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Key Features
Release version 9.6.0 features calculation and rate changes to reflect current tax law.
Additionally, the annual review process has been enhanced to increase sophistication. The Country Updates section includes changes made as a result of this new process.
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
|
Angola – Portugal
Costa Rica – Mexico
Finland – Hong Kong
Ghana – Singapore
Saudi Arabia – United Arab Emirates
|
January 1, 2020
January 1, 2020
January 1, 2019
January 1, 2020
January 1, 2020
|
Social Security Agreements
Increased the coverage period of the Israel – United Kingdom agreement by 36 months to 60 months. Also added the following social security agreements:
Agreement countries
|
Effective date
|
Coverage period
|
Luxembourg – Philippines
|
January 1, 2020
|
60 Months
|
Philippines – Sweden
|
November 1, 2019
|
60 Months
|
Slovenia – South Korea
|
October 1, 2019
|
60 Months
|
Country Updates
Austria
Income Tax:
Added period awareness to support the abolishment of the 55% tax bracket, effective January 1, 2021. The 55% rate continues to apply to income above EUR 1 million through calculation year 2020. The rate of 50% applies thereafter.
Limited the deduction of the following removal costs to 1/15th of assignment income:
Temporary Housing in Home Location and Foreign Country
Temporary Living Expenses
En Route Meals
Shipment of Pets
Limited the expatriate concession to temporary assignments with duration of 60 months or less.
Changed the following line items to be taxable:
Primary or Secondary School Costs Host Country
Relocation Allowance
Reimbursement of Loss on Sale of House, Household Goods, and Auto
International Mobility (Settling-In) Allowance
Family Correspondence Courses Host Country
Changed the following line items to be nontaxable for outbound employees:
Employee and Family Airfare/Hotel En route to Foreign Location
Transportation of Household Goods to Foreign Location
Updated Employee Home, R&R, and Rotational Leave to be nontaxable up to EUR 3,672 when Homes Maintained in Both Countries? is Yes.
Azerbaijan
Income Tax: Added the Use Preferential Rates? input to calculate tax for non-oil and gas industry employees at 14% of assignment income that exceeds AZN 8,000, available from 2019 through 2025.
Belgium
Income Tax: Changed the following line items to be nontaxable:
Health Benefits Host Country
Employee and Family Medical Emergencies Host Country
Canada
Income Tax: Changed the following line items to be nontaxable at the federal and provincial levels except for Quebec:
Employer Paid Medical & Dental
Employee and Family Medical Emergencies Host Country
Social Security: Changed the following, effective January 1, 2020:
Increased the Canada Pension Plan wage ceiling and contribution rate by CAD 1,300 to CAD 58,700 and 0.2% to 5.3%, respectively.
Increased the Employment Insurance wage ceiling by CAD 1,100 to CAD 54,200.
Decreased the Employment Insurance contribution rate by 0.1% to 1.6% for employees and by 0.6% to 2.2% for employers.
Prince Edward Island
Income Tax: Increased the personal, spousal, and dependent amounts, effective January 1, 2020. The personal amount increased by CAD 840 to CAD 10,000, and the spousal and dependent amounts increased by CAD 713 to CAD 8,493.
Quebec
Social Security: Decreased the Employment Insurance contribution rate by 0.1% to 1.2% for employees and by 0.1% to 1.7% for employers, effective January 1, 2020.
China
Income Tax: Added the following as a result of the 2018 tax reform:
Bonus Calculation Method? input to provide the option to continue calculating bonus separately using monthly tax rates through 2021 or to include bonus in gross income and tax at annual rates.
Period awareness to support the expiration of the exclusion of certain line items for inbound employees, effective January 1, 2022. These line items are excluded when Chinese National is set to No, through calculation year 2021.
Annual tax table for residents. The monthly tax table continues to apply for inbound employees with assignment duration of less than six months.
Costa Rica
Income Tax: Decreased the tax bracket thresholds and added two new brackets, effective October 1, 2019. The new top rate of 25% applies to income over CRC 4.3 million.
Denmark
Income Tax:
Increased the following, effective January 1, 2020:
Basic tax rate by 0.1% to 12.1%.
Top bracket threshold by DKK 17,600 to DKK 531,000.
Personal allowance by DKK 300 to DKK 46,500.
Maximum employment allowance by DKK 2,200 to DKK 39,400.
Maximum job allowance by DKK 500 to DKK 2,600.
