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.
- Hong Kong
- Tightened Discharge Criteria for Confirmed COVID-19 Patients
- Health Code System Open for Registration
- Launch of e-Visa
- Civil Servants to Require COVID-19 Vaccination Proof
- Progressive Increase of Statutory Holidays from 2022
- Application for the Fifth Round of the Anti-Epidemic Fund
- Extension of Macao Tax Department Online Service
- Mainland China
- Extension of Preferential Individual Income Tax Policies for Expatriates
- Extension of Preferential Individual Income Tax Policies for Annual One-off Bonus
- Shanghai and Beijing Increase Maternity Leave by 30 Days
- Extended Tax Cuts for Enterprises in COVID-19 Affected Sectors
- Increased Minimum Wage in 2022
- Wage Subsidies for Businesses Suffering Revenue Drops
- Changes to Tax Exemption in 2022
- Changes to the Withholding Tax Table in 2022
- Strict Policies for Unvaccinated Employees Returning to Workplace
- Extension of Levy Rebates and Waivers for Businesses
- Ceased Entry of Construction, Marine Shipyard and Process Workers and Other Dormitory Bound Workers via Vaccinated Travel Lanes
- COVID-19 Recovery Grant Extended Till 31 December 2022
- Retirement and Re-Employment Age Set to be Raised
- COVID-19 Vaccination to Be a Condition for Long-Term Passes, Work Passes and Permanent Residence From 1 February 2022
- Tax Exemption on Foreign Source Income (FSI) for Resident Taxpayers
- Proposed Amendments to the Employment Act 1955
- Anti-Sexual Harassment Bill Tabled
- Launch of Three New HR Initiatives
- JaminKerja Hiring Incentive
- Upskilling and Reskilling Programmes
- Tax Incentives for Electric Vehicles
- Second Phase of Job Retention Programme for SMEs Launched for December 2021 – January 2022
- Soft-Loan Package to Create Jobs
- Updates to Social Insurance Contributions for Foreign Employees
- New Guidance for PIT and VAT Management for Businesses and Individuals
- Adjustment to Pensions, Social Insurance Benefits and Monthly Benefits
- Ho Chi Minh City Workers Receive Support from Unemployment Insurance Fund
- The Harmonization of Tax Regulations (HPP) Law
- Minimum Wage for Jakarta Increases for 2022
- Foreigners Can Enter on Certain Conditions
- Investment Projects to Create More Jobs
- Government Plans Additional $250 Million Support for SMEs
- Monthly Minimum Wage for Textile, Garment and Footwear Workers Raised
- Creation of Department for Migrant Workers Set to Be Created
- DO No 228: Expanded Compulsory Insurance Coverage for Rehires & Direct Hires
- DO No 230: Guidelines on Support for workers in the Informal Economy
- Labor Advisory no 20: OSH Personnel in Stand- Alone Micro Health Care & Related Facilities
- South Korea
- New Procedure and Remedies for Gender-Discrimination and Sexual-Harassment Claims
- Government Support for Employers Allowing Parental Leave, Effective January 2022
- Pregnant Workers Have Right to Request Working-Hours Adjustment and Use of Childcare Leave During Pregnancy
- New Penalties for Inadequate Handling of Workplace Harassment
- New Chemicals Substances Named Hazardous to Workers
- Employment Incentives for Disabled in 2022
- Job Stabilization Fund Extends till May 2022
- Minimum Wage to Increase in 2022
- Domestic Workers Bill to be Enforced Later in 2022
- Amendment to the Child and Family Care Act
- Expansion of Companies to Requirements Under the Act on the Promotion of Female Participation and Career Advancement in the Workplace (APFPCA)
- Record US$490 Billion Stimulus Package Unveiled
- Amendment to Payment Period for Injury and Sickness Allowance in Health Insurance Act
- Stop Sexual Harassment Orders in the Fair Work Commission
- Industrial Relations Legislation Amendment Bill 2021 Passed
- Unpaid Pandemic Leave and Annual Leave Changes to Awards
- Employer Tax and Super Obligations for COVID Vaccination Rewards Given to Staff
- Employers Must Continue to Withhold 15% Tax from Each Working Holiday Maker Employed
- Single Touch Payroll (STP) Phase 2 Reporting Commences 1 January 2022
- STP Deferral up to March 2022
- New Zealand
- One-Off Transition Payment for Move into the Traffic Light System
- Government Announces COVID-19 Workplace Vaccination Legislation
Tightened Discharge Criteria for Confirmed COVID-19 Patients
Effective from 27 October 2021, Hong Kong tightened the discharge criteria for confirmed COVID-19 patients. To prevent the spread of the virus, patients who have recovered will be subject to a further 14-day period of isolation and monitoring in a government facility.
