LEGAL UPDATES FOR JANUARY EMPLOYMENT

Transcription

1 LEGAL UPDATES FOR JANUARY EMPLOYMENT Royal Decree 742/2016 of 30 December setting the interprofessional minimum wage (Salario Mínimo Interprofesional) for 2017 entered into force on 1 January this year. Such minimum wages are as follows: - Annual minimum wage: EUR 9, Monthly minimum wage: EUR Daily minimum wage: EUR Minimum wage for casual and temporary employees whose employment in the same entity does not exceed 120 days: EUR per legal working day of activity - Minimum wage for domestic workers: EUR 5.54 per hour Pursuant to the Royal Decree, these amounts shall generally not apply to the collective agreements valid at the time of its entry into force (1 January 2017) which use the minimum wage as a reference to determine the sum or increase of basic salaries or allowances. Thus, the amounts set forth in the Royal Decree shall only apply to such collective agreements where agreed between the parties thereto and/or when the salaries established in a particular agreement are collectively lower than the annual minimum wage in force for 2017 (EUR 9,907.80), which shall be increased as required to ensure the payment thereof. In its judgment no. 1023/2016 delivered on 1 December, the Supreme Court amends the criteria for accepting the option to deliver payslips to employees via electronic means The question raised has been used to resolve whether a unilateral decision by the company in question to replace the delivery of payslips in traditional paper format with electronic payslips is lawful. In the case heard before the High Court, employees are now required to use machines located next to the drawers where the paper payslips were formerly left for them to retrieve. By introducing their National Identification Document (DNI) number and password into the machine, they are able to access their payslip. The conclusion is that the foregoing fulfils the purpose and requirements of the Order issued on 27 December 1994 and article 29.1 of the Spanish Workers' Statute with regard to guaranteeing that employees shall receive a copy of the receipt stating their earnings and that they are able to

2 acknowledge having received such information, thus maintaining transparency in view of the various concepts under which amounts are paid and withheld. Lastly, the judgment stipulates the following with regard to any possible damages caused to the employees: "A change from paper-based payslips to electronic ones does not entail any damage or inconvenience for the employees. In essence, where they previously received their payslips in the drawers made available to each employee, they now use an electronic machine located in the same area. Whereas they previously extracted the payslips by opening the drawers with a key, they now introduce their DNI and password into a machine. The fact that the employees have to select the "print" option and wait a few seconds for it if they require a hard copy of their payslip cannot be classed as burdensome." The Court also acknowledges that this judgment represents a change in the case law established in its judgment delivered on 22 December 2011 which recognised the right for pilots working for «Air Europa, Líneas Aéreas SA» to receive their payslips in paper format. Nevertheless, such change is justified by the need to align to the current reality and the tendency in both the private sector and public authorities to use electronic means. ce= &links=&optimize= &publicinterface=true Increase of social security contribution basis on 1 January 2017: the maximum limits are increased by 3%, and the minimum limits that are linked to the interprofessional minimum wage by 8%. Pursuant to the Royal Decree-law 3/2016 of 2 December setting tax measures aimed at consolidating public finances and other urgent employment measures, the maximum contribution basis for Social Security purposes are increased by 3% for Regarding the minimum threshold, it shall also be increased as long as the interprofessional minimum wage has been raised for In particular, the minimum wage was increased by 8% as set out in Royal Decree 742/2016 of 30 December and, therefore, the minimum contribution basis, which are connected to the minimum wage, shall be also increased by 8%. Considering that the Spanish General Budget Law (Law 48/2015 of 29 October) for 2016 has been extended to 2017, the percentages referred will be applied to the bases announced in this Law (article 115) and in the Order of the Employment and Social Security Ministry ESS/70/2016 of 29 January implementing the provisions of the Law 48/2015 of 29 de October. For the calculations of salary slips of January, ADP has made an estimation of the new maximum and minimum contribution basis for 2017 having in mind the percentages of increase already published. The amounts of the contribution basis that we are using will not be definite until they are officially published. Thus, they are provisional basis that may be subject to changes when the final basis are published. In the case that the provisional basis are not equal to the definite ones, it will be

3 necessary to recalculate the pay slips to make the appropriate contributions to Social Security, which may involve a slight change in the net salary already received by the employees. *** LEGAL UPDATES FOR JANUARY TAX Approval of Royal Decree-law 3/2016 of 2 December adopting taxation measures aimed at consolidating public finances and other urgent employment measures. Royal Decree-law 3/2016 of 2 December adopting taxation measures aimed at consolidating public finances and other urgent employment measures entered into force on 3 December 2016 (with the exception of article 6 - "Amendment to the General Tax Act 58/2003 of 17 December" -, which entered into force on 1 January 2017). Among others measures, the removal of the option to defer or pay certain tax obligations in instalments is of note. In particular, the exception permitting such deferrals or instalments of withholdings and prepayments has been abolished. Moreover, in relation to the foregoing, requests to pay urgent debts in kind shall no longer be accepted. New taxpayers to contact the Tax Authority online The State Tax Authority has issued a memorandum on the new taxpayers obliged to contact the Authority online in view of the entry into force on 2 October 2016 of the Common Administrative Procedure of Public Authorities Act 39/2015 of 1 October. In particular, the aforementioned Act obliges traders and professionals whose settlement period coincides with the calendar month (large enterprises, VAT groups and those registered in the Monthly VAT Reimbursement Register) to execute all correspondence with the Public Authorities via electronic means, without prejudice to the exceptions foreseen in current legislation (provision of original bank guarantees, notary documents, legal deeds, etc.). A failure to fulfil this obligation may be considered an infringement under article 199 of the General Tax Act 58/2003 of 17 December, establishing the imposition of a set fine of EUR 250.

