Doing Business Guide in EMEIA: Payroll Operations

Payroll Operations in Europe, the Middle East, India and Africa — essential compliance and reporting considerations Introduction This booklet contains market-by-market newly established, stand-alone guidance1 on key HR payroll matters to operations. Where the EMEIA operation be considered as you expand your operations across EMEIA. is a regional headquarters or a holding company for foreign subsidiaries, or if there are existing operations in EMEIA, other considerations must be taken into account. In our experience, careful consideration of these matters at the outset is the most effective way of avoiding any issues and ensuring an optimal setup structure of your business and In all situations, we recommend that you seek specific professional advice from the contacts listed in each chapter. They will take into consideration your specific circumstances and objectives. employees in new EMEIA markets. This booklet is general in nature and not to be relied on as professional advice. Furthermore, the chapters focus on NB: This guide will work best with Adobe Acrobat Pro. 1 This information was compiled in July 2019. 2Payroll Operations in Europe, the Middle East, India and Africa — essential compliance and reporting considerations EY contacts Payroll Operate Services <ul style="display: flex;"><li style="flex:1">Sheri Sullivan </li><li style="flex:1">Michael Van Den Brand </li></ul>EY Global Payroll Operate Leader T: +17168435050 EY EMEIA Payroll Operate Leader T: +34 933 666 340 <ul style="display: flex;"><li style="flex:1">E: [email protected] </li><li style="flex:1">E: [email protected] </li></ul><ul style="display: flex;"><li style="flex:1">Country </li><li style="flex:1">Payroll leader </li><li style="flex:1">Email address </li></ul><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Armenia Austria Azerbaijan Bahrain Belarus Chad Kamo Karapetyan Regina Karner Arzu F Hajiyeva Ivan Zoricic <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a> Svetlana A Gritsouk Khatija Khan <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Congo <ul style="display: flex;"><li style="flex:1">Khatija Khan </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul>Cyprus Christoforos Socratous Martina Kneiflova Carsten Brendstrup <a href="mailto:[email protected]" target="_blank">[email protected] </a>martina.kneifl[email protected] <a href="mailto:[email protected]" target="_blank">[email protected] </a>Czech Republic Denmark Hany El Gamal Eman Atef <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Egypt Estonia Silje Sander Khatija Khan <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Equatorial Guinea Leena Fröjdman Hanna Arola leena.frojdman@fi.ey.com hanna.arola@fi.ey.com Finland France Gabon Georgia Germany Ghana India Philippe Favard Khatija Khan [email protected] <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a> Ekaterine Kiknadze Petra Kunze Khatija Khan Shobha Keni Iran Khodayar Behzadi Ali Samara khodayar.<a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Iraq Ireland Italy Michael Johnson Giuseppe Mauri Ali Samara <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Jordan Kazakhstan Kenya Kuwait Vladimir V Fesenko Khatija Khan vladimir.<a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><ul style="display: flex;"><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li><li style="flex:1">Samantha Weerasekara </li></ul>3Payroll Operations in Europe, the Middle East, India and Africa — essential compliance and reporting considerations <ul style="display: flex;"><li style="flex:1">Country </li><li style="flex:1">Payroll leader </li><li style="flex:1">Email address </li></ul>Latvia Zane Caune Zeina Frenn Khatija Khan Gerry Slater <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Lebanon Lesotho Libya Lithuania <ul style="display: flex;"><li style="flex:1">Viliune Cibulskaite </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul>Sylvie Leick Damien Pauly <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Luxembourg Madagascar Malawi <ul style="display: flex;"><li style="flex:1">Khatija Khan </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a> Khatija Khan Malta Analise Debattista Soumaya Chad Khatija Khan Morocco Mozambique Namibia Netherlands Nigeria Cameron Kotze Mariska Zuydgeest Khatija Khan Norway Randi Vatland Lode M E Ekambaram Haider Ali Patel Mohannad Hajali Marcin Jurczak Rui Henriques Oman <a href="mailto:[email protected]" target="_blank">[email protected] </a>haider.<a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Pakistan Palestine Poland Portugal Saman Fernando Vineet Parmar <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Qatar Romania <ul style="display: flex;"><li style="flex:1">Radu Tudoran </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul>Russia Ekaterina Mukhina Khatija Khan <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Rwanda Saudi Arabia Slovakia Mohammad Sarmad Denisa Valaskova Mojca Lukač <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Slovenia South Africa Switzerland <ul style="display: flex;"><li style="flex:1">Khatija Khan </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul>Roman Rinderknecht Narjes Y. Tomeh Khatija Khan <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Syrian Arab Republic Tanzania United Arab Emirates Uganda Alexander Tharyan Khatija Khan alexander.