APAC newsletter

Australia to expand Double Tax Treaty network

Australia will enter into 10 new or updated double tax treaties by the end of 2023, the first phase of which will include a revised Indian–Australian treaty, as well as new treaties with Luxembourg and Iceland.  Further revised or new treaties are proposed with Greece, Portugal and Slovenia.

https://www.internationaltaxreview.com/article/b1tstgvbns2cbs/australia-announces-expanded-double-tax-treaty-network

China

(NEW) Urban Land Use tax incentive

From 1 January 2023 to 31 December 2027, for the self-owned (including self-used and rented out) or rented land of logistics enterprises for bulk commodity storage facilities, the urban land use tax shall be levied according to 50% of the standards of applicable tax amounts to the land grade concerned.

財政部 稅務總局關于繼續實施物流企業大宗商品倉儲設施用地城鎮土地使用稅優惠政策的公告 (chinatax.gov.cn)

Date effective: 1 January 2023

(NEW) Corporate Income tax incentive

From 1 January 2023 to 31 December 2024, the portion of an annual taxable income amount of a small low-profit enterprise, which does not exceed RMB1m, shall be computed at a reduced rate of 25% as a taxable income amount, and be subject to enterprise income tax at a 20% tax rate, i.e. the final effective tax rate is 5%.

財政部 稅務總局關于小微企業和個體工商戶所得稅優惠政策的公告 (chinatax.gov.cn)

Date effective: 1 January 2023

(NEW) CIT incentive – R&D expenses

If the R&D expenses actually incurred by an enterprise(Caishui [2015] No. 119 and Caishui [2018] No. 64) in its R&D activities are not included in the current profits and losses as intangible assets, they shall be deducted before tax based on 100% of the actual amount incurred as of 1 January 2023, on the basis of actual deductions according to regulations. As of 1 January 2023, intangible assets formed shall be amortised at 200% of the cost of intangible assets before tax.

財政部 稅務總局關于進一步完善研發費用稅前加計扣除政策的公告 (chinatax.gov.cn)

Date effective: 1 January 2023

(NEW) Individual Income tax

From 1 January 2023 to 31 December 2024, for the portion of the annual taxable income amount of individually-owned businesses which does not exceed RMB1m, individual income tax shall be reduced by 50% on the basis of the prevailing incentives.

國家稅務總局關于落實支持個體工商戶發展個人所得稅優惠政策有關事項的公告 (chinatax.gov.cn)

Date effective: 1 January 2023

(NEW) Employment Security Funds for the Disabled incentive

From 1 January 2023 to 31 December 2027, the policy for a graded reduction of the contribution to the employment security fund for the disabled shall be implemented; enterprises with less than 30 in-service employees (inclusive) will be temporarily exempted from the contribution to the employment security fund for the disabled.

關于延續實施殘疾人就業保障金優惠政策的公告 (mof.gov.cn)

Date effective: 1 January 2023

(NEW) E-invoice

Three new pilot city/province for Fully Digitised Issuance of Electronic Invoices in Ningbo.

國家稅務總局寧波市稅務局 通知公告 國家稅務總局寧波市稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 30 March 2023

(NEW) E-invoice

New pilot city/province for Fully Digitised Issuance of Electronic Invoices in Yunnan province.

國家稅務總局云南省稅務局 通知公告 國家稅務總局云南省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 30 March 2023

(NEW) E-invoice

New pilot city/province for Fully Digitised Issuance of Electronic Invoices in Shenzhen.

關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 30 March 2023

(NEW) E-invoice

Fully Digitised Issuance of Electronic Invoices in Fujian province.

國家稅務總局福建省稅務局關于開展全面數字化的電子發票受票試點工作的公告（附解讀） _ 通知公告 _ 國家稅務總局三明市稅務局 (chinatax.gov.cn)

Date effective: 18 July 2022

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Jiangsu province.

國家稅務總局江蘇省稅務局網站 政策文件 國家稅務總局江蘇省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Zhejiang province.

國家稅務總局浙江省稅務局 省局文件 國家稅務總局浙江省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Hainan province.

國家稅務總局海南省稅務局關于開展全面數字化的電子發票試點工作的公告（國家稅務總局海南省稅務局公告2023年第1號） (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Shanxi province.

國家稅務總局山西省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Liaoning province.

國家稅務總局遼寧省稅務局 政策法規庫 國家稅務總局遼寧省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Jiangxi province.

國家稅務總局江西省稅務局 最新文件 國家稅務總局江西省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Gansu province.

國家稅務總局甘肅省稅務局 最新文件 國家稅務總局甘肅省稅務局關于開展全面數字化的電子發票試點工作的公告 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) E-invoice

New pilot province for Fully Digitised Issuance of Electronic Invoices in Guangxi province.

國家稅務總局廣西壯族自治區稅務局關于開展全面數字化的電子發票試點工作的公告_國家稅務總局廣西壯族自治區稅務局 (chinatax.gov.cn)

Date effective: 27 April 2023

(NEW) CIT incentive

Clarify the criteria to preferential corporate income tax policies entitlement of enterprises set up in the Pingtan Comprehensive Experimental Zone in Fujian Province.

國家稅務總局平潭綜合實驗區稅務局 平潭綜合實驗區財政金融局 平潭綜合實驗區經濟發展局 平潭綜合實驗區市場監督管理局 關于明確福建平潭綜合實驗區企業所得稅優惠政策有關問題的公告_ 稅收政策_ 國家稅務總局平潭綜合實驗區稅務局 (chinatax.gov.cn)

Date effective: 1 January 2023

(NEW) E-voucher accounting data

Ministry of Finance of the PRC Caikuai [2023] No.18, noticed standard of e-invoices, e-bank slips, and e-tax payment vouchers, etc.

財政部會計司關于公布電子憑證會計數據標準（試行版）的通知 (mof.gov.cn)

Date effective: 17 May 2023

(NEW) Tax treaty

Tax treaty officially takes effect between China and Bulgaria, Indonesia, Mexico, Romania, Russia and South Africa, from 31 May 2023.

國家稅務總局關于《實施稅收協定相關措施以防止稅基侵蝕和利潤轉移的多邊公約》適用中國與保加利亞等國雙邊稅收協定的公告 (chinatax.gov.cn)

Date effective: 31 May 2023

Exemption of Vehicle Purchase Tax 

In order to support the development of the new energy vehicle industry and promote automobile consumption, an announcement was made on matters relating to the continuation of policies for exemption of vehicle purchase tax on new energy vehicles.

http://www.chinatax.gov.cn/chinatax/n371/c5181733/content.html

Value-Added Tax (VAT) incentives

The Ministry of Finance (MOF) and State Taxation Administration jointly released Circular [2023] No. 1 to specify: 1) VAT exemption treatments for small-scale VAT taxpayers if the monthly or quarterly income does not exceed RMB100K or RMB300K; 2) Super input VAT credit with an extra 5% or 10% for general VAT taxpayers in different industries effective from 1 January 2023 to 31 December 2023; 3) The statutory VAT collection rate/provisional VAT rate at 3% for small-scale VAT taxpayers is reduced to 1%.

http://www.chinatax.gov.cn/chinatax/n359/c5183530/content.html

E-invoice

Shanghai Municipal Tax Administration released Notice [2023] No. 1 announcing that newly-established and registered taxpayers in Shanghai are included in the pilot scope of fully digitalised e-invoicing since 20 January 2023. Accordingly, all taxpayers covered in the pilot in Shanghai are no
longer required to collect special Value-Added Tax (VAT) electronic invoices and general VAT electronic invoices from the tax authorities.

http://shanghai.chinatax.gov.cn/zcfw/zcfgk/swzsgl/202301/t465817.html

Corporate income tax annual return

State Taxation Administration released Announcement on the Annual Corporate Income Tax Return of the State Administration of Taxation on Relevant Issues.

http://www.chinatax.gov.cn/chinatax/n810341/n810760/c5183638/content.html

Cross-border e-commerce taxes incentive

Goods (excluding foodstuffs) declared for exports under the cross-border e-commerce customs regulatory code (1210, 9610, 9710, 9810), within one year as of the date of promulgation of this Announcement and returned to China in original conditions within six months from the date of export due to reasons of sluggish sale and return of goods, are exempt from import duties along with import VAT and consumption tax.

http://www.chinatax.gov.cn/chinatax/n377/c5184003/content.html

Fault-tolerant mechanism for certain tax matters

State Tax Administration released Circular [2022] No. 26 which implements the fault-tolerant mechanism for certain tax matters by allowing taxpayers to supplement or correct materials through on-site submission, postal delivery or other methods approved by the tax authorities within 20 working days.

http://www.chinatax.gov.cn/chinatax/n810341/n810825/c101434/c5183829/content.html

Export taxes refund rate library update

Notice of the State Administration of Taxation on Issuing the 2023A Version of the Export Taxes Refund Rate Library.

http://www.chinatax.gov.cn/chinatax/n377/c5185269/content.html

Simplifying process for alteration of tax registration

Taxpayers are not required to report the alteration of tax registration after they have applied for alteration with the market supervision and regulation authorities. Such changes of information shall be automatically synchronised in the Core Collection and Management System of Golden Tax Phase III.

http://www.chinatax.gov.cn/chinatax/n810341/n810825/c101434/c5183506/content.html

Additions to VAT incentive scheme

Expanding the scope of industries entitled to the policy of a full refund of VAT credits to:

• wholesale and retail industries
• agriculture, forestry, husbandry and fishery
• accommodation and catering industries
• resident services, repair and other services
• education
• health and social work
• culture, sports and entertainment industries.

http://www.chinatax.gov.cn/chinatax/n359/c5175898/content.html

Hong Kong

(NEW) Exemption for small businesses from submitting audited financial statements when filing profits tax returns revoked

Small corporations and businesses with gross income not exceeding $2m will no longer be exempt from furnishing financial statements and tax computation when filing their tax returns. All Hong Kong incorporated companies are required to furnish their returns together with the audited financial statements with the only exception for dormant companies within the definition of the Companies Ordinance. With the removal of this exemption, it is expected that a profits tax return filed on a “nil” basis without the support of the audited financial statements will likely be subject to close scrutiny by the Inland Revenue Department (IRD). Please note that failure to submit a profits tax return with the audited financial statements and all other supporting documents on time is an offence which may result in prosecution and/or a penalty imposed by the IRD.

https://www.ird.gov.hk/eng/pdf/bel23e.pdf

Date effective: 20 March 2023

(NEW) Extended Due Date for ‘N’ Code Returns

The Inland Revenue Department has decided to extend the due date for filing 2022/23 Profits Tax returns with Accounting Date Code ‘N’ (i.e., accounting date falls within 1 April 2022 to 30 November 2022) from 3 May 2023 to 17 May 2023.

https://www.ird.gov.hk/eng/pdf/bel23ea.pdf

Date effective: 14 April 2023

(NEW) Passage of Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Bill 2022

On 10 May 2023, the Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Bill 2022 was passed by the Legislative Council. The Bill exempts a family-owned investment holding vehicle's (FIHV) assessable profits earned from qualifying transactions and incidental transactions from payment of profits tax. To attain the policy objective of bringing investment management and related activities to Hong Kong, the FIHV shall be managed by an eligible single family office and fulfil the minimum asset threshold of $240m and substantial activities requirement.

https://www.ird.gov.hk/eng/ppr/archives/23051002.htm

Date effective: 19 May 2023

Hong Kong Financial Budget 2023/24

Proposed tax and business-related measures announced in the 2023/24 Budget Speech:

Profits tax - Reducing Profits Tax for 2022/23 by 100%, subject to a ceiling of HK$6,000 (rather than the more generous ceiling of HK$10,000 of the last two years).

Salaries tax - Reducing Salaries Tax and tax under personal assessment for 2022/23 by 100%, subject to a ceiling of HK$6,000 (rather than the more generous ceiling of HK$10,000 of the last two years).