4 r/nuevos_sujetos_obligados_a_relacionarse_electronicamente_con_la_agencia_tributaria Ley_39_ 2015_.shtml Approval of the 2017 General State Administration non-business day calendar. On 30 December 2016 a Resolution adopted on 27 December 2016 by the Secretary of State for the Civil Service was issued establishing the 2017 General State Administration non-business day calendar for the purpose of determining deadlines. Approval of the 2017 taxpayer's calendar. The State Tax Authority has published the 2017 taxpayer's calendar. macion_institucional/calendario_contribuyente/2017html/calendario_contribuyente_2017_es_es.p df Publication of the table outlining the types of withholdings and prepayments under the concept of Personal Income Tax for the 2017 fiscal year. As in previous years, the State Tax Authority has published a table outlining the types of withholdings and prepayments under the concept of Personal Income Tax applicable in 2017, including employment income, trading income, capital gains, investment income and rental income. Moreover, for each type of income or concept the aforementioned table also indicates the annual summary form to be included in the declaration (190, 193, 194, 196, 180, 187 and 188) and the corresponding reference codes. macion_institucional/campanias/retenciones_trabajo_personal/2017/cuadro_tipo_retencion_2017.pd f

5 Amendment of Order EHA/3127/2009 of 10 November approving form 190 used for the submission of the annual summary of withholdings and prepayments on account of the Personal Income Tax charged on employment and trade income, awards and certain capital gains and allocations of income, as well as the amendment of other tax laws. Order HAP/1626/2016 of 6 October, amending Order EHA/3127/2009 of 10 November approving form 190 used for the submission of the annual summary of withholdings and payments on account of the Personal Income Tax charged on labour income, business activity income, awards, certain gains and imputed income from real estate, amending also other tax laws, was published in the Official State Gazette on 11 October The Order entered into force on the day following its publication, i.e. 12 October 2016, being applicable for the first time to the submission of annual summaries (forms 190) corresponding to fiscal year Among others, the purpose of the Order is to finalize and improve the required alignment to the tax reform under Law 26/2014 of 27 November amending the Personal Income Tax Law 35/2006 of 28 November, as well as to incorporate certain amendments regarding the withholding rates applicable to business activity income. Please find below the main amendments introduced by Order HAP/1626/2016, of 6 October, all referred to form 190 applicable in the Spanish common territory: Key A. Labour income: employees for general purposes Subkeys 01 and 02 have been eliminated (as of fiscal year 2016, payments related to labour incapacity as well as the remaining payments are regrouped again under key A). For distinction purposes: - a new box is created ( Payments related to labour incapacity ), which includes those payments related to labour incapacity directly paid to the employee - the box Cash payments is renamed into Cash payments not related to labour incapacity ; and - the box In-kind payments is renamed into In-kind payments not related to labour incapacity. Key B. Labour income: pensioners and benefit recipients and other remunerations included in article 17.2.a) of the Personal Income Tax Law - Subkeys of key B has been reorganized from four to three (subkey 04 - Other payments different from the foregoing - has been eliminated). - Regarding subkey 01, a new box is created ( Payments related to labour incapacity ), including those payments related to labour incapacity directly paid by one of the public

6 regimes of Social Security Authorities or, where appropriate, Social Security collaborative entity. Key G. Business activity income: professional activities - Subkey 04 disappears (it included those payments subject to the withholding tax rate applicable until July ). Other news As a consequence of the abovementioned amendments, the following modifications have also been introduced: - The description of the box Additional Information has been modified as follows: Additional Information (only applicable to the following keys: A, B.01, B.03, C, E.01 y E.02). In this regard, references to subkeys B.02 and B.04 disappear. - The content of the box Fiscal Year has been updated by including a reference to the boxes referred to payments related to labour incapacity. - The first paragraph of the box Deductible Expenses has been modified as follows: Only applicable to payments included in keys A, B.01, B.03, C, E.01 and E The box Geographic mobility-acceptance in 2014 has been removed since it is no longer applicable as of 1 January Draft Order approving the forms for Personal Income Tax and Capital Gains Tax declarations for the 2016 fiscal year. The Draft Order approving the forms for Personal Income Tax and Capital Gains Tax declarations for the 2016 fiscal year determines the place, form and deadlines for the submission of such forms, how to obtain, amend, confirm and submit the draft Personal Income Tax declaration as well as the general conditions and procedure for online or telephone submission. mativas/normas_tramitacion/modelos_irpf_p/proy_om_irpf_2016.pdf Application of the new setoff limit for income and capital gains and losses from taxable savings.

7 The Personal Income Tax reform approved by Act 26/2014 of 27 November (in general force from 1 January 2015) amended the regime for the setoff of income on taxable savings, permitting the set off of income generated from investment income with capital gains up to a limit of 25% of such positive balance. Nevertheless, said limit shall not apply until 2018, given that the Twelfth Additional Provision of the Personal Income Tax Act 35/2006 of 28 November had already established percentages of 10, 15 and 20 for the 2015, 2016 and 2017 fiscal years respectively. Thus, with regard to 2017, the setoff limit for income and capital gains and losses from taxable savings is set at 20%, an increase from the 15% figure applied in *** We remain at your full disposal should you require any further information or clarification. Kind regards, ADP Employer Services Iberia