<a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>Ukraine <ul style="display: flex;"><li style="flex:1">Olga Gorbanovskaya </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul>Alison Ashcroft Elaine Schug <a href="mailto:[email protected]" target="_blank">[email protected] </a><a href="mailto:[email protected]" target="_blank">[email protected] </a>United Kingdom Zambia <ul style="display: flex;"><li style="flex:1">Khatija Khan </li><li style="flex:1"><a href="mailto:[email protected]" target="_blank">[email protected] </a></li></ul>4Payroll Operations in Europe, the Middle East, India and Africa — essential compliance and reporting considerations Contents Introduction .................................................. 2 Lithuania..................................................... 86 EY contacts ................................................... 3 Luxembourg ................................................ 88 Armenia........................................................ 6 Madagascar................................................. 92 Austria.......................................................... 8 Malawi ........................................................ 94 Azerbaijan................................................... 12 Malta .......................................................... 96 Bahrain ....................................................... 14 Morocco...................................................... 98 Belarus ....................................................... 16 Mozambique.............................................. 100 Chad........................................................... 18 Namibia..................................................... 102 Congo-Brazzaville ........................................ 20 The Netherlands ........................................ 104 Cyprus ........................................................ 22 Nigeria...................................................... 108 Czech Republic ............................................ 24 Norway ..................................................... 110 Denmark ..................................................... 26 Oman........................................................ 112 Egypt .......................................................... 28 Pakistan .................................................... 114 Estonia........................................................ 32 Palestine ................................................... 118 Equatorial Guinea......................................... 36 Poland ...................................................... 120 Finland........................................................ 38 Portugal.................................................... 122 France......................................................... 40 Qatar ........................................................ 124 Gabon ......................................................... 42 Romania.................................................... 126 Georgia ....................................................... 44 Russia....................................................... 132 Germany ..................................................... 46 Rwanda..................................................... 136 Ghana ......................................................... 50 Saudi Arabia.............................................. 138 India ........................................................... 54 Slovakia .................................................... 140 Iran............................................................. 56 Slovenia .................................................... 144 Iraq............................................................. 60 South Africa .............................................. 148 Ireland ........................................................ 62 Switzerland ............................................... 152 Italy ............................................................ 64 Syrian Arab Republic.................................. 158 Jordan ........................................................ 68 Tanzania.................................................... 160 Kazakhstan.................................................. 70 UAE .......................................................... 162 Kenya.......................................................... 74 Uganda ..................................................... 164 Kuwait......................................................... 76 Ukraine ..................................................... 166 Latvia ......................................................... 78 United Kingdom......................................... 168 Lebanon...................................................... 80 Zambia...................................................... 170 Lesotho....................................................... 82 Foreign currencies ..................................... 172 Libya........................................................... 84 5Payroll Operations in Europe, the Middle East, India and Africa — essential compliance and reporting considerations Doing Business in Armenia — Payroll Operations 1. Government requirements Registration requirements Tax registration Pursuant to Republic of Armenia (RA) Tax Code, the company obtains a Tax Identification Number (TIN) together with the general registration documents at the point of its setup. There is no specific registration requirement for the company for Personal Income Tax (PIT) purposes. The company will have PIT withholding obligations on the taxable income provided to employees. It is the obligation of the company to register the employees in the electronic system of the tax authority (State Revenue Committee) for PIT and social contributions reporting purposes. Ongoing compliance requirements Personal income tax (PIT) In accordance to RA Tax Code, the company is obliged to withhold PIT from the employee’s pay on a monthly basis and settle