Links Labour Law Insider – Latest Tax, Payroll & Labour Law Updates
Welcome to Links’ Labour Law Insider, our quarterly publication. Our Q2 edition provides a detailed overview of key updates in taxation, labour law, payroll, and visa regulations, offering a clear and comprehensive summary of recent legislative changes to be aware of in Asia Pacific and the Middle East.
For further insights into market developments, we invite you to subscribe to our blog to stay informed on the latest HR news, or contact our team to learn more about how these changes may affect your business.
- Australia
- Australia to Introduce Mandatory Payday Super From July 2026
- Hong Kong
- Hong Kong to Increase Statutory Minimum Wage
- Hong Kong Launches First Phase of Pillar Two Portal
- Hong Kong Raises Stamp Duty on High-Value Residential Property and Relaxes Intra-Group Relief
- Indonesia
- Indonesia’s President Orders Timely Payment of Eid Allowance to Workers
- BPJS Ketenagakerjaan Pension Program Updates for 2026
- India
- India Releases Draft Income-Tax Rules 2026
- India’s Union Budget 2026-27 Introduces Tax Concessions and Transfer Pricing Reforms
- Japan
- Disability Employment Quota Increase
- Enhanced Whistleblower Protections
- Promotion of Women’s Participation in the Workplace
- Employment Insurance Contribution Rates to be Lowered
- Mainland China
- China Introduces Import Tax Incentives for Research and Education Institutes
- Updates to Work-Related Injury Insurance Benefits
- China Issues New VAT Registration and Administration Rules
- Malaysia
- Malaysia Revises Employment Pass Salary Policy
- Malaysia Enhances EPF Schemes and Retirement Savings Framework
- Introduction of LINDUNG 24 Jam
- Saudi Arabia
- Saudi Arabia Increases Saudization Requirements for Marketing Professions
- Saudi Arabia Amends Labour Law Penalties Schedule
- Singapore
- Singapore to Raise Retirement and Re-Employment Age
- Singapore Budget 2026 Outlines Key HR and Employment Measures
- South Korea
- South Korea Increases Corporate Income Tax Rates
- Taiwan
- Taiwan Clarifies VAT Reporting Rules for Online Content Creators
- Working Parents To Get a One-Hour Daily Worktime Reduction
- Thailand
- Thailand Extends Deadline for Migrant Worker Permit Renewals
- United Arab Emirates
- UAE Issues Electronic Invoicing Guidelines
If you have any questions regarding the content please contact Bella Khan at bella.khan@linksinternational.com or Lynette Liew at lynette.liew@linksinternational.com.
AUSTRALIA
Australia to Introduce Mandatory Payday Super From July 2026
Effective 1 July 2026, employers in Australia will be required to pay superannuation contributions at the same time as employees’ wages, replacing the current quarterly payment schedule. Under the new requirement, contributions must be received by employees’ superannuation funds within seven business days of each payday.
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HONG KONG
Hong Kong to Increase Statutory Minimum Wage
Effective 1 May 2026, Hong Kong will increase its Statutory Minimum Wage (SMW) from HKD 42.10 to HKD 43.10 per hour.
The adjustment follows the Chief Executive in Council’s acceptance of the Minimum Wage Commission’s recommendation under the enhanced annual review mechanism.
Hong Kong Launches First Phase of Pillar Two Portal
The Hong Kong Inland Revenue Department launched the first phase of the Pillar Two Portal on 19 January 2026. The portal is now available for electronic filing of top-up tax notifications by a Part 4AA entity of an in-scope multinational enterprise (MNE) group for a fiscal year beginning on or after 1 January 2025.
The launch enables affected entities to submit the required notification online as part of Hong Kong’s implementation of the global minimum tax and Hong Kong minimum top-up tax regime. The Inland Revenue Department has also made user guides and an e-Demo available to assist taxpayers in using the portal.
Hong Kong Raises Stamp Duty on High-Value Residential Property and Relaxes Intra-Group Relief
Hong Kong has announced two stamp duty changes under the 2026–27 Budget. For residential properties valued above HKD 100 million, the ad valorem stamp duty rate has increased from 4.25% to 6.5%. The new rate applies to instruments for the sale, purchase, or transfer of residential properties executed on or after 26 February 2026.