Rates - Providing rates concession for both domestic and non-domestic properties for the first two quarters of 2023/24, subject to a ceiling of HK$1,000 per quarter.

New International Tax Standards - In October 2021, the Organisation for Economic Co-operation and Development (OECD) announced the international tax reform proposals to address base erosion and profit shifting (BEPS 2.0). A global minimum effective tax rate of 15% will be introduced on multinational enterprise (MNE) groups with global turnover of at least €750m. Hong Kong plans to apply the global minimum effective tax rate on these large MNE groups and implement the domestic minimum top-up tax starting from 2025 onwards. The Hong Kong government will launch a consultation exercise to allow MNE groups to make early preparation.

Disposal of Equity Interests - in order to maintain Hong Kong’s competitiveness in terms of its simple and low tax regime, the Government will put forward an enhancement proposal in mid-March to provide clearer guidelines on under what conditions gains on disposal of equity interest will be regarded as onshore non-taxable capital gains in Hong Kong.

https://www.budget.gov.hk/2023/eng/index.html

Jurisdiction included in EU watchlist on tax cooperation

The European Union announced on the inclusion of Hong Kong in its watchlist on tax cooperation 5 October 2021. The concern is that corporates with no substantial economic activity in Hong Kong are not subject to tax in respect of certain passive offshore income. Areas such as interest and royalties might lead to situations of ’double non-taxation’.

In response to this, the HKSAR Government has agreed to cooperate with the EU and has committed to amend the Inland Revenue Ordinance (Chapter 112 of the Hong Kong laws) by the end of 2022 and implement relevant measures in 2023, while reiterating that Hong Kong will continue to adopt the territorial source principle of taxation.

Government starts a legislative process on the tax deduction for domestic rent

The Hong Kong SAR Government seeks to implement tax deduction for taxpayers liable to salaries tax on rent paid for eligible domestic premises.  Such a measure aims to reduce the burden on taxpayers who do not own domestic property.

https://www.ird.gov.hk/eng/ppr/archives/22050402.htm

India

(NEW) E-invoicing under GST

Revision of Limit of Aggregate Turnover for E-Invoice w.e.f. 01.04.2022 - E-invoicing under GST has been made mandatory for registered persons having aggregate turnover above ?20 crore in any of the previous years from 2017-18 to 2021-22, with effect from 1 April 2022. This limit of ?20 crores has been further reduced to ?10 crore, i.e. w.e.f. 1 October 2022 and recently there has been a further reduction in the limit for E-invoicing applicability.

Now, w.e.f. 1 August 2023, any registered taxable person with aggregate turnover exceeding ?5 Crores in any financial year from 2017-18, is required to report the invoices, credit notes and debit notes to the E-Invoice portal in Form INV-01.

https://taxinformation.cbic.gov.in/view-pdf/1009732/ENG/Notifications

Date effective: 1 August 2023 

Mandatory e-invoicing for taxpayers with aggregate turnover more than INR100m.

 With effect from 1 October 2022, any registered taxable person with an aggregate turnover exceeding INR100m in any financial year from 2017/18, is required to report the invoices, credit notes and debit notes to the E-Invoice portal in Form INV-01. CBIC has reduced the aggregate turnover limit from INR200m to INR100m.

https://www.cbic.gov.in/resources/htdocs-cbec/gst/17_2022_CT_Eng.pdf

Clarifications regarding applicable GST rates & exemptions on certain services

The Central Board of Indirect Tax & Customs (CBIC) has issued clarifications on various topical issues that pertain to taxability and application of the appropriate rate on supplies of goods and services under various business activities.

Some of the clarifications pertain to applicability of GST on forfeiture, liquidated damages, compensation and penalties arising from breach of contract or other provisions of law.

https://taxinformation.cbic.gov.in/view-pdf/1003115/ENG/Circulars

Amendment in Payment of GST, interest, penalty and other amounts

Section 49(10): A Registered person may transfer any amount of tax, interest, penalty, fee or any other amount from its ECL to ECL of a distinct person under subsection (4) & (5) of Section 25 and such a transfer shall be deemed to be a refund from ECL; provided that said registered person (transferrer) has no unpaid liability in their electronic liability register.

Section 50(3): A registered person who has wrongly availed and utilised the Input Tax Credit (ITC), shall pay interest at 24% on such wrongly availed and utilised ITC. (If it was wrongly availed whether or not there was a utilised or an excess reduction in output tax liability, then the said registered person shall pay interest at 24% on wrongly availed ITC).

https://taxinformation.cbic.gov.in/view-pdf/1009412/ENG/Notifications

CBIC exempts taxpayers having AATO up to INR20m from the requirement of furnishing the annual GST return

Section 44: the registered person whose aggregate turnover in the financial year 2021-22 is up to INR20m, shall be exempted from filing an annual return for the said financial year.

https://taxinformation.cbic.gov.in/view-pdf/1009413/ENG/Notifications

Indonesia

Update on VAT invoices arrangement in alignment with the harmonisation of tax regulation law

Director of General Tax Regulation Number PER-03/PJ/2022 covers the update on VAT invoices. It includes additional required information on the VAT invoices, addressed related to a VAT centralisation mechanism, transaction code, electronic VAT invoice upload time limitation, host-to-host electronic VAT invoice application and the transitional period arrangement.

https://datacenter.ortax.org/ortax/aturan/save/17765

Japan

(NEW) Application for qualified tax invoice issuer: due date changed

The due date of application for a qualified tax invoice issuer was changed to the end of September 2023. Even if a letter of the registered number provided by the tax authority does not arrive at the company by 1 October 2023, the company can be deemed as a registered company on 1 October 2023, as long as the application is submitted by the end of September 2023.

https://www.nta.go.jp/publication/pamph/shohi/kaisei/202304/pdf/0023002-106.pdf

Date effective: 1 April 2023

Application to be a Registered Issuer on JCT

Japan introduces a new invoice system for Japanese Consumption Tax (JCT) effective from 1 October 2023.

The new system will require business customers to retain qualified invoices issued by registered issuers which fulfil certain conditions in order for them to claim input JCT credits while requiring sellers to issue such qualified invoices.

Sellers need to submit applications by March 2023 to be registered to issue qualified invoices (registered issuers). 

(Consumption Tax) Qualified invoice registration

The qualified invoice method will be introduced as of 1 October 2023. Before the introduction, business entities need to apply for an identification number from 1 October 2021 to 31 March 2023 with the tax authority to be able to issue qualified invoices.

Direct Tax Compliance

Electronic document storage has been postponed for two years.

The 2021 Japan tax reform made certain fundamental revisions to the Electronic Record Retention Law – where storage in the form of electronic record is required – and hard copy format is no longer permitted for the records, related to electronic transactions as from 1 January 2022. However, the requirement for  electronic document storage has been postponed for two years.

Malaysia

Key regulatory changes in 2022 budget

The Malaysian Budget 2022 was announced on 29 October 2021 and the following are some key takeaways:

• Foreign sourced income received by Malaysian residents will be taxable from 1 January 2022.
• Current unused business losses that can be carried forward from 2019 onwards will be extended from a maximum period of 7 consecutive YAs to a maximum period of 10 consecutive YAs. In addition, the accumulated unused losses up to YA 2018 that can be carried forward to YA 2025 will be extended until YA 2028, effective from YA 2019.
• Special Reinvestment Allowance (RA), which is available from YA2020 to YA2022 for companies that have exhausted their 15 years RA period will be extended until 2024.

New Zealand

(NEW) Use of Tax Invoices changes

New laws introduced to modernise GST rules for invoicing and record keeping, which includes e-invoicing rules - New laws introduced by the government, taking effect on 1 April 2023, have modernised the GST rules for invoicing and record keeping. The requirement to use tax invoices is being replaced by a more general requirement to provide and keep certain records known as ‘taxable supply information’. How you calculate GST is not changing.

Modernising record keeping for GST (ird.govt.nz)

Date effective: 1 April 2023

(NEW) GST on online marketplaces

Imposition on digital platforms Goods and Services Tax (VAT) on ride and accommodation sharing (Uber, Airbnb) - Consistent with recent Inland Revenue (IR) proposals, the bill introduces changes that would require operators of electronic marketplaces (both offshore and in New Zealand) which supply "listed services" [certain transportation services (ride sharing), beverage and food delivery services and taxable accommodation services (e.g., short-stay accommodation)] to account for GST on the listed services where those services are supplied to customers in New Zealand. It is currently the underlying supplier's responsibility to account for the GST (if GST registered).

The proposals also include introduction of the "flat rate" regime for the benefit of underlying suppliers who are not registered for GST purposes (for e.g., on the basis they do not exceed the GST registration threshold). Under the regime, the operators of electronic marketplaces would be entitled to make a deduction of the GST payable (being 8.5% of the value of services) and pass it on to the underlying suppliers to compensate them for their inability to claim GST on costs incurred in relation to the supplies. For completeness, suppliers of these services who are registered for GST will continue to take input tax deductions for the GST on their costs in making these supplies in the usual way.

https://www.taxpolicy.ird.govt.nz/publications/2022/2022-dd-digital-platforms-gig-sharing-economy/chapter-4#extended

Date effective: 1 April 2024

Modernising Goods & Services Tax (GST) rules for invoicing and record keeping

The new Rules are designed to support e-invoicing and electronic record keeping, particularly New Zealand’s adoption of the Pan-European Public Procurement Online (PEPPOL) framework.

Starting from 1 April 2023, there will be a new terminology to support flexible record keeping practices. For example, the term “taxable supply information” will replace the current term “tax invoice”.

In addition, starting from 1 April 2023:

• New information requirements will need to be met based on the value and type of supply.
• Transaction records, accounting systems, supplier agreements and contracts can be used to meet the information requirements.
• A single document that holds all the supply information will no longer need to be kept, such as a tax invoice, credit note or debit note.
• Taxable supply information can be provided using an automated direct exchange between a buyer’s and seller’s software, for example PEPPOL e-invoicing.

https://www.ird.govt.nz/updates/news-folder/modernising-gst-goods-and-services-tax 

Philippines

(NEW) RR No. 3-2023 - Amends certain provisions of RR No. 16-2005, as amended by RR No. 21-2021, to implement Sections 294 (E) and 295 (D), Title Xlll of the NIRC of 1997, as amended by RA No. 11534 (CREATE Act), and Section 5, Rule 2 and Section 5, Rule 18 of the CREATE Act IRR, as amended. (Published in Manila Times on April 28, 2023)

SEC. 4.106-5. Zero-Rated Sales of Goods or Properties. A zero-rated sale of goods or properties by a VAT-registered person is a taxable transaction for VAT purposes but shall not result in any output tax. However, the input tax on purchases of goods, properties, or services, attributable to such zero-rated sales, shall be available as a tax credit or refund in accordance with these Regulations.

https://www.bir.gov.ph/images/bir_files/internal_communications_1/Digests%20RR%202023/RR%203-2023%20Digest%20FINAL.pdf

Date effective: 26 April 2023

(NEW) RR No. 5-2023 - Amends Revenue Regulations No. 5-2021 on the requirements in availing the Income Tax exemption of foreign-sourced dividends received by a Domestic Corporation (Published in Manila Times on May 10, 2023)

No credit or deduction under Section 34(C) of the Tax Code shall be allowed for any taxes of foreign countries paid or incurred by the domestic corporation in relation to the exempt foreign-sourced dividends. Finally, any taxes of foreign countries paid or incurred by the domestic corporation in relation to the exempt foreign-sourced dividends shall be disregarded in computing the limitations provided under Section 34(C)(4) of the Tax Code.

https://www.bir.gov.ph/images/bir_files/internal_communications_1/Digests%20RR%202023/RR%205-2023.pdf

Date effective: 5 May 2023

(NEW) RMO No. 6-2023 - Prescribes Updated and Consolidated Policies, Guidelines and Procedures for BIR Audit Program

