Worldwide: SKP Global Expansion Updates - January 2017 | Issue 11

Last Updated: 7 March 2017
Article by SKP  

AFRICA

Mauritius

VAT Act Section 14 amendment

Recently, Section 14 of the Value Added Tax (VAT) Act has been amended. Post amendment, individuals owing businesses who are not registered under VAT are required to account for VAT on services received from abroad.

Effective date: 2 February 2017

For more information, click here.

Nigeria

Change in the withholding tax rate on payments for buildings and construction related aspects

The Nigerian Finance Minister issued the amended regulations to reverse the reduced withholding tax (WHT) rate of 2.5% to the initial rate of 5% for all aspects of building and construction related activities.

The new regulations specifically state that all relevant transactions which were subjected to the 2.5% rate, under the 2015 regulations, should remain valid.

Taxpayers e-mail address allows electronic transmission of tax receipts

The Federal Inland Revenue Service (FIRS) released a notice in which they have requested the taxpayers to validate their corporate/official email addresses. This will allow the taxpayers to receive electronic tax collector's receipts from the FIRS.

AMERICAS

Argentina

Amendment in Argentina tax regime

Recently, amendments have been introduced by enactment of Law No. 27,346. The amendments are summarised below:

  • Increase in the annual income tax deductions for individuals and revision made to the non-taxable minimum amounts and family dependents.
  • Effective from 1 January 2017, a tax will be introduced on betting at the rate of 0.75% per beton the income derived from electronic gaming and automated betting machines. Also, an online betting tax at the rate of 2% is imposed on income derived from gambling and betting games operated through the internet, irrespective of the location of servers.

Extension of 'Productive Recovery Program'

The Productive Recovery Program (REPRO) was started 14 years ago to provide financial assistance to employers in order to help them overcome declining levels of employment. REPRO was intended to last as long as the national occupational emergency lasted.

As the national occupational emergency is extended till 31 December 2017, REPRO will continue to remain in effect till 31 December 2017.

Non-resident investors to obtain Tax Identification Number

Recently, the Federal Administration of Public Revenues (Administración Federal de Ingresos Publicos (AFIP)) in the Official Gazette announced a special Tax Identification Number (TIN) for non-resident entities.

The Argentinean government wants to monitor investments in financial products by non-resident entities.

Investments by non-resident entities are to be made through authorised intermediaries (banks, brokers, etc.), who will obtain the TIN for foreign investors.

Brazil

New withholding tax obligation

Recently, a private ruling 5/2017 (Solução de Consulta 5/2017) has been published in the Official Gazette. As per the new ruling, withholding tax will be applicable on payments made to individuals or legal entities resident in Canada by Brazilian sources for technical services provided, with or without the transfer of technology being involved. This transaction is treated as a royalty. Hence, the rate of withholding tax on such payments is 15% in Brazil.

For more information, click here.

Canada

Rates of social security contribution and EI premium for 2017

The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2017 will increase from CAD 54,900 to CAD 55,300. However, the basic exemption amount for 2017 will remain CAD 3,500. Individuals earning less than the basic amount are not required to make CPP contributions. There is no change in employee and employer contribution rates.

For more information, click here.

Maximum earnings for individuals who will be required to pay premiums for Employment Insurance (EI) for 2017 has been increased from CAD 50,800 to CAD 51,300. The employee contribution rate will decrease from 1.88% to 1.63% for a maximum contribution of CAD 836.19. The employer contribution rate is 2.282% for a maximum contribution of CAD 1,170.67.

For more information, click here.

Changes in the temporary foreign worker program

Immigration, Refugees and Citizenship Canada (IRCC) announced that from 13 December 2016, the four-year cumulative duration limit no longer applies to certain temporary foreign workers. Previously, the individuals who reached the four-year maximum duration must reside outside Canada for at least four years before being eligible for another work permit.

Applicants who were refused a work permit application prior to 13 December 2016 based on the four-year cumulative requirements can submit a new application.

For more information, click here.

