Tax reforms across various countries are significantly impacting expatriates in 2024.
Country Tax Updates
One of the most notable updates is in Argentina, where the new government has repealed 2023 tax reform and expanded the scope of individual taxation. This change increases taxes for lower-income earners while decreasing taxes for higher earners.
In Bangladesh, a new voluntary Universal Pension Scheme (UPS) was launched, targeting private-sector employees. The UPS is a major step toward improving social security for over 100 million workers who previously had no pension access.
The Republic of Srpska in Bosnia-Herzegovina has introduced a new penalty assessed on both employees and employers for failure to register employees prior to assignment commencement.
India passed a Finance Act in August that is retroactive to April 1, 2024 with adjustments to the standard deduction and tax brackets.
In Iraq, the government has reformed the social insurance pension program, capping contributions for both employees and employers at five times the minimum wage. Employers hiring foreign nationals are now required to pay a significant registration fee, adding new costs for expat employers.
Meanwhile, Pakistan introduced a 10% surcharge on individuals earning more than PKR 10,000,000, increasing the overall tax burden on high-income earners.
In Zimbabwe, the introduction of a gold-backed currency, the ZWG, necessitated adjustments in tax brackets, though the top marginal rate remains at 40%.
Stay Informed!
These tax updates mean global mobility programs and expatriates should carefully review their financial strategies in the relevant countries. Whether dealing with increased social security contributions in Argentina or new pension opportunities in Bangladesh, expatriates should stay informed and consider consulting with a tax advisor to ensure compliance and understand their tax obligations.
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How Can the AIRINC International Tax Guide Help You?
Income tax is often the largest cost item in an international assignment. An accurate determination of hypothetical and gross-up taxes is essential to the design of equitable expatriate compensation packages. It is particularly important to determine employees’ contributions to their worldwide tax obligations.
The International Tax Guide:
- Offers statistical income tax and social tax models for over 280 countries and tax jurisdictions; the models are reviewed and updated at least once annually by our professional in-house tax team to account for tax law changes
- Delivers accurate calculations for a variety of scenarios (e.g. commuter or homeowner/renter assumptions), and allows additional customization to client specifications
- Provides fast access to hypothetical or gross-up tax calculations in either an individual report (for a specific assignee) or a table (for a group of employees)
- Can easily connect to external platforms using APIs and batch reporting capabilities, as well as create a variety of importable report formats for use in partner systems
- Comes with detailed documentation, including step-by-step calculations and a supplemental Expat Tax Summary containing comprehensive information about a given country’s tax system