In general, all taxpayers are considered as possible candidates for audit. To cover such audit/investigation, electronic Letters of Authority (eLAs) or a Tax Verification Notice (TVN), as applicable, shall be issued. Mandatory cases are transactions to which an audit is required as a condition precedent for the issuance of tax clearance, processing of claims for tax credit/refund and other cases as may be identified by the Commissioner of Internal Revenue (CIR) as a priority target for audit/investigation.

https://www.bir.gov.ph/images/bir_files/internal_communications_3/2023/Digest/RMO%20No.%206-2023%20Final%20Digest.pdf

Date effective: 9 February 2023

(NEW) RMO No. 8-2023 - Amends certain provisions of RMO No. 6-2023, prescribing the updated and consolidated policies, guidelines and procedures for BIR Audit Program

Annex A of RMO No. 6-2013 pertaining to the standard template for a Termination Letter is revised to include stipulation regarding discovery of fraud.

https://www.bir.gov.ph/images/bir_files/internal_communications_3/2023/Digest/RMO%20No.%208-2023%20Digest%20FINAL.pdf

Date effective: 20 March 2023

(NEW) RMO No. 10-2023 - Prescribes the supplemental guidelines on the application for Electronic Authority to Release Imported Goods (eATRIG) by importers of sweetened beverages through the Philippine National Single Window (NSW) System in relation to RMO No. 14-2014

All applications for eATRIG shall be filed through the NSW and details/information pertaining to such applications shall be lodged using the Other Special Law or International Agreement (OSLA) field.

https://www.bir.gov.ph/images/bir_files/internal_communications_3/2023/Digest/RMO%20No.%2010-2023%20Digest%20FINAL.pdf

Date effective: 21 March 2023

(NEW) RMO No. 18-2023 - Amends the policies and procedures in the issuance of the Authority to Cancel Assessment (ATCA) as provided in RMO No. 33-2018

The issuance of ATCA relative to protested tax assessments has been identified as redundant. Hence, this Order is issued to remove Item III.1 (a) form among the instances requiring the issuance of ATCA as mentioned in RMO No. 33-2018. This particular item pertains to the issuance of ATCA for protested assessment which is not yet final and delinquent. All other items listed thereof shall remain to be in effect as these all pertain to tax assessments which were reported and determined "delinquent account" but later approved for compromise settlement, amnesty or abatement of penalties, or declared prescribed, including tax assessments determined to be invalid or worthless.

https://www.bir.gov.ph/images/bir_files/internal_communications_3/2023/Digest/RMO%20No.%2018-2023%20Digest.pdf

Date effective: 19 May 2023

(NEW) RMO No. 21-2023 - Prescribes the policies, guidelines and procedures in the disposal of valueless records in the Bureau of Internal Revenue (BIR)

Prescribes uniform guidelines and procedures in the disposal of valueless records in the BIR. Defines the roles and responsibilities of all concerned offices, officials and employees in the effective implementation of the disposal of valueless records. Ensures the Bureau's compliance with RA No. 10173 or the "Data Privacy Act (DPA) of 2021", its Implementing Rules and Regulations (IRR), and all relevant issuances of the National Privacy Commission (NPC), and other applicable laws and policies.

https://www.bir.gov.ph/images/bir_files/internal_communications_1/Advisory/2023/Issuances/RMO%20No.%2021-2023.pdf

Date effective: 1 June 2023

(NEW) RMC No. 3-2023 - Prescribes the policies and guidelines on the Online Registration of Books of Accounts

All books of accounts shall be registered online with the Bureau's Online Registration and Update System (ORUS). Instead of the manual stamping of books of accounts, a Quick Response (QR) Code shall be generated, which can be validated online.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%203-2023.pdf

Guidelines: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMCs/RMC%20No.%203-2023%20Attachment.pdf

Date effective: 10 January 2023

(NEW) RMC No. 5-2023 - Provides transitory provisions for the implementation of the Quarterly filing of VAT Returns starting 1 January 2023 pursuant to Section 114(A) of the Tax Code of 1997, as amended by RA No. 10963 (TRAIN Law)

VAT-registered taxpayers are no longer required to file the Monthly Value-Added Tax Declaration (BIR Form No. 2550M) for transactions starting 1 January 2023, but will instead file the corresponding Quarterly Value-Added Tax Return (BIR Form No. 2550Q) within  25 days following the close of each taxable quarter when the transaction transpired.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%205-2023.pdf

Date effective: 13 January 2023

(NEW) RMC No. 7-2023 – Clarifies the Return Processing System (RPS) Assessment being issued by the BIR

The sending of "RPS Assessment" should not be likened to and is not an Assessment Notice arising from audit where the taxpayer has the chance to contest or protest. Considering that no books of accounts and accounting records of the taxpayer are to be examined or subjected to audit, the issuance of a Letter of Authority shall not be required.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%207-2023.pdf

Date effective: 17 January 2023

(NEW) RMC No. 8-2023 - Circularises the revised provision on the submission of Inventory List and other reporting requirements pursuant to Revenue Memorandum Circular No. 57-2015

AII taxpayers with tangible asset-rich balance sheets, often with at least half of their total assets in working capital assets, e.g., accounts receivable and inventory, shall submit, in addition to the annual inventory list, schedules/lists prescribed herein, in soft copies.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%208-2023.pdf

Date effective: 20 January 2023

(NEW) RMC No. 12-2023 - Announces the availability of online application for registration information updates and other online facilities for registration-related transactions through Online Registration and Update System (ORUS)

Taxpayers who already have an existing ORUS account may access and avail the online registration updates and other functionalities by logging-in to the system. Taxpayers who do not have an ORUS account and opt to use the said online registration-related facilities are required to enrol or create an account in ORUS, following the guidelines prescribed under Revenue Memorandum Circular No. 122-2022.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2012-2023.pdf

Date effective: 27 January 2023

(NEW) RMC No. 15-2023 - Publishes the full text of Memorandum Circular No. 2023-001 by the Board of Investments (BOI)

Publishes the full text of Memorandum Circular No. 2023-001 issued by the Board of Investments (BOI) through Board Resolution Number 02-01, Series of 2023, for the clarification on the coverage of logistic services as "Activities in Support to Exporters" under the 2022 Strategic Investment Priority Plan (SIPP).

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2015-2023.pdf

Date effective: 3 February 2023

(NEW) RMC No. 17-2023 - Publishes the full text of FIRB Advisory No. 002-2023 – Templates for the Certificate of Entitlement to Tax Incentives (CETI)

Publishes Fiscal Incentives Review Board (FIRB) Advisory No. 002-2023 on the availability of the templates for the Certificate of Entitlement to Tax Incentives (CETI)

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2017-2023.pdf

Date effective: 6 February 2023

(NEW) RMC No. 18-2023 - Publishes the full text of FIRB Administrative Order No. 001-2023 prescribing the supplemental guidelines to operationalise FIRB Resolution No. 026-22, as further extended by FIRB Resolution No. 033-22

Publishes the full text of Fiscal Incentives Review Board (FIRB) Administrative Order No. 001-2023 prescribing the supplemental guidelines to facilitate and allow a seamless and orderly operationalisation of registration of existing Registered Business Enterprises (RBEs) in the Information Technology – Business Process Management (IT-BPM) sector with the Board of Investments (BOI) for purposes of adopting up to 100% work-from-home (WFH) arrangements as prescribed under FIRB Resolution No. 026-22, DTI MC No. 22-19 and FIRB Resolution No. 033-22.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2018-2023v2.pdf

Date effective: 6 February 2023

(NEW) RMC No. 19-2023 - Publishes the 4 January 2023 letter from the Food and Drug Administration of the DOH endorsing updates to the List of VAT-Exempt Medicines under RA No. 10963 (TRAIN Law) and RA No. 11534 (CREATE Act)

As clarified under Q&A No. 1 of Revenue Memorandum Circular No. 99-2021, the effectiveness of the VAT exemption of the covered medicines and medical devices under the CREATE Act shall take effect on the date of publication by the FDA of the updates to the said list.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2019-2023.pdf

Date effective: 6 February 2023

(NEW) RMC No. 24-2023 - Further clarifies the qualifications of Ecozone Logistics Service Enterprise (ELSE) to the incentives of VAT-Zero Rate on local purchases of goods and services exclusively and directly used in the registered project or activity

ELSE is a Registered Business Enterprise (RBE) supplying production-related raw materials and equipment that caters exclusively to the requirements of export manufacturing enterprises which are registered with the Philippine Economic Zone Authority (PEZA), Clark Development Corporation (CDC), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB) or other special economic zones/freeports outside the administration of PEZA. It provides critical support, particularly to export manufacturing companies with their requirements for logistics support, to facilitate their import and export shipments, sourcing of raw materials, inventory management, just-in-time deliveries, localisation, and process customisation.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2024-2023.pdf

Date effective: 17 February 2023

(NEW) RMC No. 31-2023 - Further clarifies imported goods that will no longer require the issuance of "Authority to Release Imported Goods" by the Bureau of Internal Revenue prior to release by the Bureau of Customs

The Authority to Release Imported Goods (ATRIG) shall no longer be secured from the BIR for the release of imported ingredients necessary for the manufacture of fertilizers and finished feeds. The certificate secured from the Bureau of Animal Industry (BAI) or from other concerned regulatory government agency, which is competent to certify that the ingredients being imported are "not fit for human consumption or the goods being imported cannot be used for the production of food for human consumption", shall be directly presented to the BOC to affect the release of the imported goods. It shall be the responsibility of the certifying government agencies to conduct their own validation of the declared goods to be released from the BOC and to submit to the BIR the list of importers that secured the said certification for tax audit purposes.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2031-2023.pdf

Date effective: 16 March 2023

(NEW) RMC No. 33-2023 - Clarifies the issuance and enforcement of Subpoena Duces Tecum

The guidelines and procedures set forth in Revenue Memorandum Order (RMO) No. 10-2013, as amended, shall also apply in the examination of any book, paper, record, or other data which may be relevant or material in evaluating tax compliance of taxpayers who are liable for tax or required to file a tax return. The procedures for the issuance and enforcement of SDTs, as prescribed under RMO No. 10-2013, as amended, must still be strictly observed by all concerned in compelling taxpayers to submit or otherwise present the required books, records and documents.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2033-2023.pdf

Date effective: 17 March 2023

(NEW) RMC No. 42-2023 - Publishes the 21 February 2023 letter from the Food and Drug Administration of the DOH endorsing updates to the List of VAT-Exempt Products under RA No. 10963 (TRAIN Law) and RA No. 11534 (CREATE Act)

The List now includes certain medicines for cancer, diabetes, kidney disease, mental illness, and tuberculosis, and corrects medicines for high cholesterol and hypertension. As clarified under Q&A No.1 of Revenue Memorandum Circular No. 99-2021, the effectiveness of the VAT exemption of the covered medicines and medical devices under the CREATE Act shall be on the date of publication by the FDA of the updates to the said list.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2042-2023.pdf

Date effective: 4 April 2023

(NEW) RMC No. 43-2023 - Further clarifies certain policies on the filing of appeal against Final Decision on Disputed Assessments (FDDA) pursuant to RR No, 12-99, as amended

In the case of filing of an appeal against the FDDA, the taxpayer shall furnish a copy of the said appeal to the Chief of the Assessment Division for regional cases, or the concerned Head Revenue Executive Assistant, in the case of taxpayers under the jurisdiction of the Large Taxpayers Service or investigated by the National Investigation Division under the Enforcement and Advocacy Service, within five days from date of filing with the Office of the Commissioner of Internal Revenue or the Court of Tax Appeals.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2043-2023.pdf

Date effective: 14 April 2023

(NEW) RMC No. 45-2023 - Publishes the full text of Fiscal Incentives Review Board Advisory No. 004-2023 clarifying the issues covering the transfer of registration with the Board of Investments (BOI) of Registered Business Enterprises (RBEs) in the Information Technology - Business Process Management (IT-BPM) Sector