Health Code System Open for Registration
To further support businesses in the pandemic, Hong Kong will extend the Pre-approved Principal Payment Holiday Scheme for another 6 months till the end of April 2022. This scheme is aimed at supporting SMEs in HK and has so far granted a total of HK$170 billion in loans, benefitting 67,000 applicants.
Launch of e-Visa
The Immigration Department has introduced an electronic service for visa application and implemented the “e-Visa” arrangement on the 28th December 2021. With this arrangement, applicants can complete the visa application process entirely online without visiting an immigration office.
Civil Servants to Require COVID-19 Vaccination Proof
Government employees will be required to provide COVID-19 vaccination proof to enter official premises from February. Those who have not been vaccinated will be required to pay for a test every 3 days.
Progressive increase of statutory holidays from 2022
Statutory holidays under the Employment Ordinance will be increased progressively from 2022 to 2030 in accordance with the Employment (Amendment) Ordinance 2021. The newly added statutory holiday from this year onwards is the Birthday of the Buddha.
Application for the Fifth Round of the Anti-Epidemic Fund
A fifth round of the anti-epidemic fund, totalling around HK$3.57 billion, will be available for enterprises directly affected by the tightening of social distancing measures.
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Extension of Macao Tax Department Online Service
On 4th January, two new functions have been launched on the e-Services of the Financial Services Bureau.
- The entity administrators of the company that have registered an entity account of One Account can now use the Administrative and Public Service Bureau on the basis of setting up the list of staff accounts. Different tax inspection and declaration authority for the staff on the list is also available.
- When signing and submitting the electronic tax form the user can now use their current mobile phone verification code, set their own personal password, and submit the form by entering the password.
Extension of Preferential Individual Income Tax Policies for Expatriates
To reduce the burden of personal tax income, the State Council has decided to extend preferential individual income tax (IIT) policies for foreigners until the end of 2023. Foreigners living in China holding work visas enjoy a reduction in their IIT for fees going towards categories like Housing Rental, School Fees for Children, Language Training, and Business Travel.
These tax benefits were due to expire at the end of 2021. However, tax-exempt benefits have now been extended till 31 December 2023.
Extension of Preferential Individual Income Tax Policies for Annual One-off Bonus
The annual one-off bonus will not be incorporated into the salary income of the current month, and the implementation of the policy of separate monthly taxation will be extended to the end of 2023.
For more details on the extension: https://www.linksinternational.com.cn/view/details/1858
Shanghai and Beijing Increase Maternity Leave by 30 Days
Female employees’ entitlement to extend maternity leave will be increased from 30 to 60 days. Maternity leave is increased to 158 calendar days for both cities for births on or after 26 November 2021 in Beijing and 25 November 2021 in Shanghai.
Extended Tax Cuts for Enterprises in COVID-19 Affected Sectors
The Chinese premier has announced that China will extend the tax and fee cut measures that expired at the end of 2021 to continue supporting small enterprises and individually-owned businesses.
Measures include improving the enhanced tax deduction policy for R&D expenses, increase VAT refunds for excess input VAT credits, promote technological innovation in manufacturing enterprises.
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Increased Minimum Wage in 2022
The monthly minimum wage has increased to NT$25,250 starting from January 1, 2022. Hourly minimum wage increased from NT$160 to NT$168.
Wage Subsidies for Businesses Suffering Revenue Drops
Companies that saw revenue declines of at least 20% in September and October 2021 will be eligible to receive wage subsidies of NT$1,000 per month for each full-time employee and NT$560 for each part-time for a period of 6 months.
Changes to Tax Exemption in 2022
Individual income tax exemptions, standard tax deductions and special deductions thresholds were raised in 2022. Changes include personal tax exemption being raised to NT$92,000.
For more details visit the government website.
Changes to the Withholding Tax Table in 2022
The start point of the withholding tax table changed from 84,501 TO TWD86,001.
Refer to the withholding tax table here.
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Strict Policies for Unvaccinated Employees Returning to Workplace
From January 1st 2022, only fully vaccinated can return to workplaces. Unvaccinated employees can only return under strict circumstances:
- They are medically ineligible for mRNA COVID-19 vaccines.
- For those who are eligible but refuse to get the shots, they must test negative at a Ministry of Health (MOH)-approved test provider.
- The test must be done in advance and be valid for the duration of their time on site.