The Government has also announced a relaxation of the conditions for intra-group stamp duty relief under section 45 of the Stamp Duty Ordinance (Cap. 117). The revised criteria expand the scope of eligible associated body corporates for relief on intra-group transfers of assets. This proposal applies to instruments for the sale, purchase, or transfer of assets executed on or after 25 February 2026.
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INDONESIA
Indonesia’s President Orders Timely Payment of Eid Allowance to Workers
President Prabowo Subianto has instructed relevant ministries to review the distribution of the 2026 Eid al-Fitr religious holiday allowance, known as THR, to ensure workers receive the payments on time.
BPJS Ketenagakerjaan Pension Program Updates for 2026
BPJS Ketenagakerjaan has announced several important updates to Indonesia’s Pension Security Program (Jaminan Pensiun) for 2026. These changes are implemented in accordance with Government Regulation (PP) No. 45 of 2015 on Pension Program Administration.
Some changes include:
- Adjustment of Pension Contribution Wage Ceiling – BPJS Ketenagakerjaan has updated its 2026 pension contribution parameters following Indonesia’s 5.11% GDP growth in 2025.
- New Retirement Age in 2026 – Starting in 2026, the official retirement age under the BPJS Ketenagakerjaan Pension Program has increased to 59.
- Pension Benefit Range for 2026 – For 2026, monthly pension benefits range from Rp 411,400 to Rp 4,932,300 for eligible participants.
- Maximum Wage Limit for Pension Contribution Calculation – From the March 2026 contribution period, pension contributions will be capped at a maximum monthly wage of Rp 11,086,300.
- Employees Able to Check JHT Balance via JMO App – Participants can review their 2025 JHT balance and contribution details through the Jamsostek Mobile (JMO) app.
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INDIA
India Releases Draft Income-Tax Rules 2026
India’s Income Tax Department has released the draft Income-tax Rules 2026, which are scheduled to take effect from 1 April 2026. The proposed rules cover a broad range of tax matters for both individual taxpayers and companies, with a focus on simplifying tax compliance, expanding faceless assessments, and reducing interpretational disputes.
The draft rules and related forms have been published for public consultation and will remain open for feedback until 22 February 2026. Stakeholders and members of the public have been invited to review the proposals and submit comments during the consultation period.
India’s Union Budget 2026-27 Introduces Tax Concessions and Transfer Pricing Reforms
India’s Union Budget 2026–27 introduces a broad package of tax measures covering data centres, transfer pricing, non-resident incentives, cooperative societies, and tax administration. The Budget confirms that the new Income Tax Act will take effect from April 2026 and includes several changes aimed at increasing certainty for cross-border business and investment.
Key measures include a tax holiday until 2047 for foreign companies providing global cloud services using Indian data centres, a 15% safe harbour margin on cost for related-party data centre services, and a 2% profit safe harbour for non-residents using bonded warehouses for component storage. For the IT sector, software development, IT-enabled services, KPO services, and certain contract R&D services will be grouped under a single Information Technology Services category with a 15.5% safe harbour margin. The turnover threshold for using the safe harbour will increase from INR 3 billion to INR 20 billion, and approved safe harbour treatment may continue for five years at a time. The Government also plans to complete unilateral APA applications for IT services firms within two years.
Other measures include a new five-year income tax exemption for certain non-residents supplying capital goods or tools to toll manufacturers in bonded zones, an exemption for non-India sourced income of non-resident experts for up to five years, and relief from Minimum Alternate Tax for non-residents taxed on a presumptive basis. The Budget also changes the tax treatment of share buybacks, which will be taxed as capital gains for all shareholder types, with additional buyback tax applying to promoters. Further changes include customs duty relief for nuclear power project imports until 2035, a reduction in the tariff rate on dutiable personal imports from 20% to 10%, and amendments to TCS rules, tax penalties, and a new six-month tax amnesty scheme for certain undeclared foreign assets.
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JAPAN
Disability Employment Quota Increase
Under the Act to Facilitate the Employment of Persons with Disabilities, the statutory quota for employing persons with disabilities will rise from 2.5% to 2.7%. This expands the hiring obligation to employers with 37.5 or more employees (previously 40 or more).
Employers subject to the quota must continue to submit an annual Disability Employment Status Report by 15 July each year. Non-submission may incur a criminal fine of up to JPY 300,000. Employers with more than 100 employees who fail to meet the quota will remain liable for a “disability employment levy.”