The registration with the BOI will be an additional registration on top of the IT-BPM RBE's existing registration. The registration with BOI will be the basis for fiscal incentives, while the registration with the concerned or original IPA will be the basis for non-fiscal incentives and the corresponding terms and conditions of registration. As such, IT-BPM RBEs must continue to abide by the regulations set by both IPAs in order to maintain their fiscal and non-fiscal incentives.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2045-2023.pdf

Date effective: 19 April 2023

(NEW) RMC No. 46-2023 - Publishes the full text of Fiscal Incentives Review Board Advisory No. 006-2023 regarding clarifications on the supplemental guidelines on the registration with the Board of Investments (BOI) of Registered Business Enterprises (RBEs) in the Information Technology - Business Process Management (IT-BPM) Sector

Only capital equipment and other assets related to the IT-BPM project or activity registered with the BOI and are to be used to implement work-from-home (WFH) arrangements shall be covered by the Regulations. As an additional control measure, the related import permit/admission permit, or any other equivalent document to be issued by the concerned IPA for all new importations, must indicate an annotation that a TEI must be secured if the related assets will be moved out of the economic zone or freeport zone, for WFH purposes.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2046-2023.pdf

Date effective: 19 April 2023

(NEW) RMC No. 52-2023 - Clarifies the optional filing and payment of monthly VAT Returns (BIR Form No. 2550M) for VAT-registered persons

While the Tax Code now mandates the filing of VAT returns and payment of the corresponding VAT liabilities on a quarterly basis, VAT-registered persons may continue to file and pay the VAT on a monthly basis and still use BIR Form No. 2550M. The procedures and guidelines set forth in Revenue Regulations Nos. 16-2005 and 6-2014, Revenue Memorandum Circular No. 68-2005 and other related revenue issuances, regarding the use of BIR Form No. 2550M shall continue to apply.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2052-2023.pdf

Date effective: 10 May 2023

(NEW) RMC No. 53-2023 - Provides clarifications on the entitlement of economic zone developers and operators to the Value-Added Tax (VAT) zero-rating on local purchases of goods and services directly and exclusively used in the registered project or activity

This covers the development and operation of economic zones, and industrial parks within export or freeport zones with integrated facilities for export-oriented enterprises. Economic zones and industrial parks shall have infrastructure such as paved roads, a power system, water supply, drainage system, sewerage treatment facilities, pollution control systems, communication facilities, and other infrastructure/facilities needed for the operation of exporters located therein.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2053-2023.pdf

Date effective: 11 May 2023

(NEW) RMC No. 61-2023 - Prescribes procedures in the processing of a taxpayer's request for stamping of electronically filed ITRs/AITRs through eBIR Forms

Pursuant to Revenue Memorandum Circular No. 32-2023, “No Payment AITRs” shall be filed electronically through the eBIR Forms. Thus, taxpayers no longer need to file "No Payment AITRs" manually. Revenue District Offices (RDOs) may still manually stamp printed electronically filed AITRs for requesting taxpayers who can provide a letter request, with attached supporting documents, stating the need for their respective returns to be manually stamped "Received" by the BIR, as a requirement or proof of filing and payment of their taxes here in the Philippines (e.g., expatriates of multinational companies), or for whatever legal purpose it may serve.

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMC%20Digest/RMC%20No.%2061-2023.pdf

Date effective: 24 May 2023

(NEW) RMC No. 68-2023 - Further clarifies imported goods that will no longer require the issuance of "Authority to Release Imported Goods" by the Bureau of Internal Revenue prior to the release by the Bureau of Customs

This Circular is being issued to expand the coverage of non-issuance of "Authority to Release Imported Goods (ATRIG)” to imports of goods covered by the VAT exemption under Section 109(1)(B) of the National Internal Revenue Code of 1997, as amended, prior to the release of such imported goods by the Bureau of Customers (BOC).

https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2023%20RMCs/RMC%20No.%2068-2023.pdf

Date effective: 13 June 2023

Taxation of Philippine Offshore Gaming Operations (POGO)

Gross gaming revenues or receipts by POGO operator is subject to 5% percentage tax, in lieu of all other direct and indirect internal revenue and local taxes; and non-gaming revenue is subject to 25% regular corporate income tax for both Philippine-based POGO. Foreign-based POGO licensee is taxed at 25% CIT on its Philippine sourced income.

Other Regulatory Reports

Clarification on the preparation of Assessment Notices for a compromise penalty

Compromise penalties are amounts assessed in lieu of criminal prosecution for violation of relevant tax codes by taxpayers. Such a compromise penalty will be shown separately in relevant Assessment Notices.

Indirect Tax Compliance

Claim of input VAT on purchases or importation of capital goods

Amortisation of input VAT on purchases or importation of capital goods transactions has ceased, beginning 1 January 2022. However, unamortised/unutilised portions of input VAT on purchases or importation of goods  prior to 1 January 2022 shall be allowed to amortise the same as scheduled, until fully utilised.

Indirect Tax Compliance

Tax treatment of the International Passenger Service Charge at the point of sale of airline tickets

Terminal fees collected from passengers by domestic airline companies in the official receipt that will be issued by the airline company to the passenger. The official receipt should reflect separately the 12% VAT and VAT exempt components of the terminal fees.

Other Regulatory Reports

Tax treaty relief application or request for confirmation of withholding taxes, applicable or available under tax treaty

Taxpayers who were already issued with a Certificate of Entitlement (COE) for treaty or tax sparing purposes, wherein the tenor allows the ruling to be applied to certain subsequent or future income payments shall no longer file a Request for Confirmation (RFC) or Tax Treaty Relief Application (TTRA) every time an income of a similar nature is paid to the same non-resident.

Tax Compliance - Other Taxes

Clarification on tax-free exchanges of Properties

Reiteration of the transactions covered by the tax-free exchange of properties under Section 40(C )(2) of the Tax Code, as amended by the CREATE law; and the determination of the substituted basis of the properties received pursuant to Section 40(C)(5) of the Tax Code.

Singapore

South Korea

Tax loss carry forward period has been extended from 10 to 15 years

Starting from fiscal years that start on or after 1 January 2021 the tax loss carry forward period threshold will be extended from the current ten years to 15 years.

Tax Compliance - Other Taxes

New reporting requirements for foreign liaison offices

"New obligation to submit information regarding the status of a liaison office of a foreign company (eg, basic information of the liaison office, status of foreign headquarters and other domestic branches, among others).

Submission due date is 10 February of the following year.

Effective for submission of the status information relevant to taxable years beginning on or after 1 January 2022."

Indirect Tax Compliance

New obligation to submit transaction details by foreign companies supplying electronic services

"Simplified Value Added Tax (VAT) registrant maintains electronic service transaction details for five years after the due date of the final VAT return.

Simplified VAT registrant is required to submit a transaction statement within 60 days of receiving a request from the Commissioner of the National Tax Service (NTS).

Effective for the supply of electronic services on or after 1 July 2022."

Thailand

(NEW) Reduction of withholding tax (WHT) rate for payments made via e-WHT system for the period from 1 January 2023 to 31 December 2025 

On 13 March 2023, the Ministerial Regulation no. 389 B.E. 2566 on income tax was announced, prescribing the reduction of withholding tax rates on certain assessable income under the Thai Revenue Code paid in the period from 1 January 2023 to 31 December 2025 to 1% (from the statutory rates of 5%, 3% or 2%), provided that the payees remit WHT through the electronic withholding system (e-withholding tax).

Remark: The 1% withholding tax rate applies to e-withholding tax filing only. If the e-withholding tax system is not used, the usual withholding tax rate shall apply.

https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/mr389.pdf

Date effective: 10 March 2023

Automatic Exchange of Financial Account Information

This is an OECD development that aims to increase tax transparency and avoidance through the exchange of information on financial accounts between countries.  As of now, there are 117 countries including the ASEAN countries of Brunei, Malaysia, Indonesia and Singapore.

Currently, the Tax Authority (TRD) is in the process of preparing and announcing the law.  After passing the legislation, Thailand will begin exchanging financial account information with other countries from September 2023.

It is expected that the exchange of information within September 2023 will be the financial account information for the year 2022.

Taiwan

(NEW) CIT incentive

When a foreign profit seeking enterprise provides services in Taiwan, the payment of a service fee to the foreign company out of Taiwan is generally withheld at a 20% tax rate. When the foreign company within certain services/industry (international transportation, contracting construction projects, providing technical services or leasing machinery and equipment) submits an application to obtain approval of Article 25 of the Income Tax Law, the withholding rate will become 3%. Effective from 29 May  2023, the Ministry of Finance amended the application period from five years to 10 years, related to Article 25 of the Income Tax Law.

財政部發布修正「外國營利事業申請適用所得稅法第二十五條第一項規定計算所得額案件審查原則」，延長申請期限-財政部高雄國稅局全球資訊網 (ntbk.gov.tw)

Date effective: 29 May 2023

Vietnam

(NEW) Tax payment extension in 2023

Extension of deadlines for value-added tax (VAT) payment:

• VAT March to May and VAT Q1: extend six months
• VAT June and VAT Q2: extend five months
• VAT July: extend four months
• VAT August: extend three months.

Extension of deadlines for CIT payment: 

• CIT Q1 & Q2: Extend three months.

Extension of deadlines for land leasing payment:

• Extend six months for first 50% of land leasing in 2023.

Government to decree extension of tax payment deadlines for 2023 (baochinhphu.vn) 

Extension of deadlines for tax and land rental payment in 2023 (luatvietnam.vn)

Date effective: 14 April 2023 

Mandatory e-invoicing for all entities

From 1 July 2022, all active entities established under Vietnam Law have to convert to e-invoice and all new established entities under Vietnam Law have to register e-invoice. These e-invoice solution vendors must be approved from local authorities.

(NEW) China announced its accession to the Convention on the Cancellation of the Certification Requirements for Foreign Official Documents

At present, foreign companies who want to set up a business in China need to spend more time and money on notarisation and consular certification of business registration certificates. After joining the Convention, foreign companies only need to apply for Apostille, which will greatly reduce the related time and cost, helping to optimise the business environment. 

https://www.gov.cn/xinwen/2023-03/10/content_5745904.htm

Revision of the Foreign Trade Law

Foreign trade record filing with foreign trade department is cancelled. Foreign trade operators can directly process import and export declaration and clearance with Customs.

Date effective: 30 December 2022

http://www.gov.cn/xinwen/2022-12/31/content_5734366.htm

Several Measures for Further Encouraging the Establishment of R&D Centres with Foreign Investment

Four measures: supporting scientific and technological innovation; improving the convenience for research and development; encouraging the introduction of overseas talent; improving the intellectual property rights (IPR) protection.

Date effective: 11 January 2023

http://www.gov.cn/zhengce/content/2023-01/18/content_5737692.htm

China Securities Regulatory Commission (CSRC) promulgated relevant rules and regulations for the administration of overseas listing filing

In terms of improving the regulatory system, filing management will be implemented uniformly for the direct and indirect overseas listing activities of domestic enterprises. For the overseas listing of variable interest entity (VIE) structure enterprises, filing management will adhere to the principles of marketisation and the rule of law, and strengthen the coordination of supervision.

Date effective: 31 March 2023

http://www.csrc.gov.cn/csrc/c101954/c7124478/content.shtml

Asset Management Association of China (AMAC) promulgated new Measures for Registration and Filing of Private Investment Funds

The new Measures integrates and revises the old regulation, regulatory questions and answers, registration instructions and other fragmented rules issued since 2014 to standardise and systemise the regulatory rules.

Date effective: 1 May 2023

https://www.amac.org.cn/aboutassociation/gyxh_xhdt/xhdt_xhyw/202302/t20230224_14496.html

Guangzhou Nansha- Corporate Income Tax reduction policy announced.