Maximum pension and extra pension deductions by DKK 1,300 to DKK 57,200 and DKK 1,600 to DKK 73,100, respectively.
Job allowance threshold by DKK 4,200 to DKK 195,800.
Expatriate concession minimum salary by DKK 18,000 to DKK 817,200.
Employment allowance rate by 0.4% to 10.5%.
Limited the double household deduction to temporary assignment types. Previously, it was calculated for all assignments with a duration of 24 months or less when Homes Maintained in Both Countries? is Yes.
Removed the employee pension deduction cap at 20% of income. The maximum deduction remains DKK 57,200.
Changed the following line items to be taxable:
Family Airfare/Hotel En route to Foreign Location and on Repatriation
Primary or Secondary School Costs Host Country
Dominican Republic
Social Security: Increased the health and pension contribution wage ceilings by DOP 198,720 to DOP 1.6 million and by DOP 397,440 to DOP 3.2 million, respectively, effective August 1, 2019.
Finland
Social Security: Decreased the employee and employer contribution rates by 1% to 9.8% and by 2.1% to 21.2%, respectively, effective January 1, 2019.
Germany
Income Tax: Corrected the calculation for inbound nonresidents by removing the basic exemption of EUR 9,168 from the effective rate calculation and adding the private health insurance deduction of EUR 1,900. The previous calculation resulted in a potential understatement of tax.
Social Security: Updated the nursing contribution to use the higher rate of 1.8% for employees with no dependents.
Greece
Income Tax: Added a personal credit for resident employees, effective January 1, 2020. The maximum credit of EUR 1,450 is available for employees with three or more dependents. The credit is subject to a phaseout of 1% of taxable income over EUR 20,000.
Hungary
Social Security: Added the Exempt Employer Social Security? input to provide the option to exempt employer contributions for temporary assignment types when assignment duration is 24 months or less.
India
Income Tax:
Changed Employer Pension Contribution to be nontaxable for outbound assignments. This line item remains taxable for inbound assignments.
Corrected the grossup only calculation when income exceeds INR 5 million by combining the regular tax and surtax tables. The previous calculation resulted in an overstatement of tax when tax grossup increased taxable income into a higher surtax bracket.
Corrected the treatment of the following line items when the grossup only calculation method is used and Include In Grossup is set to No:
Primary or Secondary School Costs Host Country and Education Allowance. Previously, the education deduction was calculated, resulting in an understatement of tax:
Housing Costs Host Country. Previously, the taxable value of housing was calculated, resulting in an overstatement of tax.
Italy
Income Tax:
Enhanced the inbound concession to apply for the first five years of the assignment.
Changed the following line items to be nontaxable:
Temporary Housing in Home and Foreign Country
Temporary Living Expenses
Lease Termination Home Country
Mexico
Income Tax: Changed the following line items to be taxable:
Transportation of Household Goods to Foreign Location and on Repatriation
Home Purchase Costs on Repatriation
Pre-Assignment/Pre-Repatriation Visit
Departure/Destination Services
Shipment of Pets
Netherlands
Income Tax: Updated the following when the expatriate concession applies:
Primary or Secondary School Costs Host Country to nontaxable.
Host Housing Costs in excess of 18% of base salary, and Utilities Host Country to be included in extraterritorial costs and eligible for exemption.
Norway
Income Tax:
Removed the standard deduction. Previously, the standard deduction was 10% of assignment income up to NOK 40,000.
Added the following line items to be nontaxable for assignments of 24 months or less if the employee maintains homes in both home and host countries:
Housing Costs Host Country
Utilities Host Country
Employee Home, R&R, and Rotational Leave
Removed the Employed on Norwegian Continental Shelf? input for inbound assignments.
Poland
Income Tax:
Made the following changes, effective January 1, 2020:
Decreased the lower rate by 1% to 17%. This rate applies to income up to PLN 85,528.
Increased the standard deduction by PLN 1,665 to PLN 3,000.
Expanded the social security deduction to include contributions to the home country for equalized assignments from an EEA country.
Puerto Rico
Social Security: Increased the OASDI wage ceiling by USD 4,800 to USD 137,700, effective January 1, 2020.
Russia
Income Tax: Changed Primary or Secondary School Costs Host Country to be taxable.
Slovenia
Income Tax: Made the following changes, effective January 1, 2020:
Decreased the 2nd and 3rd lowest tax rates and increased the bracket thresholds. The threshold for the top rate of 50% increased by EUR 1,093 to EUR 72,000.
