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Key Features
Release version 9.4.0 features calculation and rate changes to reflect current tax law.
The effective dates disclosed below indicate when the changes enter into force.
Social Security Agreements
The following social security agreements were added:
Agreement countries
|
Effective date
|
Coverage period
|
Japan – Slovakia
|
July 1, 2019
|
60 Months
|
Mongolia – Poland
|
July 1, 2019
|
60 Months
|
Country Updates
Australia
Income Tax: Added a credit for resident employees with taxable income below AUD 126,000, effective July 1, 2019. The maximum amount available from this low and middle income credit (LMITO) is AUD 1,080.
Other Employer Costs: Decreased the portion of Employee Home R&R and Rotational Leave and Family Home Leave subject to fringe benefits tax from 100% to 50%.
Bangladesh
Completed annual review with no material changes.
Bulgaria
Completed annual review with no material changes.
China
Social Security: Decreased the following, effective May 1, 2019, unless indicated otherwise:
Inbound and outbound employer contribution rates, respectively:
Beijing by 3% to 27.8% and 39.8%, effective July 1, 2019.
Guangzhou by 1.5% to 22% and 27%.
Shanghai by 4.5% to 27.7% and 34.7%.
Annual wage ceilings:
Beijing by CNY 22,032 to CNY 282,780, effective July 1, 2019.
Guangzhou by CNY 87,708 to CNY 208,140.
Increased Shanghai by CNY 38,844 to CNY 295,596.
Denmark
Income Tax: Corrected the extra pension contribution deduction to calculate on the total contribution up to the limitation. Previously, the deduction was calculated only on the excess contribution over DKK 55,900, resulting in an overstatement of tax.
France
Income Tax: Removed the Calculate 2018 Transition Credit? input. The setting selected prior to version 9.4 will continue to apply to recalculations.
Income Tax & Social Security: Updated Primary or Secondary School Costs Host Country to be nontaxable for temporary assignment types. This line item remains taxable for outbound assignments for income tax.
India
Completed annual review with no material changes.
Indonesia
Income Tax: Enhanced the calculation detail report by adding the income tax table and social security rates.
Italy
Income Tax: Added the Qualifies for Inbound Concession? input to the host tax estimator. Select Yes to exempt 70% of assignment income when assignment duration is 24 months or more and the Year Column Label (on the Line Items tab) is 2020 or later. The exemption is 50% for earlier years.
Myanmar
Completed annual review with no material changes.
Netherlands
Income Tax: Corrected the inbound expatriate concession for grossup only. Previously, the concession was not consistently applied, resulting in an overstatement of tax.
New Zealand
Income Tax: Increased the wage ceiling for ACC Earners Levy by NZD 2,184 to NZD 128,470, effective April 1, 2019.
Pakistan
Income Tax: Updated the tax table, effective July 1, 2019. The current twelve bracket table includes a top rate of 35% applicable to income over PKR 75 million. The prior seven bracket table included a top rate of 25% applicable to income over PKR 8 million.
Papua New Guinea
Completed annual review with no material changes.
Romania
Income Tax:
Increased the maximum deductible employee pension contribution by RON 100 to RON 1,900, effective June 1, 2019.
Updated employer voluntary pension contribution to be taxable above RON 1,900.
Russia
Social Security: Increased the following, effective January 1, 2019:
The threshold for the higher pension contribution rate by RUB 129,000 to RUB 1,150,000.
The wage ceiling for social insurance contributions by RUB 50,000 to RUB 865,000.
Singapore
Social Security: Added the CPF Contribution Rate input to provide the ability to select contribution rates based on employees’ age. The employee and employer rates of 20% and 17%, respectively, remain the default selection.
Slovakia
Income Tax:
Increased the following, effective July 1, 2019:
Threshold for the top rate of 25% by EUR 1,895 to EUR 37,163.
Personal and spousal allowances by EUR 205 to EUR 4,035.
Changed the following allowances to be nontaxable for temporary assignment types:
Employee and Family Pre-Assignment Medical Exam and Immunization
Employee and Family Medical Emergencies Host Country
Employee and Family Airfare/Hotel en route to Foreign Location and on Repatriation
Transportation of Household Goods to Foreign Location and on Repatriation
Meals en route
Temporary Housing in Foreign and Home Country
Temporary Living Expenses
Employee and Family Home Leave
Family Annual Examinations
Primary or Secondary School Costs Host Country
Social Security: Increased the wage ceiling by EUR 3,528 to EUR 80,136, effective January 1, 2019.
Slovenia
Completed annual review with no material changes.
Spain
Income Tax: Corrected the Per Diems Allowance to be nontaxable for outbound employees with temporary assignment types when assignment duration is nine months or less. Previously, the allowance was treated as taxable unless the short term with deductions assignment type applied.