Companies registered in three launch areas of Nansha District that are engaged in any of the 140 sectors, under eight main categories (high technology, information technology, advanced manufacturing, biomedicine, new energy & new materials, shipping logistics, modern service or finance), with economic substance in Nansha (having comprehensive management & control of operation, people, finance and assets in Nansha) are entitled to enjoy reduced Corporate Income Tax at 15% (compared with the standard rate of 25%).

Qualified hi-tech companies or technology-based SMEs in Nansha are also allowed to extend their carry-over of losses up to 13 years from the previous high of 10 years.

Coupled with preferential Individual Income Tax policies to attract talents, Nansha aims to build itself into a highland of technology innovation and portal of the opening-up of the Greater Bay Area.

Date effective: 1 January 2022 to 31 December 2026

Nansha's exclusive tax policy to benefit enterprises and boost development (chinadaily.com.cn).

財政部 稅務總局關于廣州南沙企業所得稅優惠政策的通知-廣州市南沙區人民政府門戶網站 (gzns.gov.cn). 

For FDI in travel agency and non-profit nursing homes, and administrative regulations see interim adjustments in these four cities (www.gov.cn).

Qualified foreign-invested travel agencies, established in Shanghai or Chongqing, will be allowed outbound travel operations excluding Taiwan. In addition, Tianjin, Hainan, and Chongqing should expand the market entry for foreign-invested non-profit nursing homes.

Date effective: 8 October 2022 to 8 April 2024

For administrative regulations, see interim adjustments in these four cities (www.gov.cn). 

(NEW) Holding virtual or hybrid general meetings 

Companies (Amendment) Ordinance 2023 has modernised the Companies Ordinance to allow Hong Kong companies to have a virtual or hybrid general meeting.

Companies Registry External Circular No. 1 / 2023 (cr.gov.hk)

Guidance Note – Good Practice on Holding Virtual or Hybrid General Meetings (cr.gov.hk)

Date effective: 28 April 2023 

Compliance/regulatory update: Companies ordinance

New inspection regime

Correspondence addresses, instead of the usual residential addresses (URAs), of directors, and partial identification numbers (IDNs), instead of full IDNs of directors and company secretaries and other relevant persons, are to be made available on the register for public inspection. URAs and full IDNs (“protected information”) will only be accessible by “specified persons” upon application. Similarly, companies may withhold from public inspection the protected information on the registers they have kept.

The new inspection regime is being implemented in three phases.

Phase 1 – 23 August 2021

Companies may replace the URAs of directors with their correspondence addresses and their full IDNs can be partially disclosed on the companies’ own register of directors.

Phase 2 – to begin on 24 October 2022 

For any new filing with the registry full IDNs and URAs of directors are still required to be reported to the registry.  However, the public can only review the correspondence addresses and partial IDNs of the directors in public searches.

Phase 3 – to begin on 27 December 2023

Relevant individuals or data subjects can make an application to the registry for the withholding of their historical full IDNs and URAs in public searches that are contained in documents registered with the registry before  phase 2 and replace such information with their correspondence addresses and partial IDNs.

Date effective:

Phase 1 – 23 August 2021

Phase 2 – 24 October 2022

Phase 3 – 27 December 2023

New Inspection Regime

The New Inspection Regime in the Companies Ordinance requires that companies withhold from public inspection the usual residential addresses (URAs) of directors and full identification numbers (IDNs) of directors and company secretaries as contained in the registers of directors and registers of company secretaries. This is part of a three-phase implementation. Phase 2 shall commence on 24 Oct 2022.

Starting from the commencement date, sensitive personal information on the Index of Directors on the Companies Register and newly delivered documents will be protected.  The Registry has revised 26 specified forms which pertain to the reporting of the sensitive personal information for use starting from the commencement date. For details of the implementation of Phase 2 of the New Inspection Regime, please refer to the Companies Registry External Circular No. 3 / 2022 issued on 19 August 2022.

Date effective: 19 August 2022

Companies Registry External Circular No. 3 / 2022

(NEW) Indonesian Government grants incentives for investors of Indonesia’s new capital city, Nusantara Capital City

In March 2023, President Joko Widodo signed and issued Government Regulation Number 12 of 2023 concerning the Granting of Business Licensing, Ease of Doing Business, and Investment Facilities for Business Players in the Nusantara Capital City. This regulation is effective as of 6 March 2023.

Pursuant to this regulation, the Indonesian Government will grant foreign ownership exceptions for sectors which conduct partnerships with micro, small, middle enterprises (MSMEs) and cooperatives. Further, there are 18 business sectors that may obtain business licensing facilities, which includes marine and fisheries, environment and forestry, energy and mineral resources, industry, trade, public works, and public housing. Ease of doing business on tax incentives, land rights status, and foreign workers are also being regulated in this regulation.

Up to May 2023, the Nusantara Capital City Authority has received more than 200 letters of intent from investors which are committed to investing in the new capital city.

https://indonesia.go.id//kategori/editorial/6931/sweet-incentives-for-ikn-investors?lang=2?lang=2

https://indonesia.go.id/kategori/editorial/7169/construction-and-investment-progress-in-the-ikn?lang=2

Date effective: 6 March 2023

Indonesia's Job Creation Law was revoked and replaced by Government Regulation in Liew of Job Creation Law  

In December 2022, the Indonesian Government issued Government Regulation in Liew of Law Number 2 of 2022 on Job Creation Law (Perppu Job Creation). This regulation took effect on 30 December 2022 and revokes Law Number 11 of 2020 on Job Creation dated 2 November 2020.

The content of this Perppu Job Creation itself is similar to the previous Job Creation Law with several substantive changes mentioned on halal certification, employment, taxation, and water resources. Additionally, Perppu Job Creation also expressly states that all licences, permits and certificates issued under the Job Creation Law continue to be valid until their respective expiry dates, if any.

Indonesia.go.id - Job Creation Law Creates Investment Climate Certitude

Date effective: 30 December 2022

Indonesia's New Personal Data Protection Law (Law No. 27 of 2022 on Personal Data Protection) (PDP Law).

Prior to the PDP Law, personal data protection in Indonesia was regulated under  the Minister of Communication and Informatics Regulation No. 20 of 2016 regarding Personal Data Protection in Electronic Systems, dated 1 December 2016 (MOCI Regulation 20/2016), and Government Regulation No. 71 of 2019 regarding Implementation of Electronic Systems and Transactions, dated 10 October, 2019 (GR 71/2019).

The scope of these regulations was limited to personal data protection in electronic systems. The PDP Law will be the first comprehensive law in Indonesia to govern personal data protection in both electronic systems and non-electronic systems.

Indonesia's Personal Data Protection Law: Key Compliance Requirements (aseanbriefing.com). 

Amendments to The Civil and Commercial Code

• Reduction of promoters and/or shareholders from three to two persons.
• The requirement of publication in a local newspaper of the shareholders’ invitation will no longer be mandatory, except in cases where share certificates are issued to bearers that the newspaper publication, either physical or electronic, is still required.

dbd_law_civil_23_2565.pdf

Thailand Civil and Commercial Code Amendment No.23

As of 2 February 2023, an Act to amend the Thailand Civil and Commercial Code (No. 23) B.E. 2565 will allow corporations to incorporate and operate with a minimum of just two shareholders.

A brief summary of some of the major changes that Amendment No. 23 will pass:

• Revised TCCC Section 1907 reducing the number of promoters and shareholders required to establish a company from three to two people.
• Revised TCCC Section 1178 reducing number of shareholders/proxies required to attend AGM to a minimum of two and holding no less than one quarter of total share capital.
• Revised TCCC Section 1162/1 for Board of Directors e-meetings, by communicating with technology (unless otherwise required by the Regulations).
• Revised TCCC Article 1178, which now sets a one-month deadline for dividend payments starting on the date of the AGM.
• Revised TCCC Part 9 to clarify the rules and procedures governing mergers, acquisitions, and amalgamation of Limited Companies. 

Penalties for administrative violations against regulations on environmental protection

Decree No. 45/2022/ND-CP fully supplements sanctions for new regulations in the Law on Environmental Protection in 2020 regarding:

1. Environmental license, environmental registration;
2. Violations against regulations on trial operation of waste treatment works after obtaining environmental permits;
3. Violations against regulations on environmental protection in the management of persistent pollutants and raw materials, fuels, materials, products and goods containing persistent pollutants;
4. Violation of labelling and disclosure of information containing persistent pollutants;
5. Violations against disclosing environmental quality monitoring information, publicising environmental information, providing and updating information and data for the environmental database;
6. Violations against regulations on responsibilities for recycling, collection and treatment of waste by producing and/or importing organisations and individuals;
7. Violation against regulations on mitigation of greenhouse gas emissions and protection of the ozone layer;
8. Violations against regulations on environmental protection of natural heritage;
9. Violation of using natural ecosystem services.

Moreover, The sanction level in Decree No. 45/2022/ND-CP has been adjusted, specifically, increasing the level of punishment for the group of acts of intentionally sneaking, and discharging untreated waste into the environment, causing environmental pollution such as: construction, installation of equipment, pipelines or other waste lines to discharge untreated waste into the environment, no construction or installation of environmental protection works, etc. to the maximum extent (1 billion VND for individuals; 2 billion for organisations)

Date effective: 25 August 2022

(NEW) End-of-year (EOFY) 2022-23

The end of the financial year is getting closer and the HRP AU Team has reached out to clients to help us finalise all the payroll reporting, such as Fringe Benefit Tax and Payroll Tax.

End-of-year finalisation through STP | Australian Taxation Office (ato.gov.au)

(NEW) Paid Parental Leave changes

From 1 July 2023, the Paid Parental Leave scheme is changing.

This change affects people with children born or adopted on or after this date.

Parental leave pay will increase from 90 days (18 weeks) to 100 days (20 weeks) and can be shared by the birth mother or initial primary carer to dads and partners.

Paid Parental Leave scheme for employers - Services Australia

Date effective: 1 July 2023

(NEW) Changes to Supported Employment Services Award

This means minimum wages for employees affected by the Supported Employment Services Award changes will also increase from 1 July 2023.

For more information about the Commission’s decision, visit: Get set for a minimum wage increase - Fair Work Ombudsman

Date effective: 1 July 2023 

Minimum Wages

Following the Annual Wage Review 2021-22, the Fair Work Commission (the Commission) announced:

• an increase to the National Minimum Wage of $40 per week, which amounts to an increase of 5.2%;
• an increase to award minimum wages of 4.6%, which is subject to a minimum increase for adult award classifications of $40 per week and based on a 38-hour week for a full-time employee.

Other award wages, including junior, apprentice and supported wages that are based on adult minimum wages, get a proportionate increase.

The increases to award minimum wages in 10 aviation, tourism and hospitality sector awards start from the first pay period on or after 1 October 2022.

The increases to the National Minimum Wage and to award minimum wages in all other awards started on the first pay period on or after 1 July 2022.

Daylight Saving

Daylight saving started at 2am on Sunday 2 October in:

• Australian Capital Territory
• New South Wales
• South Australia
• Tasmania
• Victoria

This means that clocks go forward one hour.

Daylight saving doesn't apply in:

• Northern Territory
• Queensland
• Western Australia

What employees get if they work overnight

Employees should check their award, enterprise agreement or employment contract to see if there is anything about daylight saving in it. If it doesn’t say anything, all employees who work overnight when daylight saving starts are paid according to the clock (follow the clock).

Daylight saving starts by rolling the clock forward to 3am. This means that employees who work an overnight shift work one hour less but are still paid for the full shift.

When daylight saving ends and the clock is rolled back an hour, employees will work for an extra hour but are paid according to the clock.

2023 Public Holidays

This is the list of 2023 public holidays for each state and territory in Australia. Public holidays can be different depending on the state or territory you're in.

https://www.fairwork.gov.au/employment-conditions/public-holidays

(NEW) Minimum wages

The government has announced the minimum wage standard as of 1 April 2023 for different cities in China.

