GRANT THORNTON Global expatriate tax guide

1 GRANT THORNTON . Global expatriate tax guide Organisations that send their greatest assets their people overseas to work can face certain tax burdens. Working overseas offers an opportunity for business and personal growth. However, employers have to make sure that remuneration is competitive and that tax, social security and pension issues associated with relocation are addressed. Working with both companies and individuals and using our Global network of specialists, we can advise on the pitfalls associated with working abroad and make sure that appropriate pre-assignment planning opportunities are implemented effectively to minimise the tax burden for both parties.

2 Our tax specialists across the network work together on complex multi-jurisdictional issues to help employers to adopt a consistent and transparent approach to their expatriate assignments. This ensures that their employees are treated fairly and are clear about the terms of their relocation package. expatriate tax guide This expatriate tax guide has been designed to provide an overview of the different tax systems around the globe and gives further information about tax systems and regulations in specific countries. Contents 1 Albania 79 Greece 161 Macedonia 225 Slovak Republic 5 Armenia 83 Guinea 165 Malaysia 229 South Africa 9 Austria 91 Hong Kong 169 Morocco 233 Sweden 17 Azerbaijan 95 Hungary 173 Namibia 237 Switzerland 23 Belgium 99 Indonesia 177 The Netherlands 241 Taiwan 27 Botswana 101 Iran 181 Norway 245 Thailand 31 Canada (non-Qu bec) 105 Ireland 185 New Zealand 249 Uganda 39 Canada (Qu bec)

3 109 Italy 189 Pakistan 253 Ukraine 47 Chile 117 Japan 193 Peru 261 united Arab Emirates 51 China 121 Kazakhstan 197 Philippines 263 united Kingdom 55 Cyprus 125 Kenya 201 Poland 267 united states 59 Czech Republic 129 Korea 205 Portugal 273 Uruguay 63 Denmark 133 Kosova 209 Puerto Rico 281 Vietnam 67 France 141 Latvia 213 Russia 71 Germany 145 Lebanon 217 Senegal 75 Gibraltar 153 Lithuania 221 Singapore Albania Expatriates taking up employment in Albania Employment visas will be subject to comprehensive rules and in The Albanian legislation sets the annual quota for most cases employment visa requirements.

4 The the employment of foreigners in the Republic of tax, legal and outsourcing team can help Albania, taking into consideration the needs of the expatriates and their employers in dealing with employment market and migration policy. the Albanian tax and employment visa Additionally local employers must justify hiring requirements, as well as with the Albanian foreign individuals and the number of foreigners labour and social security issues. In particular working for an employer should not exceed 10% of GRANT THORNTON Albania can assist expatriates the total number of staff in the previous 12 months.

5 And their employers in providing working and There are limitations for EU expatriates based on residence permits, reviewing tax equalisation reciprocity Bilateral or Multilateral Agreements, for policies, tax calculation and providing expatriates that do not require a work permit (WP). compliance services regarding the Albanian in accordance with law. Different types of WP are tax filing requirements. issued by the activity that the expatriate will Albanian resident taxpayers must prepare perform as employer/employee, transferred within and file an annual personal income return to the the company, investors, seasonal work, student and tax authorities no later than 30 April following professional development etc.

6 WPs are also issued the subsequent period. Non-residents only pay for family members of foreigners residing lawfully tax on income generated within the territory of in Albania and these have a priority in their Albanian and can prepare and file (although not issuance. Generally a WP is up to one year, with the obliged to by law) an annual personal income option of being renewed. However there are cases return for their income derived from Albania where the WP is issued with validity of the required sources only. period for performing the work. After two renewals of a WP the foreign worker has the right Facts and figures to have a permanent work permit provided that Pre arrival procedures certain condition is met.

7 Foreign citizens may enter the territory of Albania with or without visa (depending on nationality). As a general rule foreign citizens working in Albania for a period greater than one month are required to obtain a work permit, unless exempt by law or an international agreement. There is an exception to the general rule for EU countries and the Schegen area, they enjoy equal rights with Albanian citizens in the areas of employment and self employment. Application forms are obtained from the migrations department in the ministry of labour and social affairs in Albania embassies, consulates abroad and in regional labour office of the respective districts.

8 expatriate tax ebook 2014 1. Tax returns and compliance Income from employment Albanian residents and those expatriates that have An Albanian tax charge on employment income is become Albanian tax residents by residing in the derived from duties performed in the Republic of Republic of Albania for 183 days or more, must file Albania. Assessable employment income includes their annual tax return before 30 April of the year all wages, salaries and other compensation derived following the calendar year. from employment relations that are basic pay, Payment of Albanian tax the employer (the overtime pay, bonuses, director's fees allowances payer of the income) is obliged to withhold and pay and any other remuneration and benefits granted in the name and behalf of the employee, the amount for the performance of employment.

9 Of personal income tax, during each separate payment. Source of employment As mentioned above, where duties are performed Tax year on the territory of the Republic of Albania, any The Albanian tax year is from 1 January to 31 remuneration received in respect of these duties is December. treated as Albanian sourced income and therefore subject to Albanian income tax regardless of the Income tax rates expatriate 's tax residence status. The personal income tax rate in Albania is a flat rate of 10%. Benefits (in kind). In general where the benefit is enjoyed in the Sample income tax calculation Republic of Albania, an Albanian income tax charge will arise.

10 Therefore, housing, meal allowances, provision of a car and relocation allowances will Employment income per month: 1000 come within the charge to Albanian income tax in Tax at 10%: 100. addition to the individual's salary. However if these benefits will be as the compensation in kind, paid not Basis of taxation in cash by the employer, of such type as: food Charge to tax compensation, donation of vehicles, house appliances, A charge to Albanian tax is dependent on whether etc., then the value of services in kind (goods or the income arises in Albania, and the extent of the services) will be classified as an un-deductible expense charge will be determined by an individual's tax of the employer for corporate income tax purposes residency status.