this on behalf of the employee. The company should submit the monthly PIT return electronically to local tax authorities and settle the PIT payable before the 20th of the month following the reporting month. Starting 1 January 2020, PIT is calculated at a flat rate of 23%. This rate will be reduced by one percentage point for each consecutive year to reach a flat rate of 20% as shown below: <ul style="display: flex;"><li style="flex:1">Time-period </li><li style="flex:1">PIT rate </li></ul><ul style="display: flex;"><li style="flex:1">23% </li><li style="flex:1">Starting 1 January 2020 </li></ul>Starting 1 January 2021 Starting 1 January 2022 Starting 1 January 2023 22% 21% 20% EY contacts 2. Pension requirements Zurab Nikvashvili Partner Registration requirements Ernst & Young CJSC T: +995 32 439 374 E: [email protected] Social security There is no specific registration requirement for the company. However, as mentioned above, the company should register its employees electronically in the system of the tax authorities and, as a tax agent, is responsible for calculating and transferring the corresponding social contributions. Kamo Karapetyan Senior Manager Employees born after 1 January 1974 are automatically considered as social contributions payers. Those born prior to 1974 can voluntarily become participants by submitting an application for making social contributions. Ernst & Young CJSC T: +374 10 500 790 E: [email protected] Ongoing compliance requirements Mikayel Arzumanyan Advanced Staff Ernst & Young CJSC T: +374 10 500 790 E: [email protected] Monthly social contributions The company is obliged to withhold social contributions from employees’ pay (including foreign employees) on a monthly basis and settle them on their behalf. The company should report the amounts of social contributions in its monthly PIT return and settle them before the 20th of the month following the reporting month. The social contributions shall be calculated by the company at the following general rates: • If the total monthly salary of the employee does not exceed AMD500,000: 5% • If the total monthly salary exceeds AMD500,000: the difference between 10% of the total monthly gross salary and AMD25,000 • If the total monthly salary exceeds 15 times of the monthly minimum salary defined by the law, (hereinafter the Cap): the difference between 10% of the Cap and AMD25,000 This amount shall be transferred to the savings account of the employee on a monthly basis. The following temporary exceptions are defined by the law from the above general rates: 1. Until 1 July 2020, social contribution shall be calculated at 2.5% of the monthly salary, but shall not be more than AMD12,500. 2. Starting 1 July 2020 to 31 December 2020, the social contribution shall be calculated at the following rates: • if the total monthly salary of the employee does not exceed AMD500,000: 2.5% • If the total monthly salary exceeds AMD500,000: the difference between 10% of the total monthly salary and AMD37,500 6Payroll Operations in Europe, the Middle East, India and Africa — essential compliance and reporting considerations • If the total monthly salary exceeds the Cap: the difference between 10% of the Cap and AMD37,500 The temporary disability allowance is calculated on 80% of the employee’s average monthly salary (income). If this amount exceeds 10 times the sum of the minimum monthly gross salary, then the temporary disability allowance is calculated on the amount of the minimum monthly gross salary at the time of temporary disability multiplied by 10. 3. Starting 1 January 2021 to 31 December 2021, the social contribution shall be calculated at the following rates: • If the total monthly salary of the employee does not exceed AMD500,000: 3.5% Maternity leave and allowance • If the total monthly salary exceeds AMD500,000: the difference between 10% of the total monthly salary and AMD32,500 In accordance with Labor Code regulations, working women may be granted maternity leave as follows: • If the total monthly salary exceeds the Cap: the difference between 10% of the Cap and AMD32,500 • Leave of 140 days (70 days before childbirth and 70 days after childbirth) 4. Starting 1 January 2022 to 31 December 2022 the social contribution shall be calculated at the following rates: • For complicated childbirth cases, 155 days (70 days before childbirth and 85 days after childbirth) • If the total monthly salary of the employee does not exceed AMD500,000: 4.5% • In the case of having more than one child, 180 days of leave (70 days before childbirth and 110 days after childbirth) • If the total monthly salary exceeds AMD500,000: the difference between 10% of the total monthly salary and AMD27,500 In accordance with the RA Law on Temporary Disability and Maternity Allowance, the corresponding allowance is calculated on the basis of the employee’s average monthly salary. If the average monthly salary of the employee exceeds 15 times the minimum monthly gross salary set at the time of the disability, then the maternity allowance is calculated on the minimum monthly gross salary multiplied by 15. If the average monthly salary of the employee is less than 50% of the minimum monthly gross salary set at the time of the disability, then the maternity allowance is calculated on 50% of the minimum monthly gross salary. • If the total monthly salary exceeds the Cap: the difference between 10% of the Cap and AMD27,500 5. Starting 1 January 2023, the general rates will apply. 3. Employment obligations Minimum monthly salaries The minimum monthly salary in the RA is AMD68,000 net of taxes.

Doing Business Guide in EMEIA: Payroll Operations

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