Enhanced Whistleblower Protections
Effective 1 December 2026, amendments to the Whistleblower Protection Act will strengthen protections for whistleblowers in several respects. The changes will extend legal protection to freelancers, prohibit attempts to identify a whistleblower or discourage a report from being made, and introduce a presumption in civil proceedings that any dismissal or disciplinary action taken within one year of a report is retaliatory.
Promotion of Women’s Participation in the Workplace
Effective 1 April 2026, Japan will expand employers’ disclosure obligations under the Act on the Promotion of Women’s Active Engagement in Professional Life. The revised rules increase the amount of information that employers must publish regarding the employment of women, including gender pay gap data and the representation of women in managerial positions.
From that date, employers with 301 or more employees must publish: (1) the wage gap between men and women, (2) the ratio of women among managerial staff, and two additional categories of information from the statutory list. Employers with 101 or more employees must publish: (1) the wage gap between men and women, (2) the ratio of women among managerial staff, and one additional category from the list.
The other disclosure categories relate to the employer’s track record in providing career-related opportunities to women and in creating a work environment that supports the balance between work and family life. Employers that fail to comply may be subject to administrative guidance, and continued non-compliance may result in stronger measures, including public disclosure by the labour authorities.
Employment Insurance Contribution Rates to be Lowered
There has been an official announcement that employment insurance contribution rates will be lowered starting in April 2026.
| Employee | Employer | |
| Other Industries | 0.5% | 0.85% |
| Agriculture, Sake Production | 0.6% | 0.95% |
| Construction | 0.6% | 1.05% |
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MAINLAND CHINA
China Introduces Import Tax Incentives for Research and Education Institutes
Effective 1 January 2026, China has introduced import tax incentives for eligible research and education institutions under Finance and Customs Duty Document No. 7 of 2026. The measures will remain in force until 31 December 2030.
Under the new policy, import duties, import value-added tax, and consumption tax will be waived for qualifying imports that cannot be sourced domestically. Eligible institutions include scientific research institutions, technology development institutions, schools, administrative colleges, and libraries. Covered imports include materials and equipment for scientific research, technological development, teaching supplies, and books or similar materials.
The incentives form part of China’s 15th Five-Year Plan and provide tax support for approved imports used by the eligible institutions during the 2026–2030 period.
Updates to Work-Related Injury Insurance Benefits
Guangdong Province:
Guangdong Province has issued a notice announcing adjustments to the 2025 work-related injury insurance benefits. Effective 1 January 2025, the revised benefits apply to those receiving disability allowances, living care expenses, survivor’s pensions, and disability subsidies before 31 December 2024, as well as those who continue to receive such benefits after 1 January 2025. The specific adjustment plan is as follows:
- Disability Allowance Adjustment Standards:
- Disability Grade 1 increased by RMB45 per month
- Disability Grade 2 increased by RMB40 per month
- Disability Grade 3 increased by RMB35 per month
- Disability Grade 4 increased by RMB30 per month
After the adjustment, the monthly disability allowance will be topped up to RMB 5,155 where it would otherwise fall below this amount. For employees newly assessed as having a Grade 1 to 4 work-related injury between 1 January and 31 December 2025, where the calculated monthly disability allowance is below RMB 5,155, the allowance will be paid at RMB 5,155 from the month the benefit is first granted.
- Living Care Allowances: The living care allowance is adjusted based on the assessed level of self-care impairment, as follows:
- Level 1 care: 60% of the calculation base
- Level 2 care: 50% of the calculation base
- Level 3 care: 40% of the calculation base
- Level 4 care: 30% of the calculation base
Special circumstances: Where the adjusted standard would result in a benefit lower than the employee’s current entitlement, the adjustment will not be applied temporarily. Instead, the original allowance will remain in place, with the following monthly increments added:
- Level 1 to receive an additional RMB60 per month
- Level 2 to receive an additional RMB55 per month
- Level 3 to receive an additional RMB50 per month
- Level 4 to receive an additional RMB45 per month
Where the general adjustment standard is higher than the special adjustment standard set out above, the individual will be included under the general adjustment, and the allowance will be paid in accordance with the unified standard.
- Survivor Pensions For Dependent Relatives:
- Each dependent will receive an additional RMB10 per month
- Spouse, elderly living alone or orphans will receive an additional RMB20 per month
- Where the spouse is also an elderly person living alone, he/she will receive an additional RMB30 per month
If, after applying the above adjustments, the survivor pension remains below the local minimum living standard for urban residents in 2025 (where multiple standards apply, the highest standard will be used, the same below), the pension will be topped up to that level from January 2025.
