The Latest News on Coronavirus, EMA Focus and Brexit Consequences
Finland; China
Guidance on outward expatriate regime and coronavirus – issued in Finland
According to the 6-month rule, employment income earned abroad may be exempt in Finland in certain circumstances
On 3 February 2020, the tax administration issued its opinion regarding the application of a so-called 6-month rule for outward expatriates whose employment is affected by coronavirus.
According to the 6-month rule, employment income earned abroad may be exempt in Finland in certain circumstances. One of the conditions is that the stay abroad for reasons of work must be at least 6 continuous months. Moreover, the employee may not stay in Finland while working abroad for more than 6 days per month.
This days of stay requirement does not apply (i.e. the work abroad is not considered to be interrupted) if the taxpayer stays in Finland for an unforeseeable reason beyond his control and that of his employer and if the taxpayer returns to the state of employment after such stay to continue to work there. It is also possible that working abroad will end earlier than expected for such a compelling reason.
The tax administration takes the view that coronavirus is such a compelling reason as the Ministry of Foreign Affairs has on 31 January 2020 issued a statement advising Finns not to travel to certain areas in China. Generally, the compelling reason applies only in work done in the areas mentioned in the statement by the Ministry of Foreign Affairs, those being currently Hubei, including the city of Wuhan. A compelling reason also exists if the air traffic between Finland or Europe and China is interrupted. In the latter case, the compelling reason may cover also other areas than the ones mentioned in the statement by the Ministry of Foreign Affairs.
If the stay in Finland exceeds the day limit, the tax administration emphasizes that the income exemption under the 6-month rule does not apply for work done in Finland during that time, unless the work is restricted to normal reporting duties which can last maximum a couple of days.
the Netherlands
Post-Brexit move to Amsterdam is done: EMA renews rare disease focus
The agency works with an annual budget of €317 million and employs 780 people
The new Dutch headquarters of the European Medicines Agency (EMA) opened for business last month – two years after the European Union decided to move EMA to the Netherlands in the wake of Brexit.
This means that the EMA, which turned 25 on January 26, could return to a business focused on promoting effective medical treatment, especially for the approximately 25 million patients with rare diseases that live within the EU.
The agency works with an annual budget of €317 million (about $350 million), it employs 780 people, with the largest number of employees from Italy, Spain and France.
Violeta Stoyanova, MD, chairs the EMA’s Committee for Orphan Medicinal Products (COMP). In 2000, EMA established the committee – one of seven – to evaluate applications for orphan prescription drugs for rare diseases.
To qualify for orphan designation, a medicine must intend to treat, prevent, or diagnose a disease that is life-threatening or chronically debilitating. In addition, the prevalence of the condition among the EU’s 27 member states cannot exceed five in 10,000, or it must be unlikely that sales of the medicine would generate sufficient returns to justify the investment needed to develop it.
“In 2000, the European Commission approved specific legislation meant to incentivize development of drugs for rare diseases, since this is not an attractive market for pharma companies,” Stoyanova said.
UAE
UAE: Expat Husbands Get New Work Opportunities
The wife is what you would call a sponsored dependent, so she’s not sponsored by her husband’s employer. She’s sponsored by her husband
The new policy of the United Arab Emirates (UAE) extends to expat husbands work-permit options that have long been available to expat wives. “It has only been possible for a wife, who is sponsored by her husband for residency visa purposes, to obtain a work permit,” said Ruth Stephen, an attorney with Pinsent Masons in Dubai, UAE. “The other way around has never been possible until now.”
In July 2019, the UAE Ministry of Human Resources and Emiratisation expanded the opportunities for dependents to obtain work permits in the UAE.
To work in the UAE, an individual must have two documents: a residence permit, which allows a person to live in the country, and a work permit card, which gives a person the right to work.
If a man has a job in Dubai and comes to work from abroad, his employer sponsors his residence permit and work permit. His wife’s residence is funded by her husband.
“The wife is what you would call a sponsored dependent, so she’s not sponsored by her husband’s employer. She’s sponsored by her husband,” Stephen said. “But separately, if the wife is going to get a job in the UAE, she also needs the work permit, because up until that point she’s only got the right to reside, not the right to work.”
Sponsored female dependents are free to apply for a work permit, and the employer pays only the labor card, not the residence permit. However, until recently, male dependents were not allowed to obtain work permits when they lived in the UAE under the auspices of their wife.
“In the past, if you’re a husband whose visa is under the sponsorship of the wife and you would like to work, you would need to cancel your visa from your wife and get an employment visa under the sponsorship of the company,” said Florabel Bautista, department head of immigration services at Sesam Immigration, which has offices in Dubai and Abu Dhabi, UAE.
Brexit
Brexit: Decree clarifying 2020 tax consequences of withdrawal agreement gazetted
In Official Gazette No. 6891 of 30 January, Decree No, 2020-20786 of the State Secretary for Finance of 29 January 2020 was gazetted clarifying the tax consequences of the Brexit withdrawal agreement for 2020.
The Decree clarifies that for both direct and indirect taxes the United Kingdom will still be treated as an EU Member State. For Dutch domestic law this has, amongst other things, the following consequences:
- EU residents earning 90% of their income from the Netherlands will for the entire tax year 2020 still be treated as qualifying non-residents, who are taxed as resident taxpayers;
- EU residents who meet the requirements of the employment credit and the income dependable combination credit remain for the entire tax year 2020 entitled to the income tax part of this credit;
- employers established in the Netherlands may for UK employees for the entire tax year 2020 use the wage tax provisions on the high tax rate for non-identified employees (anoniementarief) and the identification obligation;
- UK crew members employed on ships sailing under the Netherlands flag remain entitled to the 40% wage tax payment reduction for the tax year 2020;
- the wage tax payment reduction for R&D activities will also apply to activities carried out in the UK for the tax year 2020;
- the application of the participation exemption will remain unchanged for taxpayers with a qualifying participation in a UK company for the entire tax year 2020;
- the application of the fiscal unity regime will remain unchanged for fiscal unities with a top or intermediary holding in the UK for the tax year 2020;
- an employee resident in the Netherlands who is employed by an employer resident in the UK is with respect to the avoidance of double taxation deemed to be subject to tax in another state for the entire tax year 2020. This rule, included in article 38(2) of the General Tax Act, applies if employment for a continuous period of 3 months is exercised in a country with which the Netherlands does not have a tax treaty;
- with respect to the preserving assessment imposed if an individual emigrates to the UK for the tax year 2020 no guarantee has to be provided;
- a payment in instalments regarding the exit tax imposed when an individual or company emigrates remains for the tax year 2020 also possible for residents of the UK.
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