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Key Features

Release version 8.3.0 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
Finland – Sri Lanka Mexico – Philippines Senegal – United Arab Emirates	Jan 1, 2019 Jan 1, 2019 Jan 1, 2015

Social Security Agreements

The following social security agreements were added:

Agreement countries	Effective date	Coverage period
China – Spain Germany - Philippines	Mar 1, 2018 Jun 1, 2018	72 Months 48 Months

Country Updates

Argentina

Social Security: Increased the employee wage ceiling by ARS 60,808 to ARS 1.1 million, effective March 1, 2018.

Belgium

Income Tax: Corrected the standard business deduction to EUR 4,720. It was incorrectly changed to EUR 7,420 in version 8.2.

Brazil

Income Tax:

Corrected the outbound calculation to exclude Employer Pension Contribution from the hypothetical income and social wage base.
Removed short term logic from Housing Allowance and Shipment of Pets, resulting in taxable treatment for all assignment types and durations. Previously, Housing Allowance was treated as nontaxable when assignment duration was 12 months or less and Shipment of Pets was treated as nontaxable when duration exceeded 12 months. These two tax inputs remain as taxable for Permanent Assignment Type.

Social Security: Increased the wage ceiling by BRL 1,492 to BRL 73,395, effective January 1, 2018.

Chile

Completed annual review with no material changes.

Colombia

Social Security: Increased the wage ceiling by COP 13 million to COP 234 million, effective January 1, 2018.

Costa Rica

Social Security: Increased the employee contribution rate by 1% to 10.3%.

Dominican Republic

Social Security: Increased the health and pension contribution wage ceilings by DOP 82,680 to DOP 1.4 million and by DOP 165,360 to DOP 2.8 million, respectively, effective November 1, 2017.

Ecuador

Income Tax: Made the following changes, effective January 1, 2018:

Increased the nonresident rate by 3% to 25%.
Decreased the personal deduction by USD 26 to USD 14,651.

El Salvador

Social Security: Made the following changes, effective January 1, 2018:

Increased the wage ceiling for pension contribution by USD 2,172 to USD 78,000.
Increased the employee and employer pension rates by 1% to 7.25% and 7.75%, respectively.
Decreased the employer social contribution rate by 1% to 7.5%, as a result of removing the 1% payroll tax.

Guatemala

Completed annual review with no material changes.

Hong Kong

Income Tax: Made the following changes, effective April 1, 2018:

Updated the rates and brackets, including increasing the table from 4 to 5 tiers. The threshold for the top rate of 17% increased by HKD 65,000 to HKD 200,000.
Increased the child allowance by HKD 20,000 to HKD 120,000.

India

Income Tax: Increased the educational cess rate by 1% to 4%, effective April 1, 2018.

Israel

Income Tax: Increased the bracket thresholds, effective January 1, 2017. The threshold for the top rate of 50% increased by ILS 1,880 to ILS 641,880.

Social Security: Increased the bracket thresholds, effective January 1, 2018. The wage ceiling increased by ILS 1,560 to ILS 520,440.

Morocco

Income Tax & Social Security: Corrected the treatment of the following moving expenses to be nontaxable for all assignment types. Previously, they were taxable unless the assignment type was Short Term with Deductions and the duration was 12 months or less:

Airfare/Hotel En route to Foreign Location or on Repatriation
Auto Lease Host Country
Employer Provided Driver Host Country
En Route Meals
Temporary Housing in Foreign Country
Temporary Living Expenses
Transportation of Household Goods to Foreign Location or on Repatriation

Panama

Completed annual review with no material changes.

Peru

Completed annual review with no material changes.

Philippines

Income Tax: Corrected the deduction for exempted income for inbound assignments to include a prorated portion of the 13th month salary. Previously, the deduction was understated for assignments with monthly salary less than PHP 90,000.

Spain

Social Security:

Corrected the wage base for outbound assignments to exclude Per Diems.
Increased the wage ceiling by EUR 1,310 to EUR 45,014, effective January 1, 2017.

Sweden

Income Tax: Corrected the grossup calculation to deduct the prorated value of hypothetical income tax when the Qualifies for 6 Month & 1 Year Rule input is Yes. Previously, the annual value was deducted, resulting in an understatement of tax.

Switzerland

Schaffhausen

Income Tax: Decreased the cantonal and municipal tax coefficients by 4% to 111% and 93%, respectively, effective January 1, 2018.

Trinidad and Tobago

Income Tax: Changed from a flat rate of 25% to a 2-tier tax table, effective January 1, 2017. The threshold for the new top rate of 30% applies to income above TTD 1 million.

United Kingdom

Income Tax:

Added the Use Scottish Tax Rates? Select Yes to use them instead of the UK tax table. The top Scottish rate of 46% applies to income above GBP 150,000, effective April 6, 2018.
Corrected the tax treatment of the following tax inputs:
Employee Medical Emergencies Host Country is nontaxable for outbound assignments and for inbound assignments when assignment type is Short Term with Deductions and assignment duration is 24 months or less. Previously, it was also treated as nontaxable as part of Travel and Subsistence Relief.
Family Pre assignment Medical and Immunization is nontaxable. Previously, it was always treated as taxable.
Health Benefits Host Country is nontaxable for outbound assignments. Previously, it was always treated as taxable.
Pre Assignment/Pre Repatriation Visit and Transportation of Household Goods to Foreign Location and on Repatriation are nontaxable when assignment type is Short Term with Deductions and assignment duration is 24 months or less. Previously, they were treated as nontaxable as part of Travel and Subsistence Relief.
Corrected employee voluntary pension contributions for inbound employees from Netherlands and Switzerland to be deductible.

United States

Income Tax: Made the following changes, effective January 1, 2018:

Updated the 2018 host housing expenses limitations for high cost locations. If a location is not selected, the foreign housing exclusion will be calculated using the standard limitation amount of USD 31,170.
Decreased the foreign earned income exclusion by USD 200 to USD 103,900.

Minnesota

Income Tax: Corrected the foreign tax credit for outbound assignments to calculate for tax paid to Canada and Canadian provinces only. Previously, a credit was provided for Swiss cantonal tax, resulting in a potential understatement of tax.

New York

Various American States

Income Tax:

Added a deduction for moving expenses to states that do not conform with the federal taxable treatment per the Tax Cuts and Jobs Act of 2017 (TCJA). This change was made to Massachusetts, New Jersey, and New York.
Corrected state itemized deductions when state tax exceeds USD 10,000. Previously, itemized deductions were understated, resulting in an overstatement of tax. This was introduced in the v.7.6.1 update for the TCJA. This change was made to Arkansas, California, Minnesota, New York and North Carolina.

Changes to additional states will be made in future releases as listed in Appendix B.

Venezuela

Income Tax: Increased the tax unit to VEF 850, which increased the threshold for the top tax rate of 34% by VEF 3.3 million to VEF 5.1 million, effective May 1, 2018.

Social Security: Increased the monthly social security and unemployment insurance wage ceilings by approximately VEF 1.3 million to VEF 2 million and VEF 2.6 million to VEF 4 million, respectively, effective March 1, 2018.