Global Compliance: Under the Microscope


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Hear from Mike Pewton, Executive Director Global Compliance, Solium, and Andrew Kagan, Director Global Compliance, Solium, about parent company, local employer and employee obligations at a glance.

For more information about Global Equity's original webinar which featured this presentation, visit the following link:

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  • MIKE
    Make a funny reference to movie commentary disclaimers
    You guys have any disclaimers?
    MARK to say disclaimer as well
  • Parent Company concerns
    Sec laws, exchange controls, big issues

    Employer concern
    Works councils. Employee communications, reporting and withholding (Do they want to be involved? Belgium and Germany, Japan) maybe not)

    Employee concerns
    Tax, what to do FAR,

    Be aware that your plan has implications throughout the organsiation.

  • MIKE

    Tightening up of Foreign Asset Reporting. Cant fit 170 into one slide

    Question: What are companies doing? Employee communications etc? How should companies respond?


    Increased employer reporting and withholding obligations through payroll
    New Zealand - 1 April 2017 employers in New Zealand will be able to apply the PAYE withholding tax rules to employee share scheme benefits
    South Korea – Exit tax 1 July 2016 - S Korean companies that satisfy certain requirements will be required to withhold income tax for expatriate employees on a monthly basis (at a rate of 17%, or 18.7% including the local income tax surcharge) when it pays the service fee to the foreign parent company (before there was no income tax withholding obligation).
    Ireland - on 23 December 2015 the Irish Revenue issued eBrief 119/15, which describes how foreign tax relief may be granted through the PAYE system in cases where there is simultaneous deduction of Irish tax and non-refundable foreign tax at source from the same employment income. Previously, employees in Ireland who are subject to deductions of both Irish and foreign tax have had to make a reclaim at year-end.
    Nigeria - recently, the Federal Inland Revenue Service (FIRS) has intensified its efforts to recover unpaid taxes and enforced compliance with tax law provisions, including withholding tax obligations of employers. 

    An electronic age (online filing)

    - The DADS annual reporting form (companies’ annual wage return) has been replaced by the Déclaration Sociale Nominative (DSN), an electronic reporting form which has to be submitted on a monthly basis.
    the DSN is mandatory for most companies from 1 January 2016 (a transitional period applied for January 2016. Equity plan data has to be included in the DSN under reference S89. The DADS will no longer have to be filed for the tax year 2016 and thereafter.
    - Mandatory electronic filing of income tax returns is to be introduced in France from 1 January 2019 for all taxpayers with internet access following a three-year transition period
    Malaysia - it is mandatory for companies to file the Return Form of Employer (Form E) electronically from the assessment year 2016 onwards. Manual filing using paper forms will no longer be possible.
    UK - All companies in the UK or overseas operating a share plan with UK participants are required to complete an online return for both UK tax advantaged and non tax advantaged share plans by 6 July

    Reporting and streams of information

    Will make information sharing easier between companies and agencies.
  • MIKE

    Global data privacy concerns
    European Union
    Specific Changes
    Turkey - Dedicated data protection and privacy legislation has been introduced in Turkey for the first time in the form of the Data Protection Law which came into force on 7 April 2016. This legislation is based on the EU Data Protection Directive. It’s being introduced in stages with milestone dates over the next two years running up to 7 April 2018.
    Hong Kong - Data privacy is set to be under ever greater scrutiny in Hong Kong during 2016, with the Hong Kong Privacy Commissioner recently giving some indications of the current focus of the Office of the Privacy Commissioner for Personal Data (PCPD) and how much of a priority data security is.
    This will include a focus on implementing section 33 of the Personal Data (Privacy) Ordinance (PDPO) regulating the cross-border transfer of personal data (including consideration as to the impact of developments in Europe regarding the US Safe Harbor agreement) and debate as to whether an explicit “right to be forgotten” (for example, enabling the deletion of personal data held in the public domain) exists in Hong Kong as it does in the EU.
    EU Data Privacy Act
    New EU data protection laws have been approved on 14 April 2016. The new General Data Protection Regulation (GDPR) will become effective directly in all EU countries in the middle of 2018 without the need for prior national implementing legislation.
    The GDPR will deliver significant change to data protection in Europe and will provide a single set of rules across the EU. 
    The key changes include:
    Ease of data subject access requests
    Grounds for processing employee data
    Provision of information to employees - employers will be required to provide a significant amount of information to employees when obtaining their personal data.
    Rights of employees - employees have the right not to be subjected to automated decision-making unless the employee has provided explicit consent
    Tight deadline for notification of data protection breaches
    Enhanced role of the Data Protection Officer (DPO)
    Enhanced governance and compliance
    Easier transfers of data to third countries or international organisations
    Severe sanctions regime


  • MIKE

    Securities laws
    Quick update - In the last 12 months , of the 170 countries we cover 14 (and the EU) have had slight changes in the securities laws.

