Global Expansion Update - October 2018

AFRICA

Kenya

Strict Adherence to Work Permit Application Process

On 27 August 2018, the Kenyan Department of Immigration issued a new directive stating that it will increase its control over the requirement for foreign nationals, seeking to work in Kenya, to apply for a work permit prior to entry into the country.

Foreign nationals must apply for and acquire their work permit prior to their arrival in Kenya. Individuals arriving on a business visa will not be allowed to acquire a work permit in Kenya later.

Foreign nationals with expired work permits cannot remain in Kenya during the processing of their work- permit renewal application. It is advisable to file their work-permit renewal applications at least four months prior to the work-permit expiry date to avoid facing any consequences of leaving Kenya.'

Nigeria

Updated Transfer Pricing Regulations

Nigeria's Federal Inland Revenue Service reportedly issued the memorandum on Income Tax (Transfer Pricing) Regulations 2018, which incorporates certain aspects of the 2017 OECD Transfer Pricing Guidelines. Key points of the new regulations are as follows:

Changes in the definition of the connected (related) persons; New transfer pricing documentation requirements and exemptions; New rules for transfer pricing declarations for change in the structure or circumstances of a person that would affect whether or not that person is connected with another; Removal of the safe harbor rules relating to statutory or regulatory prescribed prices; New rules on intragroup funding to limit capital-rich companies to a risk-free return;

New rules for the pricing of intragroup services; New rules on the allocation of returns from the exploitation of intangible assets; A new limit on the deduction of payments for rights to exploit intangibles (royalties) to 5% of Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA); New rules on the use of quoted prices for commodity import and export transactions; Updated documentation requirements for advance pricing agreements; and Stricter Penalties for non-compliance. AMERICAS

Canada

Increase in Minimum Wage Rate

The minimum wage rate will rise from CAD 13.65 to CAD 15 per hour in Alberta and will be effective from October 1 2018.

Minimum wage rates for 2017-2018

The following minimum wage rates are set out in the Employment Standards Regulation:

Type of employee October 1, 2017 October 1, 2018 Most employees (general minimum wage) CAD 13.60/hour CAD 15/hour Salespersons (including land agents and certain professionals) CAD 542/week CAD 598/week Domestic employees (living in their employer's home) CAD 2,582/month CAD 2,848/month For more information, click here.

United States

New Tax Transcript for Data Protection of Taxpayer

Recently, various measures have been taken to protect a taxpayer's data.

Internal Revenue Service (IRS) announced a new format for individual tax transcripts to write personally identifiable information from the Form 1040 series. In addition to that, IRS has also created a new Client File Number that lenders, universities and other third parties who order transcripts for non-tax purposes can use as an identification number instead of the social security number of the taxpayer.

For more information, click here.

Due Date extended to provide Tax Relief

The Internal Revenue Services (IRS) announced that the Hurricane Florence victims in parts of North Carolina could file certain individual and business tax returns, and make certain tax payments until 31 January 2019.

For more information, click here.

Florida Minimum Wage - Tip Credits

The Fair Labour Standards Act (FLSA) and Florida minimum wage law allow an employer to take a tip credit toward its minimum wage obligation for "tipped employees." A "tipped employee" is an employee who customarily and regularly receives more than USD 30 per month in tips.

If an employee's tips combined with the employer's direct wages of at least USD 5.23 an hour do not equal to the minimum hourly wage, the employer must make up for the difference. A tip credit may be taken for the workweek to the extent of the tip received by an employee. If reported tips fall below the tip credit, the employer remains liable to pay wages for the difference between the credit taken and the tips received. The employer cannot pay less than USD 5.23 per hour to the tipped employees, but it can pay more.

For more information, click here.

Michigan passes Paid Sick Leave Law

Recently, The Michigan Legislature adopted a new law wherein an employer has to provide its employees paid leave that can be used for "sick" and "safe" time purposes. Michigan's Earned Sick Time Act (ESTA) is the Midwest's first statewide Paid Sick and Safe Time (PSST) law.

Change in Taxability of Reimbursements

The Internal Revenue Services (IRS) announced that the reimbursements that an employer pays to an employee in 2018 onwards would be now subject to taxes. Earlier, employer payments or reimbursements for the employees' moving expenses, incurred prior to 2018, were excluded from the employee's wages for income and employment tax purposes.

The 2017 Tax Cuts and Jobs Act (TCJA) suspended the exclusion from income for moving expenses reimbursed or paid by an employer for most employees starting in 2018, making these amounts taxable, except for the amounts for active-duty members of the U.S. Armed Forces, whose moves relate to a...