全國各地區最低工資標準情況（截至2023年4月1日） (mohrss.gov.cn)

Date effective: 1 April 2023

(NEW) High temperature allowance of Tianjin

Announced by Tianjin Social Security Bureau, the high temperature allowance is 12% of last year’s average daily salary per day and it shall be paid on a monthly basis.

Given that last year’s annual salary of Tianjin was RMB89,736.00, the high temperature allowance=89,736.00/12/21.75*12%=41/day.

市人社局關于實行高溫津貼制度有關事項的通知_最新文件_政務公開 (tj.gov.cn)

Date effective: 1 June 2023

(NEW) Regulatory updates in Macau

Starting from 26 May 2023, if a Macau female employee gives birth or she is in a situation mentioned in paragraphs 5 and 6 of Article 54 of Law No. 7/2008, the employer in Macau shall no longer be entitled to the relevant exemption and must pay a total of 70 days of maternity leave pay to the female employee with whom there is a labour relationship for more than one year.

Law No. 8/2020 (Amendments to Law No. 7/2008 "Labor Relations Law"), which came into effect on 26 May 2020, increased the maternity leave period from 56 to 70 days. Transitional regulations regarding the maternity leave pay were set whereby employers shall be exempt from paying part of the maternity leave pay during the three-year transitional period, and the subsidy shall be provided by the Macao SAR Government to eligible Macau female employees. The upper limit of the subsidy is 14 days of basic remuneration.

For eligible Macau female employees who gave birth before the expiry of the maternity leave pay measure mentioned above (i.e., on or before 25 May 2023), or who were in a situation mentioned in paragraphs 5 and 6 of Article 54 of Law No. 7/2008, they can still apply to the Macau Social Security Fund for a maternity leave pay subsidy within 120 days from the date of childbirth.

(Source from: Maternity Leave Pay Subsidy Measure (fss.gov.mo))

Date effective: 26 May 2023 

Announcement on individual income tax policies related to voluntary individual pension scheme

The preferential tax treatment for a Voluntary Individual Pension Scheme, which was effective from 1 January 2022, was announced on 3 November 2022.  An individual who contributes a Voluntary Individual Pension fund, up to the amount of RMB12,000 in a financial year, can enjoy a tax incentive on the contributed amount. The contributed voluntary individual pension fund is tax deductible against comprehensive income in the financial year. It can either be deducted by the withholding agent or reported under the annual Individual Income Tax (IIT) reconciliation filing before 30 June each year. Gain on disposal of investment earned by the voluntary individual pension shall be taxed at 3% and the tax payment shall be deferred until withdrawal of the fund.

財政部 稅務總局關于個人養老金有關個人所得稅政策的公告 (chinatax.gov.cn) 

(NEW) Abolition of Offsetting Arrangement officially announced with effective date from 1 May 2025

The main legislation on the Abolition of Offsetting Arrangement was passed in June 2022. On 28 April 2023, the chief executive formally announced that the effective date will start from 1 May 2025.

For further details, please visit the Labour Department Website.

Useful Information & Publications: https://www.op.labour.gov.hk/en/publication.html

Frequently Asked Questions: https://www.op.labour.gov.hk/en/faq.html

Date effective: 1 May 2025

(NEW) Statutory Benefits – Updates in Employment Ordinance

Repeal of provisions relating to COVID-19 vaccination under Employment Ordinance (EO) as of 16 June 2023.

Ancillary to the government's anti-epidemic measures, the vaccination provisions have been added to the EO pursuant to the Employment (Amendment) Ordinance 2022, which took effect on 17 June 2022. The relevant provisions stipulate that the dismissal of an employee due to non-compliance with a legitimate COVID-19 vaccination request made by his/her employer is not considered as an unreasonable dismissal. With the government's removal of the statutory Vaccine Pass requirement earlier, and Hong Kong society resuming normalcy in full, having consulted the Health Bureau and the Department of Health, the government will repeal the vaccination provisions under the EO on 16 June 2023 after LegCo's full negative vetting period has run its course.

(Source from: Repeal of provisions relating to COVID-19 vaccination under Employment Ordinance (info.gov.hk))

Date effective: 16 June 2023

(NEW) Health and safety advice from Labour Department

In the “Guidance Notes on Prevention of Heat Stroke at Work and Heat Stress at Work Warning” introduced by the Labour Department (LD),  employers and employees are reminded to take appropriate measures to prevent heat stroke when working in hot weather or hot environments.

This assists employers in fulfilling their responsibilities and understanding the risk factors that should be considered when conducting heat stress risk assessments, and the recommended control measures for addressing various risk factors.

For details of the Heat Stress at Work Warning and the relevant guidance notes, please refer to the LD's webpage (www.labour.gov.hk/eng/news/prevention_of_heat_stroke_at_work.htm)

Date effective: 15 May 2023

(NEW) General Holidays for 2024 published

General holidays for 2024 is gazetted for public information.

(Source from: https://www.gov.hk/en/about/abouthk/holiday/2024.htm)

Date effective: 1 January 2024

Statutory Benefits

Revised Statutory Minimum Wage (SMW) rate with effect from 1 May 2023

The Legislative Council has approved the subsidiary legislation on the revised SMW rate. The SMW rate is raised to $40 per hour with effect from 1 May 2023.

The monthly monetary cap on the requirement of employers recording the total number of hours worked by employees is also revised to $16,300 with effect from 1 May 2023.

Source from: https://www.gld.gov.hk/egazette/pdf/20232702/es2202327023.pdf

Updates on COVID-19: Sickness allowance under the Employment Ordinance (EO)

Starting from 30 January 2023, the health authority of the Hong Kong SAR will no longer issue isolation orders to COVID-19 infected persons and will cancel the active isolation orders issued by that time.

When isolation orders are no longer being issued by the health authority, for the employees whose health condition is unfit for work due to sickness, employers should advise those employees to seek medical attention and take sick leave for rest.

If the employee does not make a request for taking sick leave, he/she can work as usual.

If an employee has contracted COVID-19 and is granted with a medical certificate, his/her employer should pay the eligible employee sickness allowance in accordance with the EO.

Such an arrangement is the same with the situation where an employee falls sick with another disease.

An employee who is absent from work by reason of his/her COVID-19 infection is entitled to sickness allowance under the EO if the following conditions are fulfilled:

1. the employee is employed under a continuous contract (i.e. an employee who has been employed continuously by the same employer for four weeks or more, with at least 18 hours worked in each week);
2. the sick leave taken is not less than four consecutive days;
3. the employee has accumulated a sufficient number of paid sickness days; and
4. the employee can produce an appropriate medical certificate.

According to the EO, if the period of paid annual leave commences before the period of sickness days, that sickness period should count as paid annual leave. For other situations (i.e. when the period of sickness days commences before the period of paid annual leave or when the commencement of the period of sickness days is the same as the period of paid annual leave), that sickness period should count as sick leave.

When an employee is unable to return to Hong Kong to attend work after his/her scheduled holidays due to his/her sickness, unless he/she can present a medical certificate issued by a Hong Kong registered medical practitioner, a registered Chinese medicine practitioner or a registered dentist specifying the number of days and the nature of the sickness of which the employee is unfit for work and can meet other relevant criteria (a to d above), the employee concerned will not be entitled to sickness allowance under the EO.

When an employee is absent from work due to his/her compliance with any anti-epidemic requirement enforced by overseas authorities, the employee concerned will not be entitled to sickness allowance under the EO.

If an employer arranges his/her employee for a business trip outside Hong Kong, he/she should work out a mutually acceptable arrangement with the employee prior to the trip.

Source from: https://www.labour.gov.hk/common/public/pdf/wcp/EAO2022_FAQ_ENG.pdf

Taxation

Awareness about Year End Tax Filing

Starting from April 2019, the IRD IR56B Software is no longer available for employers to download.

Instead, a web-based IR56 Forms Preparation Tool (“Preparation Tool”), which does not require installation and is more user-friendly, has been provided to employers to prepare the electronic records of forms IR56B and IR56F.

Please note that IRD will CEASE to accept the use of IRD IR56B Software for preparation and submission of the data file of Annual Form IR56Bs starting from 1 April 2023.

Employers are required to change to use the IR56 Forms Preparation Tool OR enhance their program in accordance with the new requirements specification and submit the testing file through the e-application of electronic services for the Department’s approval as soon as possible.

Source: https://www.ird.gov.hk/eng/ese/erc.htm#a03

Inland Revenue Department alerts public to fraudulent emails

The Inland Revenue Department alerted members of the public to fraudulent emails purportedly issued by the department, which invite recipients to claim tax refunds.

Each email provides a hyperlink to a website which seeks to obtain the recipient's personal particulars and credit card information. Members of the public are reminded not to open any suspicious email.

Source from: https://www.ird.gov.hk/eng/ppr/archives/23030701.htm

Pension

Abolition of Offsetting Arrangement (to be implemented in 2025):

The Legislative Council passed the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 on 9 June 2022 to abolish the use of the accrued benefits of employers' mandatory contributions under the Mandatory Provident Fund (MPF) System to offset severance payments (SP) and long service payments (LSP) (the offsetting arrangement).

The Government will implement the abolition of the offsetting arrangement in tandem with the full implementation of the eMPF Platform of the Mandatory Provident Fund Schemes Authority, which is expected to be in 2025.

More details and Source from: https://www.labour.gov.hk/eng/news/aoa.htm

Statutory holiday enhancement by 2030

From 2022 to 2030, the number of statutory holidays as per the Hong Kong Employment Ordinance will increase from 12 days to 17 progressively. 

The five new statutory holidays are: 

• The birthday of Buddha, the eighth day of the fourth lunar month (starting from 1 January 2022); 
• The first weekday after Christmas Day (starting from 1 January 2024); 
• Easter Monday (starting from 1 January 2026); 
• Good Friday (starting from 1 January 2028); and
• The day after Good Friday (starting from 1 January 2030). 

In 2030, the number of statutory holidays and the number of public holidays (also known as bank holidays) will be aligned.

(Reference source: https://www.labour.gov.hk/eng/news/EAO2021.htm)

Mandatory Provident Fund (MPF) offset arrangement

With effect from a date to be decided (expected to be in 2025), an employer cannot to continue to use its Mandatory Provident Fund (MPF) mandatory contribution to offset long service pay (LSP) or severance pay (SP) earned after the effective date. Nevertheless, it is still be possible for an employer to use its MPF mandatory contribution to offset LSP or SP earned before the effective date. Along with the abolition of the offset arrangement, the current approach is that the government will introduce a mandatory system where an employer is obligated to set up a designated savings account (DSA) and then contribute 1 per cent of their employees’ relevant income. When the value of a DSA reaches 15 per cent of its annual payroll, it does not need to make further contributions. The DSA balance is applied in payment of the employer’s LSP or SP obligations. On the other side, the government will subsidise a certain percentage of LSP or SP after the effective date, which will reduce during the years after the effective date. 

(Reference source: https://www.labour.gov.hk/eng/labour/offsetting.htm)

Electronic filing of employer’s return

Employers may use self-developed software to prepare and upload/submit additional, replacement or supplementary IR56B data files to the department.

Employers who have obtained approval under the previous requirements specification can continue to submit the original IR56B data files. However, the department encourages employers to enhance their program as soon as possible to enjoy the convenience of the extended coverage by the new requirements specification for IR56B.

The employer’s return e-filing services (ER e-filing services) have the following two modes of submission:

1. Online mode (login to the eTAX/iAM Smart+ account by an authorised signer is required) 
An aAuthorised signer* is required to sign and submit the employer’s return/notification through their eTAX account, MyGovHK password, recognised personal digital certificate or iAM Smart+ account (with digital signing function).

2. Mixed mode (login to the eTAX/iAM Smart+ account is not required)
 This is a new mode of submission introduced in November 2018 that allows employers to designate a person to upload a data file containing the IR56 records via the ER e-filing services without the login of the aAuthorised signer’s eTAX/ iAM Smart+ account.  

