Employment and Labour Rules

Canada: The province budget 2017 for Quebec delivered

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The Finance Minister and the Economy of Quebec presented the province budget 2017 on 28th March 2017. It provides for no changes in income taxes, taxes or rates. The main tax amendments contained in the budget include the tax burden reduction in case of individuals by decreasing or eliminating the health tax, together with an instant general tax reduction by increasing the basic tax credit available to individuals. It was predicted that the compensation tax for financial organizations would be abolished from 31st March 2019 and this will be extended by five years, until 31st March 2024. The 10% increased additional deduction rate applies from 29th March 2017 in case of small and medium-sized enterprises (SMEs) that carry out their activities in the “special remote area”. Previously, the rate was 7%. Few changes will also be made in respect of tax holiday, that is, an application for a primary qualification certificate for the determinations of the tax holiday has to be made until 31st December 2020 and a new election will be announced to allow two large investment projects ran by a corporation to be considered together. These changes applies from 29th March 2017.

Canada: The Federal Budget 2017 announced

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The Canadian government presented the 2017 federal budget on 22nd March 2017 in Ottawa. The main highlighting points of this budget are given below:

  • The budget dedicates $11.2 billion to cities and provinces for affordable housing over 10 years as part of the second wave of the government’s infrastructure program, $5 billion of which is to encourage housing providers to pool their resources with private partners to pay for new projects;
  • The budget still doesn’t include any plans to balance the books;
  • Statement on gender equality and a discussion of the ways in which the government has run its policies, and its spending commitments, through a gender-based analysis;
  • Some budgets allocate for indigenous communities;
  • Despite calls from the United States for Canada to increase its contributions to international military efforts, there is no increase in defense spending in the 2017 budget;
  • Excise duty rate on cigarettes goes from $21.03 up to $21.56 per carton of smokes and the duty rate for alcohol goes up to 2%. Both will be adjusted every April 1 starting next year, based on the consumer price index;
  • Canadian exploration expense in case of oil and gas wells
  • Budget 2017 proposes that expenditures related to drilling or completing a discovery well generally be treated as a Canadian development expense (30% depreciation rate) instead of a Canadian exploration expense (eligible for a 100% deduction in the year incurred). This measure will generally be applicable to expenses incurred after 2018 and expenses incurred in 2019 that could have been considered to have been incurred in 2018 because of the “look-back” rule.
  • Reclassification of expenses renounced to flow-through shares
  • The Income Tax Act recognizes two forms of control of a corporation: de jure (legal) control and de facto (factual) control.
  • Timing of recognition of gains and losses on derivatives
  • Extending the base erosion rules to foreign branches of life insurers
  • The public transit tax credit, which allows the cost of transit passes to be deducted, is being eliminated effective July 1.
  • Employment insurance premiums are going up 5% to $1.68 per every $100 of insurable earnings, up from $1.63.

Hungary-Amendments to the Tax law amendments adopted by the parliament

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The amendments to the Hungarian Tax Law submitted by the Minister of Economy of Hungary were accepted on 12 December 2016 without any major modifications. According to the adopted Tax Law the new tax measures are as follows:

Tax Measures

Previous rate

Current rate

Main corporate tax rate



KIVA tax rate



Social security tax rate



Health care contribution



These new tax measures are effective from 1 January 2017.

Hungary-amendments to the Tax Law submitted to the parliament

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The Tax amendments announced by the Minister of Economy of Hungary were submitted to the parliament on 5 December 2016. According to the proposed amendments the corporate income tax rate will be reduced as the current progressive rates of 10% and 19% will be replaced with a flat rate of 9% from 1 January 2017.

Accordingly the effective rate applicable to CFCs will be reduced from the 10% to 9% effective from 1 January 2017.

The rate of small business tax (KIVA) will be reduced to 14% from current rate of 16% and this replaces the corporate income tax, social security tax and vocational training contribution. This rate of KIVA will further be reduced to 13% as from 2018.

The social security tax rate will be reduced to 22% from current rate of 27% from 1 January 2017 and this will further be reduced to 20% from 2018.

Also, the health care contribution will be reduced to 22% from current rate of 27% applicable from 1 January 2017 and this will further be reduced to 20% from 2018.

Argentina- extended employment promotional regime

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Decree No. 1,801/15 was published in the Argentine Official Gazette on 8 September 2015. By means of the Decree the Argentine Government has extended the Employment Promotional Regime (that initially expired on 30 July 2015) for a further period of 12 months starting from 1 August 2015.

The extended regime will not be applicable to those employers who are listed under REPSAL (Registro Público de Empleadores con Sanciones Laborales, employers that have been liable for certain labor penalties under specific circumstances).

Kazakhstan: President signs a Law on pensions

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The President has signed a law on 4th August 2015 to amend the process of obligatory pension contributions and budget funded state pension payments. The main amendments are given below:


Employers are obliged to withhold from salary and pay the pension contribution at 5% of the employee’s salary from 1st January 2018. The present pension contribution is set at a rate of 10% of the employee’s salary.


After reaching the retirement age of 63 for men and 58 for women, State pension will be paid to individuals by the fund financed from the budget. It will be effective from 1st July 2017. The pension amount depends on how many years the individual was officially employed and contributed to the pension fund. At present it is calculated on the basis of the mean employment income over a certain period of years.

Austria: Parliament and Federal Council approve Tax Reform Act 2015/16

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The parliament (Nationalrat) and Federal Council (Bundesrat) approved the “Tax Reform Act 2015/16 (Steuerreformgesetz 2015/16)” with minor changes on 23 July 2015.