Mexico

Guidance on electronic receipts rule

As per the update, the Mexican tax administration has issued a new guidance in January 2017 which provides standards for compliance with the electronically or digitally provided tax receipts. It includes the following:

  • Digital tax receipt online;
  • Digital tax receipt provided via the internet; and
  • Digital verification methods

The United States of America

Increase in salary requirement for employees exempt from overtime in New York

After the statutory increase in minimum wage rate, the New York State Department of Labour has issued notices for the implementation of new rules, declaring an increase in the minimum weekly salary thresholds. It has increased from USD 675 per week to USD 825 per week and USD 35,100 to USD 42,952 annually for qualifying for the executive and administrative overtime exemptions.

As per the federal overtime regulations, the federal salary threshold has been increased from USD 23,660 to USD 47,476 annually for white-collar exemptions.

For more information, click here.

New York Governor announces Minimum Wage Enforcement and Outreach Unit

A division consisting of 200 members has been formed known as the Minimum Wage Enforcement and Outreach Unit to make sure that all workers are being paid accurately (i.e. at least the minimum wage rate).

In case of misconduct, employers are liable to a fine of USD 3 for every hour in addition to the wages and up to 100% liquidated damages and civil penalties.

For more information, click here.

Morristown: New Jersey released notice for employee paid sick leave

The town of Morristown, New Jersey released its 'Notice of Employee Rights to Paid Sick Time'. As per the ordinance, all the employers in Morristown are required to circulate this notice to their employees and are liable to provide paid sick time per year, based on the size of the workforce. Detailed information like when, how, and the purpose of leave have been explained in the ordinance.

It also provides information about certain notices, record-keeping, and provisions relating to anti-retaliation.

For more information, click here.

Increase in salary threshold for exempt employees and paid family leave for 2018

Recently, the New York State Governor has passed a Bill which increases the minimum wage in different schedules in regions of three states, which are given below:

  • New York City;
  • Nassau, Suffolk; and
  • Westchester counties.

The rate has been increased to USD 10 per hour for year ended 2016 and will increase by USD 1 every year for the next five years. The resulting minimum wage will be USD 15 on 31 December 2021.

Increase in US Visa fee from December 2016

United States Citizenship and Immigration Services (USCIS) has announced that those who are filing for naturalisation, permanent residency and non-immigrant visas have to pay higher fees for most types of US immigration applications.

The following categories have seen an increase in fees for six years:

  1. For those who are applying for I129 non-immigrant work visas (L1 visa, H1B visa and H2B visa) have to pay USD 460 instead of USD 325.
  2. For those who are applying for I140 employment based immigrant visa petitions under EB1, EB2 and EB3 have to pay USD 700 instead of USD 580.
  3. Fees for the naturalisation application has been increased from USD 595 to USD 640.
  4. Fees for a Certificate of Citizenship application has been increased from USD 600 to USD 1,170.
  5. To register a permanent residence or adjust status, fees have been increased from USD 985 to USD 1,140.
  6. For US citizens to put in a petition for a relative who wants to immigrate to the US (form I-130), the fee has been increased from USD 420 to USD 535.

For more information, click here.

New form requirement (W-4) for employers

At the time of hiring a new employee, the employer is required to obtain a signed Form W-4 from the IRS.

Form W-4 provides information about the current tax rates, exemptions, etc. Although Form W-4 gets revised each year, it is valid till an employee provides a new form.

For more information, click here.

Proposed bill to limit corporate deduction up to 1 Million

To limit corporate tax deduction which are allowed as performance bonus, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act has been introduced.

This Bill amends the Internal Revenue Code, with respect to the USD 1 million limitation on the deductibility of employee compensation, to:

  • Extend such limitation to any individual who is a current or former officer, director or employee of a publicly-held corporation;
  • Eliminate the exemption from such limitation for compensation payable on a commission basis or upon the attainment of a performance goal; and
  • Make such limitation applicable to all publicly-held corporations that are required by the Securities and Exchange Commission to register securities and provide periodic reports to their investors.

For more information, click here.

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