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Key Features
Release version 8.6.0 features calculation and rate changes to reflect current tax law.
The effective dates disclosed below indicate when the changes enter into force.
Income Tax Treaties
The following income tax treaties were added:
Treaty countries
|
Effective date
|
Bahrain – Bangladesh
Bahrain - Egypt
Hong Kong – Saudi Arabia
Japan – Russia
Luxembourg – Senegal
Mexico – Saudi Arabia
Nigeria – Singapore
Qatar – Spain
|
Jan 1, 2019
Jan 1, 2019
Apr 1, 2019
Jan 1, 2019
Jan 1, 2019
Jan 1, 2019
Jan 1, 2019
Jan 1, 2019
|
Social Security Agreements
The following social security agreements were added:
Agreement countries
|
Effective date
|
Coverage period
|
Belgium – Turkey
Peru – South Korea
Slovenia – United States
|
Sep 1, 2018
Jan 1, 2019
Feb 1, 2019
|
60 Months
60 Months
60 Months
|
Country Updates
Argentina
Social Security: Increased the employee wage ceiling by ARS 143,533 to approximately ARS 1.3 million, effective September 1, 2018.
Austria
Income Tax:
Changed the employee voluntary pension contribution from deductible to nondeductible for outbound employees.
Added a family deduction of EUR 1,500 per dependent, effective January 1, 2019.
Removed the general employee credit of EUR 54, effective January 1, 2016.
Social Security: Increased the salary and bonus wage ceilings by EUR 330 to EUR 5,220 and by EUR 480 to EUR 10,440 respectively, effective January 1, 2019.
Bangladesh
Income Tax: Corrected the following:
Tax calculation to use an employee pension credit instead of a deduction. The credit is equal to 15% of the contribution amount.
Treatment of inbound employees with an assignment duration of six months from nonresident to resident.
Belgium
Income Tax: Corrected the inbound nonresident calculation to disallow the spousal relief, personal allowance, and dependent deduction when assignment duration is less than nine months.
Canada
Increased the following, effective January 1, 2019:
Income Tax:
Maximum pension deduction by CAD 270 to CAD 26,500.
Tax bracket thresholds. The threshold for the top rate of 33% increased by CAD 4,529 to CAD 210,371.
Personal and spousal credits by CAD 260 to CAD 12,069.
Employment credit by CAD 27 to CAD 1,222.
Social Security:
Canada Pension Plan wage ceiling by CAD 1,500 to CAD 57,400.
Canada Pension Plan contribution rate by 0.15% to 5.1%.
Employment Insurance wage ceiling by CAD 1,400 to CAD 53,100.
Decreased the Employment Insurance contribution rate by 0.04% to 1.62% for employees and by 0.56% to 2.268% for employers.
All Provinces
Income Tax: Corrected the home country tax costs for non-equalized cost estimates to prorate by host months in partial years. Previously, the annual amount was output, resulting in a potential overstatement of tax.
Quebec
Social Security: Decreased the following, effective January 1, 2019:
Employment Insurance contribution rate by 0.05% to 1.25% for employees and by 0.07% to 1.75% for employers.
Parental Insurance Plan contribution rate by 0.022% to 0.526% for employees and by 0.031% to 0.736% for employers.
Costa Rica
Income Tax: Increased the bracket thresholds. The threshold for the top rate of 15% increased by CRC 324,000 to approximately CRC 14.7 million, effective October 1, 2018.
Czech Republic
Income Tax:
Corrected the child tax credit for employees with two or more dependents. Previously, the calculation resulted in an understatement of tax.
Increased the child tax credit by CZK 1,800 to CZK 15,204, effective January 1, 2018.
Enhanced the cost estimate calculation detail report to display the number of dependents.
Social Security: Increased the social security wage ceiling by CZK 83,856 to approximately CZK 1.4 million, effective January 1, 2018.
Denmark
Income Tax: Increased the employment deduction rate by 0.6% to 10.1% and decreased the maximum employment deduction by DKK 100 to DKK 33,200, effective January 1, 2019.
Egypt
Income Tax: Changed the following moving expenses from nontaxable to taxable:
Employee Airfare/Hotel En route to Foreign Location and on Repatriation
Departure/Destination Services
En Route Meals
Pre Assignment Visit
Temporary Housing in Foreign Country
Temporary Housing in Home Country (previously taxable for short term assignments)
Temporary Living Expenses
Transportation of Household Goods to Foreign Location and on Repatriation
Finland
Income Tax: Made the following changes, effective January 1, 2019:
Increased the tax bracket thresholds. The threshold for the top rate of 31.25% increased by EUR 1,900 to EUR 76,100.