Sri Lanka
Income Tax: Replaced the LKR 250,000 personal deduction with a LKR 700,000 employment deduction, effective April 1, 2018.
Sweden
Income Tax: Added a deduction for inbound employees from EEA countries for social security contributions to the home country.
Turkey
Completed annual review with no material changes.
Ukraine
Completed annual review with no material changes.
United Kingdom
Social Security:
Made the following changes to the wage base for outbound equalized nonresidents:
Included only the assignment portion of hypothetical income tax in partial years. The wage base continues to include annual amounts of actual and hypothetical social security, representing the incremental taxable benefits.
Expanded the Hypo Taxes Withheld disclosure on the cost estimate calculation grossup details to separately display the hypothetical prorated income tax and annual social security.
This change will be rolled out to other countries in an upcoming release.
Added Actual Employer Social Tax to the cost estimate calculation details information section for outbound equalized assignments. If the 52-week rule applies, the required contribution is displayed. Otherwise, the calculated amount for the assignment period is displayed.
United States
Income Tax:
Added the Pension Deduction Cap input for outbound assignments to provide the ability to select the maximum employee pension deduction of USD 19,000 when under age 50 or USD 25,000 when 50 and older.
Updated the Tax Services to be taxable when the Away From Home concession applies, i.e. assignment duration is 12 months or less.
Various States
Income Tax: Corrected the calculation for states that allow a credit for foreign taxes paid when assignment income is less than the maximum allowable foreign earned income and housing exclusion. Previously, the calculation resulted in a potential overstatement of state tax.
Arizona
Income Tax: Made the following changes, effective January 1, 2019, unless indicated otherwise, to incorporate the legislative update enacted May 31, 2019:
Removed the deduction for moving expenses. Arizona now conforms to federal taxable treatment per the Tax Cuts and Jobs Act of 2017, effective January 1, 2018.
Updated rates and brackets, including decreasing the table from 5 to 4 tiers. The new top rate of 4.5% applies to income over USD 159,000 for single taxpayers.
Increased the standard deductions to federal amounts.
Removed the personal and dependent exemptions.
Arkansas
Income Tax: Added an itemized deduction for income tax paid to a foreign country.
Delaware
Income Tax: Added the Calculate Local Income Tax? input. Select Yes to calculate the 1.25% Wilmington local tax.
Idaho
Income Tax: Increased the bracket thresholds, effective January 1, 2019. The threshold for the top rate of 6.9% increased by USD 275 to USD 11,554 for single taxpayers.
Maine
Income Tax:
Added a safe harbor so that outbound employees are exempt from state tax when assignment duration is 15 months or more.
Corrected the foreign tax credit for outbound assignments to calculate for tax paid to Canadian provinces only. Previously, a credit was provided for Swiss cantonal tax, resulting in a potential understatement of tax.
Massachusetts
Income Tax: Updated the foreign tax credit for outbound assignments to calculate for tax paid to Puerto Rico.
Minnesota
Income Tax: Made the following changes, effective January 1, 2019, to incorporate legislation enacted May 30, 2019:
Removed the deduction for moving expenses. Minnesota now conforms to federal taxable treatment per the Tax Cuts and Jobs Act of 2017.
Updated deductions and exemptions as follows. Amounts shown apply to single taxpayers:
Increased the standard deduction by USD 5,550 to the federal amount of USD 12,200.
Updated the personal exemption to apply only to dependents.
Added a standard deduction phaseout applicable to income over USD 194,650.
Increased the itemized deduction phaseout threshold by USD 4,600 to USD 194,650.
Increased the exemption phaseout threshold by USD 8,300 to USD 194,650.
Decreased the following in the tax table:
Rate for the second lowest bracket by 0.25% to 6.8%.
Bracket thresholds for the top rate of 9.85%. The threshold decreased by USD 2,170 to USD 161,720 for single taxpayers.
Mississippi
Income Tax: Updated the calculation to accept federal foreign earned income and housing exclusions.
Montana
Income Tax: Updated the calculation to accept federal foreign earned income and housing exclusions.
Vermont
Income Tax:
Corrected the foreign tax credit for outbound assignments to calculate for tax paid to Canadian provinces only. Previously, a credit was provided for Swiss cantonal tax, resulting in a potential understatement of tax.
Increased the tax bracket thresholds, effective January 1, 2019. The threshold for the top rate of 8.75% increased by USD 4,750 to USD 200,200 for single taxpayers.
Virginia
Income Tax: Increased the standard deductions, effective January 1, 2019. The deduction increased by USD 1,500 to USD 4,500 for single taxpayers.
Wisconsin
Income Tax: Decreased the 2nd lowest tax rate by 0.6% to 5.2%, effective January 1, 2019.
