Onboard, Links International’s quarterly update that keeps you aware of significant payroll and visa developments across Asia.
Financial Secretary announces Hong Kong Budget
Hong Kong’s Financial Secretary, Mr. Paul Chan Mo-Po, has announced the Budget for the year 2018/2019, outlining the government’s plans for the economy and proposals for changes to taxation.
China offers 10-year visas to ‘high end talent’
China is issuing five to 10-year multi-entry visas to lure highly skilled people from abroad to work in the country. The most eligible to apply will be technology leaders, entrepreneurs and scientists from in-demand sectors. Applications for these visas can be made online, free of charge and will be processed quickly.
Work permit renewal policy updated
As of 28 February 2018, foreign companies are required to submit work permit renewal applications for their foreign workers at least 30 days before the work permit expires. If the company misses the deadline to renew the work permit, they will need to follow the procedures for applying for a new work permit. Given the time it takes for the work permit renewal, companies are advised to begin the renewal process 60-90 days before the expiry date.
Shanghai’s minimum wage to rise on 1 April
The authorities in Shanghai have announced that they plan to increase the statutory minimum wage in the commercial capital from 1 April 2018. Wages for full-time workers will be raised to RMB 2,420 per month, while wages for part-time employees will be raised to RMB 21 per hour. This five percent increase is the same as the 2017 wage adjustment, but lower than in previous years.
Relaxed documentation requirements related to child adoption and parental leave
The Ministry of Labor has issued a circular which explains that, under the Act of Gender Equality in Employment, employees who lived together with their adopted children prior to adoption can apply for unpaid parental leave.
Taiwan passes amendment to labour law to increase overtime work hours
The Legislative Yuan in Taiwan has approved a new amendment to the labour law under which employees can work 14 consecutive days and then have four days off if employers and labour unions agree. In addition to this, the maximum overtime working hours will be increased from 46 hours to 54 hours per month, capped at 138 hours for a three-month period. Employers can compensate employees’ overtime work at normal hourly rate or time-off. These amendments are expected to take effect from 1 March 2018.
MOM releases revisions to Employment Act
The Ministry of Manpower (MOM) has announced that the $4,500 salary cap will be removed from the Employment Act and professionals, managers and executives (PMEs) will be covered by the Act. This means that all PMEs, not only those earning under $4,500, will enjoy core employee benefits.
Singapore government increases funding for flexible work schemes
A decision has been made to extend and enhance Singapore’s work-life grant, which was due to expire this month. This will mean that employers will find it easier to get financial help to trial flexible work arrangements, effective from July.
Singapore’s 2018 budget announced
Singapore’s finance minister, Mr. Heng Swee Kiat delivered the 2018 budget on 19 February. This year’s budget focused on helping businesses in Singapore prepare for future challenges and create new opportunities. Much of the budget’s schemes and proposals are directed towards greater investment in and around the development of Singapore’s knowledge resources and the growth of domestic firms.
Malaysian government considers increasing minimum wage
Malaysia’s Deputy Home Minister Nur Jazlan Mohamed has revealed that the government is considering a proposal to increase the minimum wage, in order to help low- and middle-income earners to cope with rising living costs. The other long-term proposal being considered is to create more employment opportunities for Malaysian people to help generate extra income.
Foreign workers permit made easier
The Indonesian government plans to simplify the foreign workers’ employment (TKA) permit and has promised to tighten the supervision. One of these plans is to remove the need for a recommendation, given the time it takes.
Income tax treatment under tax treaties re-regulated
The Ministry of Finance has issued a new regulation (202/PMK.010/2017) which entitles foreigners and Indonesian nationals to certain preferential income tax treatments, provided they are employees of international organisations and/or are subject to international law. These preferential treatments are stipulated under each individual tax treaty between Indonesia and foreign countries, and will remain in place until the expiry of the related tax treaties.
Non-mandatory Central Provident Fund system is now in force
The Law 7/2017, ‘Non-Mandatory Central Provident Fund System’ came into force on 1 January this year. The existing provident fund individual accounts have automatically become government-managed sub-accounts.
