Global Employment Tax and Compliance Newsletter. 10th Edition. October 2023

Press Release from Acumen International: Global EOR/PEO

Welcome to the October 2023 edition of the Global Employment Tax and Compliance Newsletter. This month, we have curated a selection of topics at the forefront of regulatory shifts and strategic planning across the world.

Whether you are an employer adjusting to newly minted regulations or a global employment solutions provider, this edition aims to equip you with the insights you need for operational excellence in a dynamic environment.

๐Ÿ‡ฎ๐Ÿ‡น Italy Announces Work Visa Quotas for 2023โ€“2025

Overview

In a recent development, the Italian government has published a decree outlining the number of non-EEA workers allowed in the country for the period of 2023 to 2025. The cap is set at 450,000, with 136,000 quotas allocated for 2023 alone. This has important implications for organisations planning their staffing strategies in Italy.

Key Dates

  • Quota Announcement: 27th September 2023
  • Official Gazette Publication: 3rd October 2023

Application Timelines

  • Cooperative Agreement Countries: Subordinate work permit applications from 9 am, 2nd December 2023
  • Other Subordinate Work: Applications from 9 am, 4th December 2023
  • Seasonal Work: Applications from 9 am, 12th December 2023

Quota Categories

The 136,000 quotas for 2023 are distributed as follows:

Seasonal Work: 82,550 quotas, focused on agriculture and the hospitality and tourism sectors, reserved for certain nationalities.

Subordinate & Self-Employed Work: 53,450 quotas, further broken down as 52,770 for employee work and 680 for self-employment.

Specific Nationalities : 25,000 quotas for nationals of designated countries, including Albania, Egypt, and India, among others.

Cooperative Agreement Countries : 12,000 quotas reserved for future cooperation agreements.

Special Categories: Specific quotas for Italian ancestry holders in Venezuela, stateless persons, refugees, family care and support services, and more.

Strategic Considerations

Planning ahead in line with these quotas can significantly streamline your immigration and staffing strategy in Italy.

๐Ÿ‡ช๐Ÿ‡บ EU Extends Temporary Protection for War-Displaced Ukrainians Through March 2025

Overview

The European Council has agreed to extend temporary protection status for Ukrainians displaced by the ongoing war in their homeland. Initially activated on 4 March 2022, this status has now been extended through 4 March 2025, providing clarity and assurance for both affected individuals and their employers within the EU.

Key Extension Details

Extended Duration: From 4 March 2024 to 4 March 2025

Governing Directive: EU Directive 2001/55/EC

Eligibility: Specific to Ukrainians displaced on or after 24 February 2022 due to military actions.

Why Matters

This decision has immediate and significant consequences:

  • Labour Market Access: Individuals with this temporary status can work in the EU immediately.
  • State Benefits: Includes access to social welfare, housing, healthcare, and education.
  • Employer Assurance: Businesses employing these individuals can plan better, knowing their staff have secured status through March 2025.

Categories Covered

The directive covers:

  • Ukrainian Nationals: Those residing in Ukraine before the war began on 24 February 2022.
  • Stateless and Third-Country Nationals: Who had protection in Ukraine prior to the war.
  • Family Members: Of both the above categories.

Future Considerations

The temporary protection is slated to end in March 2025. Discussions are ongoing about subsequent steps, and organisations should stay alert for updates that may impact staffing strategies.

๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom Issue Updated Travel Advisories for Israel

Overview

In the wake of escalating conflicts between Israel and Hamas, the United Kingdom has updated the travel advisories concerning Israel. To safeguard their citizens, government-supported flights have been organised for the repatriation or relocation to safe third countries of U.K. nationals currently in Israel.

State of Emergency

The U.K. government has announced that a state of emergency is in effect across Israel. Unexpected border closures, both air and land, are a possibility in Israel and the Occupied Palestinian Territories (OPTs).

U.K. Advisory

The U.K. government has updated its travel advice and is requesting British nationals currently in Israel to inform the government and to comply with plans for their safe exit from the country.

Why It's Important

  • Security Concerns : The situation is volatile and sudden changes in operational conditions can occur.
  • Corporate Responsibility: Companies with employees who are U.K. nationals, or third-country nationals, currently in Israel should be vigilant regarding updates in government policies related to safety and travel.
  • Communication Is Key: It's crucial for employers to communicate the next steps to their workforce in Israel and to implement emergency plans to ensure their safety.

Key Points to Note

  • No reported closures of consular offices or embassies.
  • Israelis can use a valid foreign passport for travel until 31 December 2023.
  • Work permit applications may face delays due to staffing shortages at Israel's immigration authorities and consulates.
  • Israelis have visa-free entry to Schengen countries for a maximum of 90 days in any 180-day period. The legality of remote work during this period should be verified country-by-country.
  • As the situation remains fluid, it's advised to watch updates from travel agents, immigration counsel, and global mobility professionals for the most current information.
  • Operations continue at Ben Gurion Airport, though passengers should be aware that some commercial flights have experienced delays or cancellations.

