Links Onboard – Latest APAC Tax, Payroll & Labour Law Updates
Below is the latest issue of Onboard, a quarterly update by Links. Our legislation update covers major tax, labour law, payroll and visa developments across Asia. It is designed to get you updated at-a-glance.
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- Hong Kong
- Compulsory 14-day Quarantine for Hong Kong Residents Arriving from Overseas Beginning 25 March 2020
- HK $137.5 Billion Economic Relief Package to Counter COVID-19 Impact
- Banned Entrance for Residents of The Mainland China, The Hong Kong SAR and The Region of Taiwan Who Have Been to Areas Outside of China in the Past 14 Days
- The Labour Dispute Act (LDA) Became Effective on 1 January 2020
- Taipei COVID-19 Economic Counter Measures
- Tax Payment Extension Due to COVID-19
- Deferred Labour Insurance & Labour Pension for 6 Months
- Entry approval and Stay-Home Notice Requirements for All New and Existing Work Pass Holders
- Mandatory Reporting to MOM on Cost-Saving Measures Affecting Salaries
- Employment Pass Qualifying Salary to be Increased $3,900 per Month
- Wage Credit Scheme Will be Credited by End of March 2020
- Job Support Scheme
- MOM Recommends Employers Not to Apply Work Passes for Foreigners
- New Minimum Wage Rates Take Effect 1 February 2020
- EPF Statutory Contribution Rates Lowered from 11% to 7%
- Government to Allow Contributors to Dip into EPF During COVID-19 Crisis
- Reduction in Social Security Contributions
- Relief Measures to Counter COVID-19 Impact
- Suspension of Mandatory Contributions for Enterprises
- Entry and Exit Policies for Foreigners Over COVID-19
- Basic Salary Hikes for Public Employees
- Government Announces 4 Additional Public Holidays for 2020
- Income Tax Breaks for Manufacturing Sector
- Coronavirus (COVID-19) Travel Restrictions: Entry Ban for Foreigners Coming from Select Regions
- Economic Stimulus Package to Counter COVID-19
- South Korea
- Rescue Package for Small and Medium-Sized Businesses
- Suspended Visa Waivers for Citizens of countries who have Imposed travel Ban on South Korea
- Changes to Annualised Salaries Under Modern Awards
- Payroll Tax Relief Measures in Response to COVID-19
- JobKeeper Payment Subsidy
- New Zealand
- COVID-19 Wage Subsidy Scheme
- Minimum Wage Raised to $18.90 Per Hour
Compulsory 14-day Quarantine for Hong Kong Residents Arriving from Overseas Beginning 25 March 2020
Starting midnight on 25 March 2020, all Hong Kong SAR residents arriving from Mainland China, Taiwan, Macao SAR, overseas countries and territories, are subject to a compulsory 14-day quarantine. Non-Hong Kong residents will be denied entry into Hong Kong. All individuals that are eligible to enter Hong Kong will need to undergo 14-day home/hotel quarantine.
Residents entering from:
- China: Hubei
- Italy: Emilia-Romagna, Lombardy and Veneto regions
- South Korea: Daegu and Gyeongsangbuk-do
Are required to undergo 14 days of compulsory quarantine at a government nominated quarantine facility.
HK $137.5 Billion Economic Relief Package to Counter COVID-19 Impact
A $137.5 Billion financial relief package has been unveiled to counter against the economic impacts of COVID-19. The package covers a wide variety of measures, including:
- Government to pay 1.5 million employees 50 per cent of their wages through their employers, capped at HK$9000 for 6 months
- 20 Percent lower MTR fares for 6 months
- 6 Month Government rental concessions from 50 percent to 75 percent
- Government to create 30,000 jobs
Banned Entrance for Residents of The Mainland China, The Hong Kong SAR and The Region of Taiwan Who Have Been to Areas Outside of China in the Past 14 Days
Starting from March 25, residents of Mainland China, Hong Kong SAR and the region of Taiwan who has travelled to areas outside of China in the past 14 days are banned from entering Macau SAR
Starting from March 19, holders of non-resident worker’s identification cards will be banned from entering Macau SAR except for those who have resident status in Mainland China, the Hong Kong SAR and the region of Taiwan.