Extension of Levy Rebates and Waivers for Businesses
The SG$250 Foreign Worker Levy (FWL) rebate for Work Permit Holders in the Construction, Marine Shipyard and Process (CMP) sectors will be extended. The waiver of FWL for all foreign workers, including migrant domestic workers, will also be extended during their entry Stay-Home Notice and residential onboarding programme at the Migrant Worker Onboarding Centres.
Ceased Entry of Construction, Marine Shipyard and Process Workers and Other Dormitory Bound Workers via Vaccinated Travel Lanes
Employers of Construction, Marine Shipyard and Process (CMP) S Pass and work permit holders and other dormitory-bound work pass holders will not be allowed to make new applications to enter Singapore via Vaccinated Travel Lanes.
COVID-19 Recovery Grant Extended Till 31 December 2022
Application for the COVID-19 Recovery Grant will be extended until 31 December 2022 to provide continued support for workers financially impacted by the pandemic. Eligible applicants can receive up to 3 tranches of support from the grant.
Retirement and Re-Employment Age Set to be Raised
The retirement age is expected to be raised to 63 and the re-employment age to 68 in July. Progressive increase of the retirement age and re-employment age to 65 and 70 years old respectively is expected by 2030.
COVID-19 Vaccination to Be a Condition for Long-Term Passes, Work Passes and Permanent Residence From 1 February 2022
From 1 February 2022, COVID-19 vaccinations will be a condition for the approval of new long-term passes, work passes, as well as permanent residence. Renewal of existing work passes will also require vaccination.
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Tax Exemption on Foreign Source Income (FSI) for Resident Taxpayers
From 1st January 2022 to 31st December 2026, income tax exemption on dividends will be given to companies while individuals will be tax-exempted for all types of income.
Proposed Amendments to the Employment Act 1955
Amendments to the Employment Act 1955 were tabled in Parliament. Key amendments proposed include:
- Flexible Working Arrangements
- Reduction of Normal Working Hours
- Maternity and Paternity Leave Changes
- Anti-Harassment Measures
- Forced Labour
- Foreign Worker Employment
Anti-Sexual Harassment Bill Tabled
The Anti-Sexual Harassment Act 2021 has been tabled in parliament and once passed, the act will clearly define “sexual harassment” and provide for the establishment of a “Tribunal for Anti-Sexual Harassment”.
Launch of Three New HR Initiatives
The government has launched the HR Ministry’s three initiatives to develop sustainable human capital. Initiatives include:
- MyFutureJobs Satellite Centre
- Use of a tracker developed by the Department of Manpower (JTM) training institutions
- The International Human Resource Transformation Summit (HRTS)
JaminKerja Hiring Incentive
Under Malaysia’s Budget 2022, around RM4.8 billion will be allocated to the JaminKerja hiring initiative to create 600,000 jobs. The initiative covers incentives for hiring job seekers, women, vulnerable groups, key sector employees.
Upskilling and Reskilling Programmes
Programmes providing skills training to help job seekers increase employability are also introduced in Malaysia’s Budget 2022. Programmes include:
- HRD Corp
- Koridor Wilayah – IRDA, ECER, RECODA
- MDEC GLOW
Tax Incentives for Electric Vehicles
To cut down carbon footprint, tax incentives will be given to EV ownership to encourage greater adoption.
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Second Phase of Job Retention Programme for SMEs Launched for December 2021 – January 2022
SMEs can apply for the second phase of the Job Retention Programme, where they would be provided with a monthly subsidy of 3000 baht per employee from December 2021 to January 2022.
Soft-Loan Package to Create Jobs
A 5-billion-baht soft loan package for SMEs to help them with financial liquidity and hiring has been approved.
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Updates to Social Insurance Contributions for Foreign Employees
Social insurance rates for foreign workers in Vietnam increases from 1 January 2022. Total SI contribution will be 17% for the first half of 2022 and increase to 17.5% from 1 July 2022 (The total SI contribution rate was set at 3.5% before 2022).
New Guidance for PIT and VAT Management for Businesses and Individuals
Circular 100/2021/TT-BTC amended Circular 40/2021/TT-BTC guiding Personal Income Tax takes effect 1 January 2022. Changes include:
- eCommerce organisations are not required to declare taxes on the behalf of the sellers
- Business households and individuals with annual revenue of VND100 Million or less will not be subject to PIT or VAT
Adjustment to Pensions, Social Insurance Benefits and Monthly Benefits
From 20 January 2022, 7 groups of people will receive a 7.4% rise in their pensions, social insurance allowances, and monthly subventions under Decree 108. Individuals whose monthly allowance of VND2.3 million and below will receive an additional VN200,000, while those with a monthly allowance between VND 2.3 million and under 2.5 million will receive an additional allowance to make their total to VND2.5 million each per month.