For survivor pensions first determined between 1 January and 31 December 2025, where the determined amount is below the applicable local minimum living standard, it will be topped up to that level from the month the benefit is first paid.
- Other Adjustments:
- For workers with Grade 5 and 6 work-related injuries, adjustments to their disability allowances may be made in accordance with the relevant provisions of this notice. Specifically:
- Grade 5: The monthly disability allowance increase shall be no less than RMB 25.
- Grade 6: The monthly disability allowance increase shall be no less than RMB 20.
- For workers with Grade 1 to 4 work-related injuries who have retired in accordance with Article 35 of the Regulations on Work-Related Injury Insurance and are receiving basic pension insurance benefits, if the pension amount is lower than the applicable disability allowance standard, the work-related injury insurance fund will cover the shortfall. The 2025 compensation amount shall be calculated as the difference between the adjusted disability allowance standard and the adjusted basic pension insurance benefit standard for the same period.
China Issues New VAT Registration and Administration Rules
Effective 1 January 2026, China has introduced new VAT registration rules following the entry into force of the new VAT regulations. The new notice sets out how taxpayers should register under either the general VAT regime or the simplified regime for small-scale taxpayers, and includes deadlines, record-keeping requirements, and rules for small-scale taxpayers whose turnover exceeds the statutory threshold.
The rules also provide updated definitions for VAT purposes, including “goods”, “services”, “intangible assets”, and “real estate”, and introduce tighter controls on VAT deductions. In addition, the reforms reflect changes to the allocation of VAT revenue, moving to a destination-based approach.
The notice replaces the 2018 announcement on VAT registration and management for general taxpayers and the 2010 notice on administrative measures for VAT guidance periods.
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MALAYSIA
Malaysia Revises Employment Pass Salary Policy
Malaysia’s Ministry of Home Affairs has announced revisions to the Employment Pass (EP) salary policy, which will take effect from 1 June 2026. Under the revised policy, minimum monthly salary thresholds and employment duration limits for EP categories will change as follows:
- EP Category I will require a minimum salary of RM 20,000 and above;
- EP Category II will require RM 10,000‒RM 19,999; and,
- EP Category III will require RM 5,000‒RM 9,999 (any sectors) and RM7,000-RM9,999 (Manufacturing related sector).
Maximum employment durations will also be introduced for each category and succession plan requirements will apply to certain categories. All new and renewal EP applications submitted on or after 1 June 2026 must meet the updated criteria.
Malaysia Enhances EPF Schemes and Retirement Savings Framework
Effective 1 January 2026, Malaysia introduced several updates to Employees Provident Fund (EPF) policies. These include enhanced incentives under the i-Saraan Plus scheme, with government matching of up to RM600 per year for gig workers, and an extension of i-Suri eligibility for housewives up to age 60. The haj withdrawal limit has also been increased to RM10,000, with a simplified application process.
A new Retirement Income Adequacy framework has also been introduced, setting savings benchmarks at RM390,000 for basic needs, RM650,000 for adequate retirement, and RM1.3 million for enhanced retirement security. In addition, EPF has tightened withdrawal and investment eligibility rules and renamed its voluntary contribution options as i-Simpan and i-Topup.
Introduction of LINDUNG 24 Jam
Effective June 2026, LINDUNG 24 Jam is introduced to provide round-the-clock protection for eligible employees throughout their employment period, including coverage for accidents that occur outside working hours and are not directly related to their job or duties.
Benefits:
- Comprehensive protection for accidents not related to employment
- 24-hour coverage for employees
- Cost of medical treatment financed by PERKESO
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SAUDI ARABIA
Saudi Arabia Increases Saudization Requirements for Marketing Professions
Saudi Arabia announced an increase in the Saudization rate for marketing professions in the private sector to 60%. The measure applies to establishments employing three or more workers in marketing roles, and the minimum monthly wage for Saudization purposes is SAR 5,500.
The ministry’s announcement states that the decision took effect on 19 January 2026.
Saudi Arabia Amends Labour Law Penalties Schedule
On 11 March 2026, Saudi Arabia announced amendments to the schedule of violations and penalties under the Labor Law.
The revised framework classifies establishments by size for penalty purposes, with Category A covering establishments with 50 or more workers, Category B covering establishments with 21 to 49 workers, and Category C covering establishments with 20 or fewer workers.
Our Middle East team can help your business further streamline HR operations.