Increased the maximum earned income credit by EUR 90 to EUR 1,630.
Decreased the municipal tax rate by 0.5% to 18%.
Changed the following allowances from taxable to nontaxable:
Domestic Help Host Country
En Route Meals (previously nontaxable for short term assignments)
Family Airfare/Hotel En route to Foreign Location and on Repatriation
Primary or Secondary School Costs Host Country
France
Income Tax: Made the following changes:
Corrected the deduction limitation calculation to be based on the coefficient shares. Previously, the number of dependents was used to increase the limitation.
Added a deduction for employee and employer voluntary pension contributions for inbound employees who qualify for the inpatriate regime and are covered by a social security agreement.
Corrected the Household (Réfaction) Credit to use the coefficient share and reduced the base by the Low Income Credit. Previously, the number of dependents was used to decrease the credit and calculated national tax was used as the base.
Corrected the Low Income (La Décote) Credit by increasing the qualifying income tax thresholds to EUR 1,569 and EUR 2,585 for single and married taxpayers, respectively. Previously, the threshold omitted the 4/3 multiplier.
Increased the maximum employment allowance by EUR 135 to EUR 12,305.
Social Security: Corrected the 2018 Transition Credit to offset income tax only. In v.8.5, employee social security is included in the credit when the Calculate 2018 Transition Credit? is set to Yes - All or Actual Only, resulting in a potential understatement of tax.
Germany
Income Tax: Increased the following, effective January 1, 2019:
Basic allowance by EUR 168 to EUR 9,168.
Child deduction by EUR 96 to EUR 2,490 for single taxpayers.
Hungary
Social Security: Corrected the outbound nonresident wage base to use assignment income. Previously, base compensation was used, resulting in a potential understatement of tax.
Indonesia
Income Tax: Corrected the transportation allowance from nontaxable to taxable for short term assignments.
Ireland
Updated the following, effective January 1, 2019, unless indicated otherwise:
Income Tax:
Bracket thresholds. The threshold for the top rate of 40% increased by EUR 750 to EUR 35,300 for single taxpayers.
Universal Social Charge. Decreased the 4.75% rate to 4.5%, and increased the threshold for the 2.5% rate by EUR 502 to EUR 19,875.
Excluded the employer voluntary pension contribution from the special assignee relief income base applicable to assignments of 12 months or more.
Added Algeria and Senegal to the list of qualifying countries for the Foreign Earnings Deduction, effective January 1, 2013.
Social Security: Increased the employer contribution rate by 0.1% to 10.85%.
Italy
Income Tax: Enhanced the cost estimate calculation detail report to display the number of dependents.
Japan
Income Tax: Updated the enhanced income tax detail report to display zero when the nonresident flat tax rate of 20% is used.
Kenya
Social Security: Added a 1% housing contribution for employees and employers with a wage ceiling of KES 60,000, effective January 1, 2019.
Luxembourg
Income Tax: Increased the general tax credit by EUR 300 to EUR 600 and added a cap of EUR 80,000. This credit is not calculated when income exceeds the cap.
Social Security: Increased the wage ceiling by EUR 2,998 to EUR 122,913, effective August 1, 2018.
Malaysia
Income Tax: Increased the maximum Employees Provident Fund deduction by MYR 1,000 to MYR 7,000, effective January 1, 2019.
Mexico
Completed annual review with no material changes.
Mongolia
Income Tax: Changed from a 4 tier tax table with a top rate of 25% to a flat rate of 10%, effective January 1, 2018.
Norway
Income Tax: Added a nonresident rate of 25% for inbound employees with assignment duration of six months or less, effective January 1, 2019. Nonresident employees are not eligible for deductions.
Pakistan
Income Tax: Decreased the threshold for the lowest bracket and added two new brackets, effective July 1, 2018. The threshold for the top rate of 15% remains PKR 4.8 million.
Panama
Income Tax: Made the following changes:
Removed the child allowance deduction of PAB 250.
Updated the following allowances from taxable to nontaxable, effective January 1, 2019:
Primary or Secondary School Costs Host Country
Employee Airfare/Hotel En route to Foreign Location and on Repatriation
Income Tax & Social Security: Corrected the hypothetical and social tax calculations for outbound employees to treat the employer voluntary pension contribution as nontaxable.
Papua New Guinea
Income Tax: Corrected the employer voluntary pension contribution from nontaxable to taxable.
Portugal
Income Tax: Corrected the grossup only calculation for inbound employees when the non-habitual resident or nonresident rates apply. Previously, these rates were not consistently applied, resulting in a potential understatement of tax.
Puerto Rico
Social Security: Increased the OASDI wage ceiling by USD 4,500 to USD 132,900, effective January 1, 2019.