๐Ÿ‡ฆ๐Ÿ‡บ Australia โ€“ U.K. Innovation and Early Careers Skills Exchange Pilot (IECSEP)

Overview

The Innovation and Early Careers Skills Exchange Pilot (IECSEP) is an initiative designed to offer short-term employment opportunities in Australia for innovative and early-career professionals from the United Kingdom. This programme is part of the Australia-United Kingdom Free Trade Agreement (A-UKFTA).

Availability and Future Projections

Initially, there will be 1,000 visas made available during the first-year pilot of the IECSEP. This allocation will double to 2,000 visas in the second year, at which point the programme will also be reviewed.

Two Key Streams

  • Early Careers Stream

Age: 21-45 years

Qualifications : Tertiary education required

Work Experience: At least 3 months in the current organisation

Duration: Up to one year in Australia

  • Innovation Stream

Age: No age limit

Expertise: Must demonstrate innovative contributions

Sectors : R&D, Renewable Energy, AI, Medical Tech, etc.

Duration: Up to three years in Australia

Application Steps

  • Initial Endorsement: Apply to the Department of Foreign Affairs and Trade (DFAT) for an initial endorsement. Submit employment proof and additional documents based on your stream.
  • Letter of Support: If endorsed, DFAT issues a Letter of Support.
  • Visa Application: Submit the Letter of Support when applying for the Temporary Work (International Relations) Government Agreement stream (subclass 403) visa.
  • Eligibility Factors
  • Financial Self-Sufficiency: Must demonstrate financial ability to support oneself and accompanying family.
  • Health & Character : All applicants and families must meet standard requirements.
  • Processing Timelines: DFAT processing times to assess IECSEP applications are currently unavailable.  Current processing times for the subclass 403 visa, following lodgement with the Department of Home Affairs, are estimated to be 11 days.

OECD Update on International Tax Reform Provided to G20 Finance Ministers (October 2023)

Understanding the Latest Multilateral Convention by the OECD/G20 Inclusive Framework on International Taxation

Highlights

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting has released a new Multilateral Convention. This marks a significant step toward the finalisation of the Two-Pillar Solution, designed to tackle tax issues emerging from the digitalisation and globalisation of the economy.

Overview

The Multilateral Convention to Implement Amount A of Pillar One (MLC) is the latest development from the OECD/G20 Inclusive Framework, aiming to align international tax policies with 21st-century realities. It will soon be discussed at a meeting of G20 Finance Ministers and Central Bank Governors in Morocco.

What MLC Achieves

  • Reallocation of Tax Rights: Pillar One focuses on reallocating taxing rights over profits to market jurisdictions, targeting large multinational corporations (MNEs) irrespective of their physical presence there.
  • Elimination of Digital Services Taxes: The MLC works toward repealing and preventing the proliferation of digital services taxes.
  • Mechanisms Against Double Taxation: It also establishes systems to avoid double taxation, contributing to stability and certainty in international taxation.

Ongoing Discussions

There is a broad consensus on most aspects of the MLC. However, a few issues are still under negotiation among a small number of jurisdictions that are constructively working to resolve them.

Financial Implications

Pillar One is expected to affect about USD 200 billion in profits annually, leading to global tax revenue gains of between USD 17-32 billion. Low and middle-income countries stand to benefit the most from this redistribution.

Developments on Pillar Two

  • Subject to Tax Rule (STTR): This treaty-based rule allows developing countries to "tax back" certain intra-group payments taxed at nominal rates below 9%.
  • Global Minimum Tax: Pillar Two introduces a universal minimum tax of 15% on large MNEs, irrespective of where they operate.

Closing Remarks

The release of the MLC is a monumental step in modernising international tax law. It aligns closely with the Two-Pillar Solution's objectives to tackle tax complexities arising from globalisation and digitalisation. OECD Secretary-General Mathias Cormann calls it a "fundamental reform" in making international taxation fairer and more relevant in today's digital age.

๐Ÿ‡ฌ๐Ÿ‡ฌ New Statutory Minimum Wage Rates in Guernsey Effective from 1 October 2023

Effective from 1 October 2023, Guernsey has updated its statutory minimum wage rates for adults and young persons. These changes also include adjustments to the maximum weekly 'offset' rates for accommodation and food provided by employers.

Additional Information

Entitlement : Under Guernsey Law, almost all workers are entitled to a minimum wage. The rules apply uniformly regardless of business size or if a private individual employs the worker.