Ho Chi Minh City Workers Receive Support from Unemployment Insurance Fund
As of 27 December, 2.4 million workers from Ho Chi Minh City have been provided with cash relief totalling over 5.6 trillion VND.
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The Harmonization of Tax Regulations (HPP) Law
The HPP Law will impact Income Tax, Value-Added Tax (VAT), and the General Tax Provisions Law. Key changes include:
- VAT rate gradually increasing from 10% to 11% from 1 April 2022, and then from 11% to 12% at some point no later than 1 January 2025.
- Removal of some previously exempt services like financial and medical services
- Introduction of Carbon Tax on the purchases of carbon-containing goods from 1 April 2022
- Tax bracket for individuals who earn Rp0-60 million per year
- New tax bracket of 35% for the highest income earners introduced for taxable income above IDR5 billion
For more information visit the government website or contact us now.
Minimum Wage for Jakarta Increases for 2022
Jakarta’s provincial minimum wage for 2022 will be set at Rs 4,641,854, increasing by 5.1%.
Foreigners Can Enter on Certain Conditions
Effective 15 September 2021, the Minister of Law and Human Rights issued Regulation No. 34 of 2021, changing the restrictions placed on foreigners entering Indonesia.
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Investment Projects to Create More Jobs
Cambodia has approved 195 new investment projects and 43 expansion requests to create 150,000 new jobs. Cambodia is aiming to change its employment structure from labour-intensive to a skill-based labour industry by 2025.
Government Plans Additional $250 Million Support for SMEs
The government plans to provide US$250 million through the state-run SME bank under the co-financing scheme to support the SME sector.
Monthly Minimum Wage for Textile, Garment and Footwear Workers Raised
From 1 January 2022, the monthly minimum wage for workers in the textile, garment and footwear workers will be raised to US$194.
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Creation of Department for Migrant Workers Set to Be Created
The final reading of the bill that proposes the creation of a department tasked to address the needs and concerns of overseas Filipino workers (OFWs), has been passed by the senate.
DO No 228: Expanded Compulsory Insurance Coverage for Rehires & Direct Hires
Each immigrant worker deployed by a recruitment agency shall be covered by a compulsory insurance policy which shall be secured at no cost to the said worked.
DO No 230: Guidelines on Support for workers in the Informal Economy
This guideline provides the appropriate mechanisms and intervention, including redress mechanism, in cases of Gender-Based Sexual Harassment in the workplace. This applies to employees covered by Domestic Workers Act; those employed in the informal economy; and those in establishments with ten or fewer employees.
Labor Advisory no 20: OSH Personnel in Stand- Alone Micro Health Care & Related Facilities
All health care facilities with no more than 9 workers and operating independently including medical and dental clinics, lying in clinics, optical clinics, laboratories and other similar health care and related facilities must have a designated Occupational Safety and Health Personnel who must complete a four-year health-related course. The establishment’s safety and health programs shall be submitted to DOLE.
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New Procedure and Remedies for Gender-Discrimination and Sexual-Harassment Claims
Effective 19 May 2022, employees will be able to petition the Labor Relations Commission for relief in gender discrimination and sexual harassment cases, and remedies include damages.
Government Support for Employers Allowing Parental Leave, Effective January 2022
Employers will be provided KRW2 Million per month for up to 3 months and KRW300,000 for up to 3 months after if an employee with a child less than 12 months old takes parental leave for 3 consecutive months or more.
Pregnant Workers Have Right to Request Working-Hours Adjustment and Use of Childcare Leave During Pregnancy
From 19 November 2021, pregnant female employees will have the right to request change to their start and end times.
Pregnant workers at medical risk of miscarriage will be allowed to use childcare leave while still pregnant. The total childcare leave period will still be one year.
New Penalties for Inadequate Handling of Workplace Harassment
New penalties introduced for failure to handle workplace harassment from October 14 2021:
- New administrative penalty of up to KRW10 million for an employer or relative of an employer who commits workplace harassment
- A penalty of up to KRW5 million for an employer that:
- Fails to promptly and objectively investigate reported harassment
- Fails to take necessary action to protect the victim and appropriate disciplinary action on the offender
New Chemicals Substances Named Hazardous to Workers
The Ministry of Employment and Labor has named 122 new chemical substances deemed hazardous to workers. Manufacturers and importers of these substances must submit a hazard and risk investigation report in advance in compliance with the Occupational Safety and Health Act.