Singapore
Income Tax: Updated the enhanced income tax detail report to display zero when the nonresident flat tax rate of 15% is used.
Spain
Income Tax: Made the following changes:
Added the reduced nonresident rate of 19% applicable to inbound employees from an EEA country with assignment duration of six months or less, effective January 1, 2015.
Corrected the foreign income exemption when Qualifies for Employment Income Exemption is elected for outbound employees. The exemption is now limited to foreign source income up to the maximum limitation of EUR 60,100. Previously, only the maximum limitation was used, resulting in a potential understatement of tax.
Social Security: Corrected the health contribution exemption from EUR 1,500 to EUR 500. Previously the exemption amount resulted in a potential understatement of tax.
Switzerland
Completed annual review with no material changes.
All Supported Cantons
Completed annual review with no material changes.
Taiwan
Income Tax: Updated the enhanced income tax detail report to display zero when the nonresident flat rate of 18% is used.
Tanzania
Income Tax: Increased the nonresident rate by 15% to 30%, effective July 1, 2018.
Social Security: Corrected the outbound nonresident wage base to use assignment income. Previously, base compensation was used, resulting in a potential understatement of tax.
Ukraine
Income Tax: Changed the treatment of the following:
Employee Passport and Work Permit Costs and Per Diems Allowance to nontaxable.
Domestic Help Host Country and Housing Allowance Host Country to taxable.
Furniture and Appliances Rental Host Country, Housing Costs Host Country, and Utilities Host Country to taxable except when the assignment type is set to Short Term with Deductions.
Social Security: Increased the employer wage ceiling by UAH 222,000 to UAH 750,600, effective January 1, 2019.
United Kingdom
Social Security: Enhanced the employer contribution on the Cost Estimate (Years 1-6) report for partial years. The employer contribution is now calculated by reducing the total annual amount, which is calculated on both assignment and pre-assignment income, by the post-assignment portion. Previously, the amount included in the cost estimate was the annual value prorated across assignment months.
United States
Updated the following, effective January 1, 2019, unless indicated otherwise:
Income Tax:
Added a USD 500 credit for other dependents, effective January 1, 2018. This tax estimator will calculate the credit for dependents that are not eligible for the child tax credit.
Enhanced the calculation of the maximum employee voluntary pension deduction by including the USD 6,000 catch-up contribution, applicable to taxpayers age 50 and over. Also increased the deduction by USD 500 to include the inflationary update. Overall, the deduction increased by USD 6,500 to USD 25,000.
Increased the maximum total nontaxable voluntary pension contribution by USD 1,000 to USD 56,000.
Tax bracket thresholds. The threshold for the top rate of 37% increased by USD 10,300 to USD 510,300 for single taxpayers.
Standard deductions. The deduction increased by USD 200 to USD 12,200 for single taxpayers.
Increased the foreign earned income exclusion by USD 2,000 to USD 105,900.
Social Security: Increased the OASDI wage ceiling by USD 4,500 to USD 132,900.
California
Income Tax: Increased the following, effective January 1, 2018, to incorporate the inflationary updates released on October 17, 2018:
Tax bracket thresholds. The threshold for the top rate of 12.3% increased by USD 21,507 to USD 572,980 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 7,301 to USD 194,504 for single taxpayers.
Standard deductions and exemption credits.
North Carolina
Income Tax: Made the following changes, effective January 1, 2019:
Decreased the tax rate by 0.249% to 5.25%.
Increased the standard deductions. The standard deduction increased by USD 1,250 to USD 10,000 for single taxpayers.
Ohio
Income Tax: Updated the calculation for outbound employees to only include state tax when Returning to State Post-assignment? is Yes and Months in Host is less than 5 months. Previously, state tax was only calculated when assignment duration was less than 12 months.
South Carolina
Income Tax: Added a dependent exemption of USD 4,110, effective January 1, 2018, to incorporate the legislative update released on October 3, 2018.
Venezuela
On August 20, 2018, Venezuela established the Bolívar Soberano (VES) as its new national currency, replacing the Bolívar Fuerte (VEF). The new currency is exchanged at a fixed rate of VEF 100,000 to VES 1. As of release version 8.6.0, Equus Tax Engine has been updated to denominate in Bolívar Soberanos. In addition, the following changes were made:
Income Tax: Increased the tax unit to VES 17, which increased the threshold for the top tax rate of 34% by VES 101,928 to VES 102,000, effective September 11, 2018.
Social Security: Increased the monthly social security and unemployment insurance wage ceilings by VES 116,987 to VES 117,000 and VES 233,974 to VES 234,000, respectively, effective September 1, 2018.