    Recent Changes

    New Zealand

    Securities laws changes

    The 2016 Exemption came into force on 8 August 2016. The 2016 Exemption extends the application of the Schedule 1 Exclusion and:

    covers offers of financial products to trusts and relatives of employees and other eligible investors;
    covers offers of debt securities (e.g. saving scheme securities) made in connection with the employee share purchase scheme;
    addresses issues with the operation of the 10% limit on the number of equity securities issued or transferred in a 12 month period.

    2016 Exemption: offers of debt securities are subject to the above. In addition, the employee share purchase scheme must also be offered in a specified overseas jurisdiction and the money paid to acquire the debt securities must be held in a separate bank account.

    As of 1 December 2016 issuers will no longer have an obligation to file financial statements with the New Zealand Companies Office.

    New exemptions for overseas issuers

    The Financial Markets Authority (FMA) has approved a series of new class exemptions for overseas issuers. This is on the basis that, when an overseas issuer is subject to regulation in their overseas jurisdiction that is equivalent to New Zealand’s, the costs may outweigh the benefits of full compliance with the Financial Markets Conduct Act 2013 (FMC Act).

    The exemption notices will exempt overseas issuers from various requirements of the FMC Act four main areas:
    Offers by overseas issuers
    Financial reporting and audit
    Securities already issued
    Additional exemptions

    Australia – at the end f 2015, various amendments to ASIC's employee incentive scheme class order relief came into effect


    The filing obligations with the Philippine Securities and Exchange Commission have until now depended upon the number of employees to whom the plan has been offered: for 19 or fewer employees, a Notice of Exemption was advised, whereas for 20 or more employees, a Confirmation of Exemption was recommended (but not required). These filing requirements did not apply to offers to employees who were already shareholders.

    Following the recent changes:

    the Notice of Exemption has been abolished and all filings are now deemed to be Confirmations of Exemption. These continue to be optional but recommended.
    employee stock option plans are now classified as “public offerings of a limited character” and the relevant securities should be available only to the parties to whom the application for exemption refers. Consequently, if new employees join the plan after an exemption filing has been made, a separate filing would need to be made to cover them. It is currently unclear how this requirement would work in practice.

    There is no change to the exemption relating to offers made to employees who are already shareholders.

    Malaysia ?

    What are other companies doing?
    What should you be doing?

  • MIKE

    Exchange Controls


    State Bank of Vietnam have recently issued circular (“Circular 10”) which came into effect on 13 August 2016.

    SBV approval is still required for RSU awards, however it is now technically possible for employers to obtain approval for option plans and some ESPP schemes through the local entity and for employees to purchase shares through the local entity.

    The new circular outlines a specific process for registering the plan with the SBV, a specific definition of the award type and a specific acquisition process including appointing a “legal representative” and setting up a specific bank account through which remittances into and out of Vietnam relating to the plan must be made/received.

    The registration will also trigger quarterly filings to the SBV including all shares acquired and sold and remittances relating to the plan.

    It is still currently quite unclear how some aspects will operate in practice and whether the new provisions will encourage companies to grant share awards.


    June 2016 - Recent legislation has prohibited certain foreign currency transactions and Ukrainian national's ability to obtain National Bank of Ukraine licenses.  On 7 June 2016, the NBU issued a new temporary Resolution (No. 342), which will be in effect until 14 September 2016. According to this Resolution, foreign currency transactions requiring NBU individual licenses will continue to be prohibited and the transfer of funds from the Ukraine is still impractical for employee share plans. 


    With effect from January 1, 2018 Russian exchange controls will permit Russian residents to receive funds from the sale of securities listed either on the Russian Stock Exchange or certain foreign stock exchanges directly into foreign accounts held in OECD or FATF countries with no requirement to repatriate the funds to Russia first. Russian federal law stipulates the foreign stock exchanges to which this relaxation will apply.

    Recent changes in practice and approach
    Streamlined process
    6 weeks
    Standard forms
    Cash plans 
  • Parent Company concerns
    Sec laws, exchange controls, big issues

    Employer concern
    Works councils. Employee communications, reporting and withholding (Do they want to be involved? Belgium and Germany, Japan) maybe not)

    Employee concerns
    Tax, what to do FAR,

    Be aware that your plan has implications throughout the organsiation.

