by CAD 600 to CAD 55,900 and CAD 400 to CAD 51,700, respectively.
Prince Edward Island
Income Tax: Increased the personal, spousal, and dependent credit amounts, effective July 1, 2017. The personal credit increased by CAD 612 to CAD 8,320.
Quebec
Social Security: Increased the following wage ceilings, effective January 1, 2018:
Parental insurance plan by CAD 1,000 to CAD 72,500.
Pension contribution by CAD 600 to CAD 55,900.
Employment insurance by CAD 400 to CAD 51,700.
Saskatchewan
Income Tax: Made the following changes, effective July 1, 2017:
Updated rates and bracket thresholds. The top rate decreased by 0.5% to 10.5%, and the threshold for the top rate increased by CAD 1,784 to CAD 129,214.
Increased personal, spousal, and dependent credit amounts. The personal credit increased by CAD 222 to CAD 16,065.
Costa Rica
Income Tax: Increased the tax bracket thresholds. The threshold for the top rate of 15% increased by CRC 132,000 to CRC 14,388,000, effective October 1, 2017.
Dominican Republic
Social Security: Increased the health and pension contribution wage ceilings by DOP 153,840 to DOP 1.3 million and DOP 307,680 to DOP 2.7 million, respectively, effective May 1, 2017.
France
Income Tax: Changed the following tax inputs to nontaxable:
Employee and Family Airfare and Hotel En Route to and from Foreign Location
Transportation of Goods to and from Foreign Location
Temporary Housing in Home and Foreign Location
Temporary Living Expenses
Social Security: Added the employer work accident contribution of 1.7% on assignment income.
Germany
Social Security: Increased the following, effective January 1, 2018:
Pension contribution wage ceiling by EUR 1,800 to EUR 78,000 for West Germany and EUR 1,200 to EUR 69,600 for East Germany.
Health contribution wage ceiling by EUR 900 to EUR 53,100.
Hungary
Social Tax: Decreased the employer contribution rate by 2% to 20%, effective January 1, 2018.
Ireland
Income Tax:
Changed Temporary Housing in Home Country to nontaxable.
Reduced the maximum pension deduction by EUR 500 to EUR 115,000.
Kenya
Income Tax: Increased the following, effective January 1, 2018:
Tax bracket thresholds. The threshold for the top rate of 30% increased by KES 51,336 to KES 564,709.
Personal relief deduction by KES 1,536 to KES 16,896.
Mexico
Completed annual review with no material exceptions.
Mongolia
Made the following changes, effective January 1, 2018:
Income Tax: Changed the tax calculation from using flat to progressive rates. The new top rate of 25% applies to taxable income above MNT 42 million.
Social Security:
Increased the employee and employer contribution rates by 2.5% to 12.5% and 2.1% to 14.5%, respectively.
Increased the employee wage ceiling by MNT 576,000 to approximately MNT 2.9 million.
Norway
Income Tax: Decreased the general tax rate by 1% to 23%, effective January 1, 2018.
Puerto Rico
Social Security: Increased the OASDI wage ceiling by USD 1,500 to USD 128,700, effective January 1, 2018.
Romania
Income Tax: Decreased the flat tax rate by 6% to 10%, effective January 1, 2018.
South Africa
Income Tax: Increased the tax bracket thresholds and added a new top bracket, effective March 1, 2017. The new top rate of 45% applies to taxable income above ZAR 1.5 million.
Sri Lanka
Income Tax: Updated the tax rates and bracket thresholds, and added a new top bracket, effective October 1, 2017. The new top rate of 24% applies to taxable income above LKR 3 million.
Spain
Completed annual review with no material changes.
Switzerland
Income Tax:
Updated the tax bracket thresholds, effective January 1, 2017.
Corrected the adjustment to actual tax for outbound partial year assignments when foreign income is exempted to provide relief for double taxation. Previously, the assignment portion of hypothetical tax was incorrectly used in the adjustment instead of the pre-assignment portion.
Basel Land
Income Tax: Corrected the actual cantonal and communal tax calculation for estimates with income above CHF 1.2 million and CHF 2.4 million for single and married employees, respectively. An error was introduced in v.5.5, which resulted in a potential understatement of tax costs. This fix was included in v.7.5.1, released on October 19, 2017.
Geneva
Income Tax: Decreased the following, effective January 1, 2018:
Tax bracket thresholds. The threshold for the top rate of 19% decreased by CHF 5,327 to CHF 609,695.
Employment, insurance, and child deductions.
Other Supported Cantons
Completed annual review with no material changes. Refer to Appendix A for a list of supported cantons.
United States
Income Tax:
Reduced the assignment duration threshold for calculating the foreign earned income exclusion from more than 12 months to 12 months or more because a 12 month assignment can qualify for the exclusion. As a result, estimates with assignment duration of 12 months will calculate the exclusion if selected. The exclusion continues to calculate for estimates configured with the Permanent Assignment Type, without reference to the duration threshold.
Increased the following, effective January 1, 2018:
Tax bracket thresholds. The threshold for the top rate of 39.6% increased by USD 8,300 to USD 426,700 for single taxpayers.
Standard deductions. The deduction increased by USD 150 to USD 6,500 for single taxpayers.
Personal exemption and itemized deduction phaseout threshold. The threshold increased by USD 5,200 to USD 266,700 for single taxpayers.
Foreign earned income exclusion by USD 2,000 to USD 104,100.
Social Security: Increased the OASDI wage ceiling by USD 1,500 to USD 128,700, effective January 1, 2018.
California
Income Tax: Increased the following, effective January 1, 2017:
Tax bracket thresholds. The threshold for the top rate of 12.3% increased by USD 13,975 to USD 551,473 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 exemption credits. The threshold increased by USD 4,744 to USD 187,203 for single taxpayers.
Standard deductions and exemption credits.
District of Columbia
Income Tax: Increased the standard deductions, effective January 1, 2017. The standard deduction increased by USD 450 to USD 5,650 for single taxpayers.
Idaho
Income Tax: Increased the tax bracket thresholds, effective January 1, 2017. The threshold for the top rate of 7.4% increased by USD 138 to USD 11,043 for single taxpayers.
Maine
Income Tax: Increased the tax bracket thresholds, effective January 1, 2017. The threshold for the top rate of 7.15% increased by USD 12,500 to USD 50,000 for single taxpayers.
Venezuela
Social Security: Increased the social security and unemployment insurance wage ceilings (including the 13th month contribution) by approximately VEF 4.7 million to VEF 8.9 million and VEF 9.3 million to VEF 17.8 million, respectively, effective September 1, 2017.