The Labour Dispute Act (LDA) Became Effective on 1 January 2020
The labour Dispute Act (LDA) became effective on 1 January 2020, which aims to resolve disputes between employers and employees more effectively. The act also aims to better protect worker’s rights in Taiwan’s judicial system. Under the LDA the employee will be able to initiate litigation in the city where they work, while employers are now also required to provide the documented evidence. Additional key features include:
- Requirement of courts to establish labour division for the handling of labour-related disputes
- Mandatory Mediation committee consisting of one judge and two mediators
- Expedited legal proceedings
- Expanded applicability
Taipei COVID-19 Economic Counter Measures
The Mayor of Taipei announced short-term economic counter measures to battle against the impact of the COVID-19 coronavirus pandemic. Measures range from tax breaks and lowering rents to help local businesses affected. Some key measures include:
- Up to one-year tax payment deadline postponement for businesses with a 15% monthly revenue drop from the same period of last year
- 50% Cut on monthly rent for tenants of city government-owned properties from March to May
- 15% Water bills discount for local business operators
- 50% Water bills discount for hospitals and “quarantine hotels”
- Preferential interest rate loans for those in need if they apply from Taipei Fubon Bank
Tax Payment Extension Due to COVID-19
Taiwan’s Ministry of Finance announced that individuals and companies affected by the COVID-19 pandemic can apply for a tax payment extension. Those who cannot afford to pay their taxes in 2020 are eligible to apply for extension of up to a year, or to spread payments in 36 instalments over the course of up to 3 years.
Deferred Labour Insurance & Labour Pension for 6 Months
For a period of 6 months the insured unit and professional worker may apply to the Bureau of Labor Insurance for delayed labour insurance and labour pension payments.
Entry approval and Stay-Home Notice Requirements for All New and Existing Work Pass Holders
Entry into Singapore for new and existing work pass holders will be required to obtain approval from The Ministry of Manpower. Upon entering Singapore, work pass holders will be required to be placed on a mandatory 14-day Stay-Home Notice (SHN).
Mandatory Reporting to MOM on Cost-Saving Measures Affecting Salaries
Employers must notify the Ministry of Manpower (MOM) if they are implementing any cost-saving measures that affect employees’ salaries.
- Implement cost-saving measures which result in local employees’ gross monthly salary falling below 75% or, foreign employees’ basic monthly salary falling below 75%
- Are registered in Singapore, and
- Have at least 10 employees
Are required to notify MOM online within 1 week of cost-saving measure being implemented during the period from 7 April to 4 May 2020.
Employment Pass Qualifying Salary to be Increased $3,900 per Month
Starting from 1 May 2020, foreign professionals will require a minimum monthly salary of $3900 SGD to qualify for an Employment Pass. This will be an increase from the previous $3600 required. The salary criteria for older and more experienced candidates, which requires higher salaries to qualify, will also be raised in tandem.
Renewal applications will follow the new salary criteria from 1 May 2021.
Wage Credit Scheme Will be Credited by End of March 2020
Employers under the Wage Credit Scheme (WCS) will receive wage credit payouts by 31 March 2020.
Job Support Scheme
Businesses will receive up to 75% wage subsidies for each local employee. For a period of 9 months (Starting April 2020) the government will co-fund up to 75% of the first $4600 of gross monthly wages.
MOM Recommends Employers Not to Apply Work Passes for Foreigners
The Ministry of Manpower strongly urges employers to defer from bringing foreigners into Singapore during this period. Approvals for new applications will be limited.
New Minimum Wage Rates to Take Effect
The Minimum Wages Order 2020 comes into effect on 1 February 2020. The minimum wage payable to an employee who works within the 16 city councils and 40 municipal councils, will be RM1200 monthly or RM5.77 an hour.
Minimum wage payable to employees who work outside the listed locations will be RM1100 monthly or RM5.29 an hour.
EPF Statutory Contribution Rates Lowered from 11% to 7%
From April 2020 to December 2020, employee contribution rate towards their Employees Provident Fund (EPF) will be lowered by 4% (from 11% to 7%).
Government to Allow Contributors to Dip into EPF During COVID-19 Crisis
EPF contributors below the age of 55 will be able to withdraw a maximum of RM500 a month from account 2 for a maximum of 12 months, starting 1 April 2020.
Reduction in Social Security Contributions
Starting from the end of March till the end of May, social security contributions for employers will be reduced from 5% to 4%, while employee contribution will be reduced from 5% to 1%.