FSS calls on old-age and disability pension beneficiaries to provide the proof of life
Macau’s Social Security Fund (FSS) stated that about 108,000 old-age and disability pension beneficiaries must provide the proof of life before the end of March, otherwise the related benefit will be suspended from April onwards.
Birth allowance increases to 5,000 Patacas
The Macao SAR Gazette has published Executive Order No. 26/2018 regarding the increase of birth allowance of the social security system to 5,000 Patacas, effective 1 January 2018. The new amount applies to applications for childbirth or adoption of a child on or after 1 January this year, and both eligible parents can receive this birth allowance.
South Korea labour code overhaul cuts maximum work week
The calculation of maximum weekly work hours, overtime provisions and treatment of public holidays in South Korea are to change under new amendments to the Labor Standards Act. The maximum number of working hours in a week will decrease from 68 to 52. Employees aged between 15 and 18 years will now work a maximum of 35 hours per week, instead of 40.
Year-end bonus is not part of statutory insurance contribution
On 6 February 2018, MOLISA issued an official letter determining the salary level for paying social insurance. Accordingly, the monthly salary for paying social insurance includes salary, allowances and other supplements. Therefore the employee’s bonus, which includes a 13th month salary or performance bonus, is not entitled for statutory insurance contribution.
Increase to minimum wages
With effect from 1 January 2018, Vietnam has reviewed the minimum wage caps. The common minimum wage has been increased to 1,390,000 VND per month, with effect from 1 July 2018. Meanwhile the regional minimum salaries have been amended to:
Region I: VND3,980,000 per month
Region II: VND3,530,000 per month
Region III: VND3,090,000 per month
Region IV: VND2,760,000 per month
Hanoi Tax Department provides guidance on 2017 PIT finalisation
The Hanoi Tax Department has issued an official letter providing guidance on 2017 PIT finalisation and tax codes for dependents.
Thailand introduces new four-year Smart Visas for investors
Foreign entrepreneurs investing in new businesses and highly skilled professionals or executives can now apply for a new 4-year ‘Smart Visa’ to live and work in Thailand, effective 1 February 2018. This new visa will only be open to foreigners working or investing in the ten S-curve targeted industries.
Cambodia’s DTAs with Singapore and Thailand come into effect
On 1 January 2018, Cambodia’s two Double Tax Agreements (DTAs) with Singapore and Thailand came into effect. The two DTAs aim to clarify taxation rights on all forms of income arising from cross-border economic activities between the signatory jurisdictions.
PH labour hotline helps resolve 127,000 issues
The Philippines Department of Labor and Employment has resolved roughly 127,000 cases brought to its attention through a dedicated 24-hour, seven-day hotline where workers can raise questions on labour issues and grievances.
Japan to offer one-stop e-filing for businesses
The Japanese government aims to slash the hours that companies spend on tax and other filings by more than a fifth through consolidating various government e-filing platform. The new system will be introduced in 2020 and will eliminate the need to input the same data multiple times.
Australian businesses urged to prepare for payroll reform
The Australian Taxation Office (ATO) is urging businesses with 20 or more employees to ensure that they are prepared for the roll-out of Single Touch Payroll (STP), which will be required for businesses of this size from 1 July 2018. The system will be extended to all employers from 1 July 2019.
Temporary Skill Shortage visa replaces subclass 457 visa
From March 2018, the Temporary Skill Shortage (TSS) visa will replace the subclass 457 visa with new requirements, including but not limited to tightened English language requirements, a minimum of two years’ work experience and mandatory labour market testing. The eligibility requirements for permanent skilled visas have also been tightened from March 2018.
Small business payroll subsidy renewed
The Cabinet has agreed to extend the subsidy for professional payroll intermediaries who manage an employer’s PAYE obligations for a further two years. This subsidy allows small businesses to outsource the task of managing payroll and offers a significant benefit.
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