Global Business Travellers

On 11 December 2019 the Irish Revenue issued a much awaited update to the PAYE rules for non-Irish employments exercised in the State. The update to the current rules is welcome, practical and business friendly.

The Ministry of Social Affairs and Employment has announced that the long-awaited reporting obligation for EU employers who come to work in the Netherlands with their staff, will take effect on 1 March 2020. From that date, all employers from other EU Member States will have to report in advance if they perform work in the Netherlands with their personnel.

The German Federal Ministry of Labour and Social Affairs (BMAS) confirmed in a recent June 2019 announcement that an A1 certificate is not required for every short business trip. The A1 certificate ─ also referred to as the 'certificate of applicable law' ─ confirms that in the case of temporary employment in another EEA State or Switzerland, only the corresponding German regulations apply instead of the social security regulations for that jurisdiction.

The government proposed to introduce the term ‘economic employer’ into Swedish tax legislation in 2017. The goal was to help taxpayers distinguish an employment relationship when applying the Swedish so-called 183-days rule as well as when interpreting the 183-days rule in tax treaties where Sweden is a contracting state. The initial intention was to introduce the economic employer concept into law by 1 January 2019, however this did not occur. Recently, the government announced that it intends to review the proposal again and ensure that the new rules come into force 1 January 2021.

Should German employers apply for an A1 certificate for their employees on very short business trips within the European Union (EU) and to Switzerland? This question arises because from mid-2019, it will be mandatory to apply for these A1 certificates electronically via payroll accounting. However, notwithstanding the introduction of the electronic application procedure, there is no need to apply for the A1 certificate for every business trip to the EU or Switzerland.

From 1 January 2019, all Malaysian employers must register their foreign employees working in Malaysia (excluding domestic servants) with the Malaysian Social Security Organisation and contribute to the Employment Injury Scheme.

Scrutiny regarding the alignment of corporate documentation from an Immigration, Tax, and Social Security perspective has increased, for people undertaking assignments in India. This enhanced scrutiny has been implemented to prevent people from undertaking multiple assignments per year but applying for new short term visas each time; using this loophole to avoid the tax requirements that an extension/registration would trigger.

With effect from 1 January 2019, the Norwegian tax authorities have introduced a Source Tax system based on the ‘Pay As You Earn’ (PAYE) principle for individuals who are temporarily staying in Norway.

 The system is inspired by the UK PAYE and the Swedish SINK model. Whilst the Norwegian tax authorities will reap the same benefits as Sweden and the UK, employers and employees will also benefit from reduced administration and a simpler tax system.

The Swedish Tax Agency recently presented a memorandum that proposed the introduction of the term ‘economic employer’ into Swedish tax legislation. The formal employer concept is proposed to be replaced by an ‘economic employer’– this will imply a change on how to distinguish an employment relationship when applying the Swedish, internal so-called 183 days rule as well as when interpreting the 183 days rule in tax treaties where Sweden is a contracting state.

This webcast covered the upcoming changes in the PWD and the impact on global mobility, together with the local implementation of the Enforcement Directive by each member state.

The Posting of Workers Directive (PWD), introduced in the European Union (EU) in 1996, is an important piece of legislation with two objectives: Protect the employment rights of employees working temporarily in another European country and prevent unfair competition between businesses in lower- and higher-cost European territories. Over the past two years, proposed - and potentially far-reaching - amendments to this Directive have been working through the European legislative process. The most striking would limit the length of time an employee can be treated as a posted worker to 12 months, with a potential six-month extension, following which almost all of the employment rights available to local employees in the host location would become applicable to the mobile employee.