Relief Measures to Counter COVID-19 Impact
Various tax relief counter measures implemented to counter the COVID-19 pandemic impact. Including:
- Income tax filing extensions
- VAT refunds
- Low-interest loans
Suspension of Mandatory Contributions for Enterprises
Enterprises experiencing difficulties due to COVID-19 pandemic are eligible to suspend contributions to retirement and survivorship funds until the end of June 2020.
The Vietnam General Confederation of Labor (VGCL) will allow for the delay of payment of trade union fees for the first six months of 2020.
Entry and Exit Policies for Foreigners Over COVID-19
Effective from March 22 entry into Vietnam for all foreigners will be temporarily suspended. Those entering who are experts, business managers, highly skilled workers or on diplomatic purposes are subject to mandatory medical declaration and/or quarantine.
Basic Salary Hikes for Public Employees
Effective from 1 July 2020 the basic salary for civil servants, public employees and those working in the armed forces will be increased from VNĐ1.49 million to VNĐ1.6 million. This in turn will increase the monthly cap base for Social Insurance (SI), Health Insurance (HI) and Trade Union (TU) contributions from VNĐ29.8 million to VNĐ32 million.
Government Announces 4 Additional Public Holidays for 2020
4 Additional public holidays have been announced for 2020, taking the total to 24 days of national holiday.
- Eid al-Fitr: May 28th and May 29th
- Islamic New Year: August 21st
- Birthday of the Prophet Muhammad: October 30th
Income Tax Breaks for Manufacturing Sector
For a period of 6 months the manufacturing sector will receive various fiscal incentives in the form of tax breaks. These include:
- 30% Reduction of corporate income tax (Selected 19 manufacturing industries)
- Income tax exemption for manufacturing sector workers with an annual income below 200 million rupiah
- Relaxed VAT refunds
- Deferral of import tax payments
Coronavirus (COVID-19) Travel Restrictions: Entry Ban for Foreigners Coming from Select Regions
Foreigners who have visited select countries within the last 14 days will be banned from entry into Japan. Japanese citizens who have visited the countries will also be subject to PCR tests.
Economic Stimulus Package to Counter COVID-19
The Japanese Government has announced a ¥108 trillion stimulus package to help businesses and households affected by the coronavirus pandemic. Small and medium sized businesses will receive up to ¥2 million while sole proprietors will get up to ¥1 million. Low-income households will be distributed ¥300,000.
Rescue Package for Small and Medium Sized Businesses
A KRW100 Trillion economic rescue package to save companies affected by the COVID-19 pandemic. The aid includes providing loans at interest rates of around 1.5% for businesses and buying corporate bonds.
Suspended Visa Waivers for Citizens of countries who have Imposed travel Ban on South Korea
Countries that have imposed travel bans on South Korea will have their visa waivers temporarily suspended for their citizens.
Changes to Annualised Salaries Under Modern Awards
The Fair Work Committee (FWC) have made changes to annualised salary provisions under modern awards. From 1 March 2020 onwards extra records will be required for employees that are paid an annual salary under an award provision. This includes:
- Employees must be paid for any extra hours worked that exceed “outer limits” as stated in the annual salary agreement
- Record employee’s start, finish and break times
- Employees signing records acknowledging these times with each pay cycle
Payroll Tax Relief Measures in Response to COVID-19
In response to the COVID-19 pandemic, businesses with total grouped Australian wages over $10 million will have to the option of deferring payroll tax for up to six months.
Businesses whose total grouped Australian wages that do not exceed $10 million will have their annual tax liability reduced by 25%.
JobKeeper Payment Subsidy
The government has announced a JobKeeper payment initiative to support businesses and keep people in jobs. A fortnightly payment to workers through their employer starting from 30 March 2020, will help businesses significantly impacted by COVID-19 to cover employee wages.
COVID-19 Wage Subsidy Scheme
Eligible businesses can apply for wage subsidies in order to cover employee wages. The scheme is available for all businesses that have been adversely affected by COVID-19. Eligibility requirements include:
- Businesses which have had 30% revenue drop due to COVID-19
- Will retain employees for at least the duration of the grant
Minimum Wage Raised to $18.90 Per Hour
Starting from 1 April 2020 adult minimum wage will be increased from $17.70 to $18.90. Starting-out and training minimum wage rates will also be increased from $14.16 to $15.12.
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