Employment Incentives for Disabled in 2022
To improve the employment conditions for the disabled, a temporary 3-year project in 2022, “New Employment Incentive for Persons with Disabilities”, will provide businesses with financial support if they newly hire the disabled. Businesses with 5-49 workers that hire workers with disabilities after 1 January 2022 will be able to receive up to KRW9.6 million in support.
Job Stabilization Fund Extends till May 2022
Support for the Job Stabilization Fund will be till May 2022. The level of support and length of time has been reduced compared to 2021. The fund supports employers that maintain employment for at least one month and employ fewer than 30 workers with a monthly remuneration of 2.19 million won or less.
Domestic Workers Bill to be Enforced Later in 2022
The Domestic Workers Bill is expected to be enforced on 16 June 2022. When enforced domestic workers will be officially recognised workers and receive major insurance benefits and be guaranteed the minimum wage.
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Amendment to the Child and Family Care Act
Amendments to the Child and Family Care Leave Act (CFCLA) come into effect on 1 April 2022. Measure to be enforced by businesses include:
- Take measures to facilitate the use of childcare leave
- Abolishment that requires a fixed-term employee must be employed for at least a year to qualify for childcare and family care leave
Expansion of Companies to Requirements Under the Act on the Promotion of Female Participation and Career Advancement in the Workplace (APFPCA)
The requirements under the APFPCA are currently only applicable to companies with more than 300 regular employees. Effective from 1 April 2022, companies with more than 100 regular employees will be required to comply with the APFPCA. The APFPCA was enacted to provide an environment for women to demonstrate their abilities and play an active role in their working lives.
Record US$490 Billion Stimulus Package Unveiled
A $490 Billion stimulus package was unveiled to help cushion the impacts of the pandemic. Measures included in the budget include financial support loans to businesses that saw sales slumps, cash pay-outs to families, increase tax breaks to encourage employers to raise workers’ wages.
Amendment to Payment Period for Injury and Sickness Allowance in Health Insurance Act
The payment period for injury and sickness allowance will be “1 year and 6 months in total” from the start date of payment from the 1st January 2022.
The amendment means even if an employee becomes unable to work again due to the same injury or illness after returning to the work, they will be able to receive allowance again if the total days do not exceed 1 year and 6 months.
Previously, if the employee returned to work but were unable to work again due to the same injury or illness, they could not receive it if one year and six months had passed since the payment start date.
Stop Sexual Harassment Orders in the Fair Work Commission
From 11 November 2021, sexually harassed workers will be able to apply to the Fair Work Commission for an order to stop sexual harassment.
Industrial Relations Legislation Amendment Bill 2021 Passed
The Industrial Relations Legislation Amendment Bill 2021 has been passed and changes will commence in 2022. Some key changes include:
- Easter Sunday being recognised as a public holiday
- Providing the Western Australian Industrial Relations Commission (WAIRC) with the power to issue a stop sexual harassment order
- Introducing penalties for non-compliance with employment laws that align with the national industrial relations system
Unpaid Pandemic Leave and Annual Leave Changes to Awards
The Fair Work Commission has extended the entitlement to unpaid pandemic leave under Schedule X in many awards from 31 December 2021 until 30 June 2022.
Employer Tax and Super Obligations for COVID Vaccination Rewards Given to Staff
Employers have obligations if they have provided incentives and rewards to employees to get their COVID-19 vaccinations.
If cash payment is provided to employees, the employer must:
- Include the payment in your employee’s salary and wages
- Withhold tax from the payment amount under pay as you go withholding
- Include the amount in your employee’s ordinary time earnings. This is for the purpose of determining your super contributions for your employee.
Employers Must Continue to Withhold 15% Tax from Each Working Holiday Maker Employed
Regardless of the country, the employed working holiday maker is from, employers must continue to withhold 15% tax from their pay unless you receive a pay as you go variation notice from the ATO.
Single Touch Payroll (STP) Phase 2 Reporting Commences 1 January 2022
Businesses should transition to STP Phase 2 reporting at anytime throughout a financial year. Transition will be dependent on your circumstances and solutions used.
STP Deferral up to March 2022
Mandatory STP Phase 2 will begin 1 January 2022, however, if businesses begin reporting before 1 March 2022 they will be considered on time and will not need to apply for more time.
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One-Off Transition Payment for Move into the Traffic Light System
One-off transition payments will be available to eligible businesses that have seen reduced income between 3 October and 9 November. The payment will be available through the RSP system.
Government Announces COVID-19 Workplace Vaccination Legislation
The Government has announced new legislation outlining workplace vaccination requirements, taking the next step in stopping the spread of COVID-19.
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