Increased the personal deduction by EUR 197 to EUR 3,500.
Spain
Income Tax: Changed the personal and family credit to be calculated using the progressive tax table instead of the lowest rate of 19%. Additionally, the base of the personal and family credit, at EUR 5,550 for the taxpayer and increased for each dependent, is excluded from taxable income.
Sweden
Income Tax:
Enhanced the calculation detail report by adding the income tax table and social security rates.
Added the Homes Maintained in Both Countries? input to exclude the following line items from assignment income for temporary assignment types:
Goods and Service Allowance
Employee Home, R&R and Rotational Leave
Housing Costs Host Country
Added a deduction for voluntary pension contributions. Employee contributions are deductible for outbound employees, and inbound employees from EEA countries. Employer contributions are nontaxable for inbound employees up to the lower of 35% of assignment income and SEK 473,000.
Increased the following, effective January 1, 2020:
Employment income credit amounts and thresholds. The maximum credit increased by SEK 477 to SEK 28,183 and the phaseout threshold increased by SEK 10,832 to SEK 640,443.
Personal allowance amounts and thresholds. The maximum allowance increased by SEK 616 to SEK 36,421 and the phaseout threshold increased by SEK 2,489 to SEK 147,104.
Decreased the municipal tax rate by 2% from the country average to the Stockholm rate of 30%.
Switzerland
Basel Stadt
Income Tax: Made the following changes, effective January 1, 2020. Amounts shown apply to single taxpayers:
Decreased the lowest tax rate by 1% to 21.5%. This rate applies to income up to CHF 200,000.
Increased the insurance premium deductions. The deduction increased by CHF 1,200 to CHF 3,200.
Vaud
Income Tax: Made the following changes to the insurance premium deduction, effective January 1, 2020:
Increased the deduction by CHF 1,200 to CHF 3,200 for single taxpayers.
Decreased the deduction for dependents by CHF 100 to CHF 1,200.
United Kingdom
Income Tax: Changed the following line items to be nontaxable for temporary assignment types, for outbound assignments and inbound assignments with assignment duration of five years or less:
Employee Passport and Work Permit Costs
Family Passports and Visas
Social Security: Added the Always Calculate Hypo Social Security? input to provide the ability to continue calculating hypothetical social security when Automatic is selected for Calculate Social Taxes? and no actual social security is calculated. This generally applies when the host authority does not require social security contributions for inbound assignees such as Singapore.
United States
Income Tax:
Increased the following, effective January 1, 2020. Amounts shown apply to single taxpayers:
Tax bracket thresholds. The threshold for the top rate of 37% increased by USD 8,100 to USD 518,400.
Standard deductions. The deduction increased by USD 200 to USD 12,400.
Maximum employee voluntary pension deductions by USD 500 to USD 19,500 for employees under age 50 and by USD 1,000 to USD 26,000 for employees 50 and older.
Maximum total nontaxable voluntary pension contributions by USD 1,000 to USD 57,000.
Foreign earned income exclusion by USD 1,700 to USD 107,600.
Corrected the alternative minimum tax (AMT) when the child and other dependents credit is taken. Previously, AMT was not reduced by the credit, resulting in a potential overstatement of tax.
Social Security: Increased the OASDI wage ceiling by USD 4,800 to USD 137,700, effective January 1, 2020.
Iowa
Income Tax: Increased the following, effective January 1, 2020. Amounts shown apply to single taxpayers:
Tax bracket thresholds. The threshold for the top rate of 8.5% increased by USD 1,260 to USD 74,970.
Standard deductions. The deduction increased by USD 30 to USD 2,110.
Kentucky
Income Tax: Increased the standard deduction by USD 60 to USD 2,650, effective January 1, 2020.
Michigan
Income Tax: Increased the personal exemption by USD 350 to USD 4,750, effective January 1, 2020.
Missouri
Income Tax: Made the following changes, effective January 1, 2019:
Increased the top tax rate by 0.1% to 5.5%.
Added a phaseout for the federal tax deduction. The maximum deduction is USD 5,000, for single taxpayers, and is phased out completely when income exceeds USD 125,000.
Oregon
Income Tax: Decreased the two lowest tax bracket thresholds and three lowest rates, effective January 1, 2020. The threshold for the top rate of 9.9% remains USD 125,000 for single taxpayers.