SINGAPORE
Singapore to Raise Retirement and Re-Employment Age
Effective 1 July 2026, Singapore will increase its retirement age from 63 to 64 years and its re-employment age from 68 to 69 years. This forms part of the phased implementation under the Retirement and Re-employment Act, which will raise the retirement age to 65 years and the re-employment age to 70 years by 2030.
To support implementation, the government will extend the Senior Employment Credit and the Part-Time Re-employment Grant until end-2027. In addition, CPF contribution rates for older workers will be increased from 2027, with transitional support provided to employers.
Singapore Budget 2026 Outlines Key HR and Employment Measures
Singapore’s Budget 2026, delivered on 12 February 2026, includes a range of workforce and employment measures focused on skills development, retirement adequacy, labour cost support, and foreign manpower policy. Key employment-related measures include the redesign of the SkillsFuture website to introduce AI learning pathways, enhancements to retirement adequacy, and confirmation that CPF contribution rate increases for senior workers will proceed from 2027.
The Budget also signals changes to foreign manpower rules, including a higher minimum qualifying salary for new Employment Pass and S Pass holders and adjustments to the levy framework, including merged levy tiers. For lower-wage workers, the Government will raise the Local Qualifying Salary and further enhance the Progressive Wage Credit Scheme, including an increase to the minimum qualifying wage.
Additional support was announced for mid-career and senior workers, including enhanced Workfare Skills Support, continued course subsidies and training allowances under the SkillsFuture Level-Up Programme, and an extension of the Senior Employment Credit. The Government will also provide an additional SGD 400 million to the Long-Term Care Support Fund.
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SOUTH KOREA
South Korea Increases Corporate Income Tax Rates
The South Korean Cabinet approved a bill to raise corporate income tax rates by 1 percentage point across all brackets starting 2026, as part of an expansionary fiscal policy.
The top tax rate will increase to 25% for companies earning over 300 billion won, reversing a tax cut introduced in 2022.
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TAIWAN
Taiwan Clarifies VAT Reporting Rules for Online Content Creators
Taiwan’s National Taxation Bureau has highlighted new VAT reporting requirements for influencers and social media content producers applying the zero rate of business tax on services supplied overseas. Taxpayers claiming the zero rate must prepare and retain supporting documentation showing that the relevant income was derived from overseas sources. Where income is received from both domestic and overseas sources, the revenue must be seperately documented.
The tax authority has indicated that it will step up compliance reviews of taxpayers earning income from online content who have not remitted VAT on domestic supplies. Underreported tax arising from non-compliance will not be penalised until 30 June 2026. After that date, penalties may apply, and the first returns from affected taxpayers must be filed by 15 July 2026.
Working Parents To Get a One-Hour Daily Worktime Reduction
Enterprises participating in the program that allow employees with children under 12 years to reduce one working hour per day for childcare purposes will be eligible for subsidies.
The city government will subsidise 80% of the wages for the reduced hour, up to NT$100,000 per enterprise. Eligible Taipei-based employers may apply starting March 1 if they implement a one-hour daily worktime reduction (arriving later or leaving earlier) without reducing pay for employees whose household registration is in Taipei City and who personally care for and pick up their children.
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THAILAND
Thailand Extends Deadline for Migrant Worker Permit Renewals
Thailand has extended the deadline for workers from Laos, Myanmar and Vietnam to complete work permit renewal procedures from 24 February 2026 to 31 March 2026.
The extension applies to affected migrant workers who need to renew their work permits to remain legally employed in Thailand. Employers should ensure the renewal procedures are completed by the extended deadline to avoid affected workers falling outside the legal employment system.
Want to learn more about the Thailand labour law scene? Contact our team now!
UNITED ARAB EMIRATES
UAE Issues Electronic Invoicing Guidelines
On 23 February 2026, the Ministry of Finance issued the UAE Electronic Invoicing Guidelines. The guidance states that electronic invoicing will commence with a pilot programme from 1 July 2026 and confirms that eInvoicing is generally mandatory for persons conducting business in the UAE unless specifically excluded.
It also confirms that unstructured formats such as PDF, Word documents, scanned copies, images and emails do not qualify as eInvoices.
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If you have any questions with regards to the content in our Labour Law Insider or Links International’s HR Outsourcing services, please contact Bella Khan at bella.khan@linksinternational.com or Lynette Liew at lynette.liew@linksinternational.com.
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