Deloitte Global Insights: Various Countries 12 March 2010

Belgium: New law impacts R&D payroll tax incentives for
universities and registered scientific institutions

Universities and Registered Scientific Institutions have
been exempted to remit to the State a part (75% since 1st January 2009)
of the payroll taxes that are withheld from the salaries and wages of
its Post-Doctoral Researchers and Assistant Researchers. This payroll
tax incentive has been available to Universities since 1st October 2003
and has been extended to Registered Scientific Institutions since 1st
January 2006. This partial exemption aims to give these institutions
more financial leeway to increase their R&D budget or to hire
additional researchers, (i.e. to promote research activities in
Belgium). 

Ireland
Finance Bill 2010


The Finance Bill was published on 4 February 2010. While
there have been no increases in tax rates, or significant abolition of
tax reliefs, a number of changes have been introduced which impact a
wide range of individuals. The important changes are outlined below. 

Revenue eBrief
No.11/10 has significant consequences for those entitled to the
remittance basis of taxation


Revenue issued an eBrief on 2nd March 2010 which has
significant consequences for individuals who are entitled to claim the
remittance basis of taxation. As a result of the eBrief, individuals may
be entitled to a refund of Irish tax paid on U.K. source income and
gains in the period 2006 to 2008. To make such a claim an individual
must be either non-domiciled or if an Irish citizen, was resident but
non-ordinarily resident in the state for one of the years concerned. 

Philippines
New BIR circular clarifying the
meaning of "managerial and technical positions"


The Philippine Bureau of Internal Revenue (BIR) has issued
Revenue Memorandum Circular (RMC) No. 41-2009 to clarify the meaning of
the term "Managerial and Technical Positions" under Section 25(C) of the
1997 Philippine Tax Code, as amended. 

Sweden
Net
salary contracts more expensive after court ruling


The Swedish Supreme Administrative Court passed a ruling on
23 February 2010 determining the method for net to gross calculations,
which leads to higher tax and social security costs for companies using
net remuneration packages than by applying the previously used methods.
There is, therefore, a need to review the remuneration packages for
assignees going to Sweden and in some cases also assignments from
Sweden. 

United Kingdom

Gaines-Cooper V2


In an important ruling on the status of HMRC's published
guidance to taxpayers, the Court of Appeal has affirmed that HMRC is
bound by assurances given in its published guidance on residence
(booklet IR20). Taxpayers who fall within a situation set out by HMRC in
that booklet are entitled to rely on the guidance, and HMRC must follow
it. The Court found that HMRC's residence guidance in IR20 "was plainly
within the Revenue's powers of providing statements of practice and
identifying how it proposed to deal with the residential status of
taxpayers in particular circumstances". It refused to endorse HMRC's
assertion that IR20 is "no more than guidance" because it cannot bind
HMRC to treat someone as non-resident if they are not. 

Global Rewards Updates

Italy: Clarification of social security tax exemption applicable to
stock options and other share-settled equity awards not subject to tax
at grant


In 2008, clause 24-bis of art.82 of Law Decree no.112 of 25
June 2008 ("Law Decree 112/2008") introduced a new social security
exemption in Italy for "employment income deriving from the exercise of
stock options." As stated in the 2008 legislation, this exemption
applies to shares delivered on or after June 25, 2008, the effective
date of Law Decree 112/2008, pursuant to an employee's stock option
exercise. Since Italian legislation does not specifically define "stock
options," or which awards will be considered stock options, the Italian
Social Security Authority (INPS) published Circular no.123 of 11
December 2009 ("Circular 123/2009") to confirm which equity awards are
eligible for the social security tax exemption. 

Portugal: New Legislation Eliminates Social Security Tax on
Share-Based Awards, Effective January 1, 2011

On September 16, 2009, the Portuguese Parliament adopted a
new Social Security Code ("new Code"), and the President of Portugal, in
accordance with Constitutional requirements, approved the new
legislation. Following the President's approval, the legislation was
published in the official Portuguese journal, and was set to take effect
on January 1, 2010. However, the Portuguese Parliament has recently
amended the effective date of the legislation, which will now come into
force on January 1, 2011. 

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