After uploading the data file, a control list (with transaction reference number and QR code) will be generated by the system.  The aAuthorised signer is required to sign and submit the paper control list to complete the submission process.
* An aAuthorised signer refers to the person in one of the following capacities:

• Proprietor for a sole proprietorship business
• Precedent partner for a partnership business
• Director, company secretary, manager, investment manager (only applicable to a corporation that is an open-ended fund company), provisional liquidator/liquidator for a corporation
• Principal officer for a body of persons

(Reference source: https://www.ird.gov.hk/eng/tax/err.htm)

Health and safety advice from the Labour Department

"Code of Practice in Times of Typhoons and Rainstorms" published by the Labour Department (LD).
The LD reminds employers to make prior work arrangements for staff during and after rainstorms as early as possible, including arrangements on reporting for duty, release from work, resumption of work and work from home (if applicable). These arrangements can ensure the safety of employees and smooth operation of organisations, and are conducive to maintaining good labour-management relations.

There is a booklet, "Code of Practice in Times of Typhoons and Rainstorms", published by LD, which outlines the major principles, the framework, the reference guidelines and information on relevant legislation on making work arrangements for the reference of employers and employees.

Source: www.labour.gov.hk/eng/public/wcp/Rainstorm.pdf

(NEW) Amendment in leave encashment exemption limit

Income tax exemption limit on leave encashment payment has been increased from Rs3,00,000 to Rs25,00,000

Leave encashment gazatte

Date effective: 1 April 2023

(NEW) Taxable Income slabs have been changed in new tax regime

Key pointers of budget changes and the same was implemented in the payroll system from the second week of April 2023:

• Individuals who want to claim available exemptions/deductions benefit of income tax, need to opt for the old tax regime.
• Deductions under Chapter VIA and other investment benefit are not allowed in the new tax regime, except NPS Employer contribution (u/s 80CCD(2)) & Standard Deduction benefit.
• Option to opt for the old and new tax regime will remain unchanged, however, the new tax regime will be a default regime.
• Standard deduction benefit up to INR50,000 is now available in the new tax regime, effective April 2023.
• Under the old tax regime there is no change in Tax slabs, 87A Rebate and Surcharge education will be in-line with the previous year’s rates. 
• Under the new tax regime, the highest surcharge will be 25%, and no change in the cess rate.
• 87A Rebate - Individuals who earn taxable income up to INR5,00,000 continue to be exempt from tax liability under the old tax regime.
• 87A Rebate - Individuals who earn taxable income up to INR7,00,000 will be exempt from tax liability under the new tax regime, as per the amendment in the Finance Bill of 2023, applicable from April 2023 (FY 2023-24).
• HRA Benefits can be claimed in the old tax regime, but are not available in the new regime.

Supreme Court Upholds Employees’ Pension (Amendment) Scheme 2014; Extends Cut-Off Date for Present Members

 The summary judgment of The Honourable Supreme Court verdict on 4 November 2022 is given below:

At present, the EPFO accepts contributions to EPS at 8.33% of salary with a ceiling at Rs. 15000/- only and the pension is also given on the basis of Rs. 15000/- per month. The ceiling was earlier set at Rs. 6500/-. As per the PF act amendment of 1 September 2014, the employees who joined after 1 September 2014,( first time under PF membership or closed their Pension Account) and whose Basic wages is above Rs.15000/- shall not be part of  the Pension Scheme and the entire contribution  shall be contributed under the EPF A/c No.1 (for both the employer and employee). However, the employees who are already covered under EPF/EPS scheme pension shall be continued.

What is Voluntary Higher EPS?

Employees who were existing EPS members as on 1 September 2014 can contribute up to 8.33%  of their 'actual' salaries as against 8.33%  of the pensionable salary capped at Rs 15,000 a month towards a pension. This would essentially imply higher annuity after retirement. The court has given the option of a pension on higher earnings to subscribers of exempted provident fund trusts also.

IMPORTANT POINTS OF THE JUDGEMENT is summarised below.

1. Supreme Court has given eight weeks’ time for the EPFO to make the directives as per the judgment, hence we will have to wait for the EPFO notification w.r.t the process to be followed.
2. Existing pension employees have been given a chance to come within the scheme.
3. Supreme Court holds the requirement of the members to contribute 1.16% on the salary exceeding Rs.15,000/- to be invalid. But this part of the judgment is to be kept in suspension for six months.
4. Employees who retired prior to 1 September 2014 without exercising an option will not be entitled to the benefit of the judgment.
5. All Pensioners who retired before the 2014 Amendment after exercising their option to receive a higher pension, but the same being rejected or not processed, will be entitled to receive a higher pension.
6. Employees who could not exercise the option, due to the cut-off date, shall be given a further chance to exercise the option. They shall be given a further chance in an extension of four months.
7. Members who did not exercise the option, as it was before 1 September 2014, shall be eligible to exercise the option under Section 11(4).
8. For the six months or till such time any amendment is made, whichever is earlier, the employees' contribution shall be as a stop gap measure and the said sum shall be adjustable on the basis of alteration to the scheme that may be made.
9. The Court has granted Moratorium on quashing of the 2014 Amendment till the next six months, to enable EPFO to do the necessary Computation and request a refund of the Provident Fund amount from the Pensioners who seek an enhanced pension. 

• Update of Payroll Tool, with latest Budgetary Changes, as applicable for FY 2022-23.
• Investment Declaration Portal was enabled across all TMF Clients in April 2022.
• Flexi Benefit Declaration Portal was enabled for applicable clients.
• Multiple Helpdesk conducted basis requirement in virtual and physical mode.
• Employee Query Management with a target to provide an end-to-end solution.
• Kick start issuance of year-end Tax Certificate (FORM16).

The foreign worker insurance requirement

Employers that hire foreign workers to work in Indonesia for less than six months must now register foreign workers in an insurance program that at least guarantees protection for work accidents. This requirement is governed under Article 8 of Government Regulation (GR) No. 34 of 2021 regarding the Employment of Foreign Workers.

The foreign worker insurance requirement is further regulated by Ministry of Manpower (MOM) Decree No. 146 of 2021 regarding Insurance Program for Foreign Workers Working Less Than Six Months and Directorate General of Manpower Placement and Expansion of Employment Opportunities Decree No. 3/144/PK.04/V/2022 regarding the Implementation of Insurance Program for Foreign Workers Working Less Than Six Months.

For employers who have not yet applied for a Foreign Workers Employment Plan (RPTKA), beginning 1 September 2022, the RPTKA application will require employers to submit the (Electronic) Policy Certificate from ASTAKA, and insurance programs for foreign workers who work in Indonesia for less than six months provided by a selected insurance provider.

And for employers with an existing RPTKA, Article 39 of GR 34 stipulates that if such employers fail to register their foreign workers in an insurance program, they will be subject to an administrative sanction in the form of temporary suspension of the RPTKA.

https://astaka.id/regulasi

New Tax ID (NPWP) format

1. The new format of Taxpayers ID is a 16 Digit number whereby the current NPWP has only 15 digits effective by 14 July 2022.

2. For Personal Tax ID, The National ID (or NIK/KTP) which has 16 Digits will be the new Taxpayers ID (art 2.1.a):

a. Effective January 2024, National Resident Individual Taxpayers must use NIK/KTP as the new Taxpayers ID. (art. 11.1)

• National Resident Individual Taxpayers who have NIK/KTP must update their own data in theTax Office system (DJPOnline) to validate their NIK/KTP (art. 3)
• Once validated, NIK/KTP will be the new Taxpayer ID
• The current NPWP with 15 Digits is still valid up until December 2023, hence both validated NIK/KTP and NPWP can be used and valid (art. 6.1). Additionally, our team experience is that both validated NIK/KTP and existing NPWP can be used to log-in to DJPonline.

b. For Non-Resident Individual Taxpayers (commonly the expats), one 0 (zero) digit will be added in front of the current NPWP. In the event that the Tax System is still not able to accommodate the 16 digits format, then The Tax system will require the original NPWP without the additional digit, 0 (zero) (art. 7)

• -Non-Resident Individual Taxpayers who have NPWP must update their own data in Tax Office system (DJPOnline) (art. 7.3).

Ministry of Finance Regulation no 112/PMK 03/2022: https://jdih.kemenkeu.go.id/download/a7c0b23a-a5ac-482f-a89e-94a3d7eff74d/112~PMK.03~2022Per.pdf.

Overtime Premium Revision

Starting in April 2023, the overtime premium rate for overtime work of 60 hours or more per month will change to 50%. This applied only to large companies, but the grace period for application will end.  It will now be applicable to small and medium enterprises. 

Model Childcare and Family Care Rule Reformed

• Father’s leave after birth is newly created.
• It becomes easier to obtain these leaves in divided terms. 

The following is a brief explanation about the recent change in the retirement allowance income tax calculation, which is also applicable to severance and paid time off (PTO) payments.  The National Tax Agency (NTA) website only provides a Japanese explanation.

https://www.nta.go.jp/publication/pamph/gensen/0021009-037_01.pdf

Tax on retirement income

A beneficial income tax calculation is applied to retirement allowance income. This is paid separately from employment income, ie, base salary, allowances, commuting allowance, bonuses etc. The retirement allowance income tax calculation is also applied to severance payments and unused PTO (if paid at the time of separation from the company). 

Tax calculation of retirement income is calculated by applying the income tax rate table determining the retirement income amount; (income amount – retirement income deduction amount (0.4m yen x years of service) × 50 per cent as an exclusion). From January 2022, retirement income is considered “short-term retirement allowance” if the length of service is less than five years. In this case, the 50 per cent exclusion will not apply to the portion in excess of 3m yen. If the length of service is more than five years, the formula shown and full exclusion would be applied. In addition, the employee needs to submit the retirement allowance payment tax to the company. 

Employees Provident Fund

Following the latest information on the EPF board, the 9% EPF Employee rate ended in June 2022. The rate reverted to 11%, effective on July 2022 salary/wages.

Source: https://www.kwsp.gov.my/

Perkeso (Social Security Organisation)

In accordance with the announcement by PERKESO (SOCSO), there is a new monthly salary ceiling limit of RM5,000 from the previous ceiling of RM4,000 for SOCSO and EIS contribution purposes.

Source: https://www.perkeso.gov.my/

This came into effect on 1 September 2022 and will be reflected accordingly in the September salary onwards.

(NEW) Changes to payroll effective 1 April 2023

There have been multiple changes to minimum wage, student loan and Accident Compensation Corporation (ACC) levies in New Zealand from 1 April 2023.

Please see our detailed document for changes in New Zealand: NZ Tax Changes 2023_2024

Date effective: 1 April 2023

Parental Leave changes

Parental leave payments will increase by 6.33% from Friday 1 July 2022, to match the rise in the average weekly earnings.

The maximum weekly rate for eligible employees and self-employed parents will increase from $621.76 to $661.12 gross per week.

Under the Parental Leave and Employment Protection Act 1987, eligible parents are entitled to payments equal to their normal pay, up to the current maximum rate. The maximum rate is adjusted annually to account for any increase in average weekly earnings.

Source: https://www.employment.govt.nz/about/news-and-updates/parental-leave-payments-to-increase/

(NEW) Attendance incentives tied to usage of sick leave no longer seen as fair or reasonable practice from 1 January 2023

From 1 January 2023, companies with incentive schemes that consider sick leave utilisation will face enforcement action. Any form of measures imposed on or incentivising employees for not taking any statutory sick leave for any period of time or penalising them for taking sick leave is deemed unfair and unreasonable. Employees who are sick should not be discouraged from taking sick leave through offering them incentives.