  • MIKE

    And then

    IN view of the change to the withholding obligations scheduled for 2017 in New Zealand are any companies already starting to withholding in anticipation or are companies adopting a wait and see approach.
    Answer "wait and see)
    IN Malaysia I have noted that many companies are issuing an information memorandum. Is this something you are finding in practice?
    Answer no
    With regard to Foreign Asset Reporting, we have heard it is becoming increasingly important. Are you finding that companies are putting this in their documentation as a matter of course?
    ANSWER -Depends
    Overall trends have you noted in terms of plans. More options, Rsus. Matches?
    Answer, more matches globally and increasing use of blocking periods
    Singapore Exit tax is one of the many mobility issues that can be complex to administer. are you finding this is becoming more or less complex and are countries legislating on this.
    ANSWER First Singapore you can avoid the exit if come to an agreement with IRAS and, yes we are finding a lot more legislation around tax mobility

  • Global Compliance: Under the Microscope

    1. 1. September 2016 Mike Pewton, Executive Director Global Compliance, Solium Andrea Kagan, Director Global Compliance, Solium Parent company, local employer and employee obligations at a glance Global Compliance Under the Microscope:
    2. 2. Legal told us to! Disclaimer: This presentation and any following discussion do not necessarily represent the official views of Solium Capital Inc. or its affiliates with respect to any of the issues addressed. Moreover, this presentation is provided for informational purposes only and the information presented and the views expressed by the individual presenters should not be relied on as legal, financial, accounting, auditing or tax advice. The outcome of any individual situation depends on the specific facts and circumstances in which the issue arises and on the interpretation of the relevant literature in effect at the time. Anyone viewing this presentation should not act upon this information without seeking professional counsel and/or input from their advisors.
    3. 3. 3
    4. 4. Agenda September 22, 2016 4 How do these concerns break out? Tightening up Foreign Asset Reporting Increased employer reporting and withholding obligations via payroll EU Data Privacy concerns Securities laws Exchange controls Tax Keep your stakeholders up to speed
    5. 5. How Do These Concerns Break Out September 22, 2016 5 Parent company concerns Employer concerns Employee concerns ▪ How do you identify them ▪ How should you ensure they are acted upon?
    6. 6. Foreign Asset Reporting September 22, 2016 6 Tightening up of Foreign Asset Reporting ▪ Where is this happening? ▫ Canada ▫ Japan ▫ Finland ▫ South Korea ▫ Colombia ▫ Spain ▪ How are authorities responding
    7. 7. Employer Reporting and Withholding Obligations September 22, 2016 7 To withhold or not to withhold Recent changes New Zealand South Korea Ireland Nigeria An electronic age (online filing) France Malaysia Ireland UK
    8. 8. Global Data Privacy Concerns September 22, 2016 8 Specific changes Turkey Hong Kong EU Data Privacy Act Russia (whatever happened to that?) Global approach An electronic age Practicalities
    9. 9. Securities Laws September 22, 2016 9 Recent changes ▪ New Zealand ▪ Australia ▪ Philippines ▪ Malaysia ▪ European Union ▪ Brexit Practicalities
    10. 10. Exchange Controls September 22, 2016 10 Recent changes ▪ Vietnam ▪ Now technically possible to obtain approval for option plans and ESPPs ▪ Specific acquisition process and quarterly filings ▪ Ukraine ▪ Russia ▪ South African Reserve Bank ▪ China
    11. 11. Tax Changes September 22, 2016 11 Rates are always changing- How to keep up? Rate changes ▪ Austria ▪ Malaysia ▪ Luxembourg Tax incident changes ▪ Chile ▪ France (Always) ▪ Korea ▪ Luxembourg ▪ New Zealand ▪ Romania/Sweden (qualified plans) Mobility rules
    12. 12. How Are these Concerns Addressed? September 22, 2016 12 Parent company concerns ▪ Advisers Employer concerns ▪ Parent company ▪ Advisers Employee concerns ▪ Parent company ▪ Local employer ▪ Personal advisers ▪ Communications/specific/translations
    13. 13. Make Sure Stakeholders Are Aware September 22, 2016 13 Legal advisers Administrators Tax advisers Internal departments Legal Tax HR Local employer Employee
    14. 14. Questions? September 22, 2016 14
    15. 15. Contact Information 15 Andrea Kagan US Lead Mike Pewton Executive Director, Solium Global Compliance Thank you for your time!
    16. 16. For More Information September 22, 2016 16