๐Ÿ‡ฌ๐Ÿ‡งNavigating Employment Practices Under UK Competition Law: CMA Guidance

Introduction:

The UK's Competition and Market Authority (CMA) has outlined how competition law impacts employment practices, specifically regarding wage-setting and employee recruitment and retention. The advisory is aimed to help employers stay on the right side of the law.

Risky Behaviours in Labour Markets

  • No-poaching Agreements: Employers should avoid agreements that promise not to recruit from each other's staff pools.
  • Wage-fixing Agreements: Any form of collusion with other businesses to set a standard rate for employee wages is considered illegal.
  • Information Sharing: The disclosure of sensitive employment conditions between businesses can be a violation of competition law.

Preventive Measures

To avoid breaking the law, the CMA recommends that employers:

  • Understand the applicability of competition law on no-poaching and wage-fixing agreements.
  • Educate HR and recruitment staff about competition law.
  • Implement robust internal reporting mechanisms.

Consequences for Violation

Fines can amount to as much as 10% of a business's global annual turnover. Individuals may also face penalties, including imprisonment for up to 15 years.

Reporting

The CMA encourages reporting of anti-competitive behaviours and offers leniency options, including reduced fines and immunity from prosecution under certain conditions.

๐Ÿ‡ณ๐Ÿ‡ฑDutch Senate Turns Down 'Work Where You Want' Act

The Dutch Senate has rejected the 'Work Where You Want' Act a year after its approval by the Dutch parliament. Despite its dismissal, current law mandates employers to consider requests for remote work, as outlined in the existing Flexible Working Act.

What Was the 'Work Where You Want' Act?

The rejected bill aimed to strengthen employees' rights to work remotely within the European Union. If enacted, employers would have been required to permit remote work, so long as the request aligned with reasonableness and fairness, considering all involved circumstances.  

Ambitions of the Rejected Bill

The bill, formally known as the Act Working Wherever You Want, had the ambitious goal of revolutionising workplace flexibility. It was crafted to compel employers to accommodate requests from employees wishing to work remotely within the EU. The requirement for employer compliance hinged on a set of nuanced criteria, namely the balance between employer interests and employee needs, evaluated against a framework of reasonableness and fairness.

Reasons for Senate Rejection

Despite its transformative aims, the Senate struck down the bill, citing multiple concerns. The legislative body argued that the billโ€™s prescriptive nature would corner employers into an inflexible operational model, hampering their ability to manage business activities effectively. The Senate also questioned the potential adverse effects on employee productivity and workplace morale if the bill were enacted.

Government Commitment to Remote Work Flexibility

Despite the setback, the Dutch government has reaffirmed its commitment to enhancing remote work options. In a recent statement, it declared a vested interest in simplifying remote work conditions for employees while maintaining managerial effectiveness for employers.

Recommendations for Employers

The act could have had far-reaching implications for Dutch businesses. Employers would need to consider foreign employment law and navigate complex tax and social security issues, especially if employees sought to work from other countries. Despite the act's rejection, employers should still assess workplace adjustment requests as per the Flexible Working Act. Employers should formulate a clear hybrid working policy, including guidelines on how to handle remote work requests.

Halloween Spooktacular Feature: Navigate the "Haunted House" of Global Employment with Laughter! ๐ŸŽƒ๐ŸŒ

This Halloween, take a break from the ghouls and ghosts to dive into a different kind of adventureโ€”the labyrinth of global employment! If you've ever felt navigating international employment laws is like walking through a haunted house ๐Ÿ‘ป, you'll love our featured video, "Global Employment Adventure: The Fun & Frustration Comedy!" ๐ŸŽฌ

From the tricks of payroll budgeting in foreign currencies ๐Ÿ’ฑ to the threats of making sense out of complex employment laws ๐Ÿ“œ, this comedy video tackles it all. Think hiring contractors is the magic potion ๐Ÿง™โ™‚๏ธ for avoiding complexity? Think again! Misclassifying workers can lead to a real witch-hunt ๐Ÿšซ.

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Watch and learn how to make your employment journey more treat than trick ๐Ÿฌ!

Global Employment Adventure: Fun & Frustration Comedy

Wrapping Up This Spooktacular Edition ๐ŸŽƒ๐Ÿ‘ป

As we draw the curtains on this Halloween edition of our newsletter, we'd like to extend a big thank you for joining us on this global employment adventure ๐ŸŒ๐ŸŽฌ.

We hope the insights and resources we've shared, including our feature video, have been enlightening and entertaining.

As the nights grow longer, remember: global expansion doesn't have to be a haunting experience. Armed with the right information, you can turn any challenge into an opportunity ๐ŸŒŸ. Together, let's do so to make your global employment journey more sweet than spooky! ๐Ÿฌ๐Ÿ‘ป