Examples of prohibited schemes include:

• Provide incentive to employees for not taking any statutory paid sick leave for any period of time.
• Offer the encashment of unused statutory paid sick leave.
• Use the number of paid sick leave days taken as “demerit points” during appraisal and promotion.

https://www.mom.gov.sg/faq/sick-leave/can-incentive-schemes-be-tied-to-statutory-sick-leave-utilisation

Date effective: 1 January 2023

(NEW) New rules to enhance safety of worker transportation

From 1 January 2023 onwards, new measures have been rolled out to improve the well-being of workers ferried in lorries which include rain covers, rest for the driver and speed limiters.

https://www.lta.gov.sg/content/ltagov/en/newsroom/2022/3/news-releases/additional-measures-to-enhance-safety-of-worker-transportation.html

Date effective: 1 January 2023

(NEW) New Occupational Progressive Wages (OPW)

From 1 March 2023, Singaporean and PR administrators and drivers could expect a rise in minimum wages. Employers must meet the new OPW requirements in order to renew existing work passes or apply for new work passes of foreign employees.

https://www.mom.gov.sg/employment-practices/progressive-wage-model/occupational-pws-for-administrators-and-drivers

Date effective: 1 March 2023

(NEW) Higher monthly salary ceiling for CPF contributions 

Starting from 1 September 2023, the CPF monthly salary ceiling will be gradually raised from $6,000 to $8,000 by 2026. However, there is no change to the annual salary ceiling of $102,000.

There is no impact for employees earning below $6,000 per month.

The CPF annual limit will also remain at $37,740 (37% * $102,000)

https://www.cpf.gov.sg/employer/faq/employer-obligations/what-payments-attract-cpf-contributions/what-are-the-changes-to-the-cpf-salary-ceilings-from-1-sep-2023

Date effective: 1 September 2023

(NEW) Enhanced Parental Leave & Unpaid Infant Care Leave

Government Paid Paternity Leave (GPPL) for fathers will double from two to four weeks for Singaporean children born from 1 January 2024. The extra two weeks will be given on a voluntary basis by the employer. Employers who do so will be reimbursed by the government.

Unpaid Infant Care Leave (UICL) for the Singaporean child’s first two years will also double from six to 12 days.

https://www.cpf.gov.sg/member/infohub/educational-resources/baby-bonus-benefits-and-support-for-new-parents

Date effective: 1 January 2024

(NEW) Increase in CPF contributions

Effective 1 January 2024, the CPF contribution rates have been increased for employees aged above 55 up to 70, to strengthen their retirement adequacy.

The changes to the CPF contribution rates from 1 January 2024 are shown below:

https://www.cpf.gov.sg/employer/faq/employer-obligations/how-much-cpf-contributions-to-pay/what-are-the-changes-to-rates-for-senior-workers-from-1-jan-2024

Date effective: 1 January 2024

(NEW) CPF Contribution for Platform Workers

To strengthen the retirement adequacy of Platform Workers (PW), CPF contributions will be made mandatory for Platform Companies and PWs below 30 years old in 2024.

This change will be implemented over five years from the second half of 2024.

PWs 30 years old and above can opt in to make CPF contributions.

https://www.cpf.gov.sg/member/infohub/news/media-news/gig-workers-get-basic-protection

Date effective: Late 2024

(NEW) Higher qualifying salaries - changes to S PASS qualifying salaries

Date effective: September 2023

(NEW) Changes to Employment Pass (EP) eligibility

From 1 September 2023, in addition to meeting the minimum qualifying salary, EP candidates must also pass a points-based Complementarity Assessment Framework (COMPASS).

The application is scored on four foundational criteria. Applications earn points if they meet or exceed expectations.

To pass COMPASS (Complementary Assessment Framework): 40 points is required.

https://www.mom.gov.sg/passes-and-permits/employment-pass/upcoming-changes-to-employment-pass-eligibility

Date effective: September 2023

Incentive schemes tied to statutory medical leave no longer allowed

With effect from 1 January 2023, companies are no longer allowed to offer incentives to employees tied to medical leave. Companies doing so may face enforcement action. Prohibited schemes include encashment of utilised medical leave, bonus/allowances offered to employees who do not apply for medical leave, and employees given demerit points for utilising sick leave.

https://www.mom.gov.sg/faq/sick-leave/can-incentive-schemes-be-tied-to-statutory-sick-leave-utilisation.

Increase in Central Provident Fund Contribution Rates

With effect from 1 January 2023, the CPF contribution rates for employees in the age group of 55 to 70 will be increased by a total of 1.5 to 2%, to strengthen their retirement adequacy.

CPFB | Increase in CPF Contribution Rates from 1 January 2023.

New Work Pass to be Launched

To attract top global talents, the new Overseas Network and Expertise Pass (with a validity of five years) will be launched on 1 January 2023. Among the criteria is a fixed monthly income of at least S$30,000.

Singapore to launch new work pass for top talent in all sectors from 2023 - CNA (channelnewsasia.com).

Changes to Employment Pass eligibility

With effect from 1 September 2023, candidates must pass a two-stage eligibility framework, i.e. a raised qualifying salary and COMPASS, a new points-based criteria assessment.

The minimum qualifying salary for new applicants will be raised to S$5,000 for non-financial services sectors and S$5,500 for the financial services sector.

The minimum points to pass COMPASS will be 40 out of a potential maximum of 100.

Overview of changes to Employment Pa.ss eligibility (mom.gov.sg).

Automated Make-Up Pay Claims for NS

From 12 September 2022, NSmen and their employers no longer need to submit claims and supporting documents to claim NS pay for in-camp training. This is now automated and the system draws wage data from the Central Provident (CPF) board and the Inland Revenue Authority of Singapore (IRAS).

Automated make-up pay claims for NS to be rolled out from second half of 2022 - TODAY (todayonline.com)

Increase in Meal Exemption Limit

To lessen the burden of meal expenses of employees, the income tax exemption for meal subsidies will be increased from KRW100,000 to KRW200,000 per month.

Removal of five-year limit on the flat tax rate available for foreign workers

Currently, under the special tax regime for foreign nationals working in Korea, a foreign worker may choose to be taxed on his/her earned income under either the ordinary income tax rates or the flat tax rate of 20.9% (inclusive of local income tax) only for the first five years from the year in which such a foreign worker starts working in Korea for the first time. The five-year limit will be removed as of 1 January 2023. The removal of the five-year limit will apply prospectively (i.e., to foreign workers who start working in Korea for the first time on or after 1 January 2023) and also to foreign workers who are currently, or have been in the past, taxed under the special tax regime. 

Effective from 1 January 2022, employer-provided housing will be treated as taxable income regardless of qualifications (previously it was non-taxable when it met certain qualifications). This change will apply for individual income tax purposes to flat-rate taxpayers, including in general foreign expatriates and employees who start work in South Korea by 31 December 2021, with a rate of 19% (20.9% including local income surtax).

A two-year extended grace period (from 1 January 2022 to 31 December 2023) will be granted for employer-provided housing benefits to be excluded from taxable income for flat-tax-rate eligible foreigners.

1. What is changing?

Employer-provided housing (regardless of qualifications) benefits were transitioned from non-taxable income to taxable income for individual income tax purposes for flat-rate taxpayers, with a grace period until 31 December 2021.

The government has received feedback from many stakeholders on the expiration of the grace period. It has recently announced an amended presidential enforcement decree (of the Individual Income Tax Act) that provides an extended two-year grace period (from 1 January 2022 to 31 December 2023) for the above taxable income.

(Employer-provided housing)

• Residential property leased in the name of the employer (hotels excluded); and
• Related costs are paid by an employer directly to the landlord on behalf of the employee (a shareholding director is not eligible).
• Utilities are taxable.

2. How long is the extended grace period?

Employer-housing benefit income earned between 1 January 2022, and 31 December 2023.

3. Who is eligible for the flat tax rate?

Foreign expatriates and employees who start to work in South Korea by 31 December 2023 are eligible to apply for a flat income-tax rate of 19 per cent (20.9 per cent including local income surtax).

There are certain conditions to be reviewed for eligibility, but in general, foreign national employees who arrive in South Korea no later than 31 December 2023 are eligible for the flat tax rate for a five-year period.

Increment of Base salary

On 11 November 2022, the National Assembly of Vietnam has officially approved the application of a new base salary of 1.8m VND (USD72.5) per month from 1 July 2023.

Accordingly, the base salary will be increased from 1.49 m VND (currently) to 1.8m VND per month from 1 July 2023.

The Government is expected to issue official guideline on this change soon.

The increment of a base salary will impact directly the contribution of compulsory Health and Social Insurance which is calculated at the cap of 20 times of base salary. Given that, enterprises should note the above change when doing the budget for 2023. 

Increment of Regional Minimum wages

On 12 June 2022, the Government of Vietnam issued Decree 38/2022/ND-CP on statutory minimum wages paid to employees, applied from July 2022.

Below are monthly and hourly minimum wages in four regions as follows:

• Monthly minimum wages:
  • Region I: VND4.680.000 per month (increase VND260.000  per month).
  • Region II: VND4.160.000 per month (increase VND240.000 per month).
  • Region III: VND3.640.000 per month (increase VND210.000 per month).
  • Region IV: VND3.250.000 per month (increase VND180.000 per month).

(Increased by 6% compared with Decree 90/2019/N?-CP).

• Hourly minimum wages:
  • Region I: VND22.500 per hour;
  • Region II: VND20.000 per hour;
  • Region III: VND17.500 per hour;
  • Region IV: VND15.600 per hour;

Notes:

• The list of subregions of regions I, II, III and IV is specified in the Appendix issued together with Decree No. 38/2022/ND-CP.
• The subregions are also determined according to operating locations of employers as prescribed in clause 3 of Article 3 of Decree No. 38/2022/ND-CP.

Source: https://thuvienphapluat.vn/van-ban/EN/Lao-dong-Tien-luong/Decree-38-2022-ND-CP-minimum-wages-paid-to-employees/517039/tieng-anh.aspx 

The payment of contributions* to social insurance policies under Decree143/2018/ND-CP will become mandatory for foreign employees beginning 1 January2022. Specific regulations are as follows:

Employees: 

• Retirement – survivorship insurance fund: 8 per cent
• Sickness and parental insurance fund: 0 per cent
• Healthcare insurance: 1.5 per cent

Employer: 

• Retirement – survivorship insurance fund: 14 per cent
• Sickness and parental insurance fund: 3 per cent
• Healthcare insurance: 3 per cent

*Note: contribution amount = employee monthly basic pay (cap: 29.800.000 VND) x contribution percentage

For more information: https://thuvienphapluat.vn/news/headlines/38875/guidance-on-procedures-for-grant-of-vaccine-passports-is-now-available-for-use

The new policy of housing rental support for employees (Decision 08/2022/Q?-TTg)

• House rent allowance for employees renting housing and working in the industrial parks, export processing zones and key economic zones:
  • Employees working in enterprises that fully meet the conditions will be supported by VND500,000/person/month.
  • Duration: Up to three months.
  • Payment method: Monthly.

• House rent allowance for employees who come back to work and have an employment relationship and who are renting housing and working in the industrial parks, export processing zones and key economic zones:
  • Employees working in enterprises that fully meet the conditions will be supported by VND1,000,000/person/month.
  • Duration: Up to three months.
  • Payment method: Monthly.

Source: https://thuvienphapluat.vn/van-ban/EN/Doanh-nghiep/Decision-08-2022-QD-TTg-the-rent-support-policies-for-employees/509191/tieng-anh.aspx

Increase of monthly overtime cap and annual overtime cap (Resolution 17/2022/UBTVQH15)

Where the employer needs and gets the employee's consent, they may use the employee to work overtime for more than 200 hours but not more than 300 hours per year. In addition, the employer may use the employee to work overtime for more than 40 hours but not more than 60 hours per month.

Source: https://thuvienphapluat.vn/van-ban/EN/Lao-dong-Tien-luong/Resolution-17-2022-UBTVQH15-Annual-overtime-hours-ensuring-COVID19-prevention/510090/tieng-anh.aspx