Getting Ready for the End of the Tax Year, Individuals and Payroll Instruction

The 2018 calendar year is quickly coming to a close, and in many countries, the fiscal year is aligned. Each location has different duties and deadlines relevant for tax filing which can seem daunting to anyone managing global payroll, and it’s important to remember that filing late (or not at all) will result in penalties. To ease the pressure, we’ve created a guide to ensure you stay in-compliance this year in the following countries: US, China, France, Germany and Canada

With the end of the tax year approaching, now is the perfect time to check if your current local payroll solution is the right one for you.

USA

In the US, the tax year ends on December 31. Tax declarations must be made by April 17, 2019

Employer obligations:

Employers must report payroll tax obligates and deposit payroll taxes for the year. Requirements include:

• Federal tax deposits
• Annual Federal unemployment tax return (Form 940 or 940EZ)
• Employer’s quarterly payroll tax return (Form 941)
• Annual Return of Withheld Federal Income Tax (Form 945)
• Wage and Tax Statements (W-2)

Payroll Tax Responsibilities of Employers:

• Payment of employer’s portion of payroll taxes
• Deposit of tax dollars withheld from paychecks
• Preparation of reconciliation reports
• Accounting for the payroll expense
• Filing payroll tax returns.

Employee obligations:

Ensure you have the following documents:

• Your social security/ tax ID number (as well as for your spouse)
• Dependents information
  – Dates of birth & social security/tax ID numbers
  – Childcare records (if applicable)
  – Income of other adults in household
• Sources of income:
  – Form W-2 (employed)
  – Rental Income (Records of income and expenses, Rental asset information, Record of estimated tax payments
  – Retirement income (Pension/IRA/annuity income (1099-R), Traditional IRA basis, Social Security/RRB income (1099-SSA, RRB-1099)
  – Savings & Investments or Dividends (Dividend income 1099-INT, 1099-OID, 1099-DIV, Income from sales of stock or other property 1099-B, 1099-S, Records from property sold, Expenses related to investments, Record of estimated tax payments made (Form 1040ES)
• Other income and loses
  – Gambling (W-2G)
  – Jury duty records
  – Hobby income and expenses
  – Prizes and awards
  – Trusts
  – Record of alimony paid (with ex-spouse’s name and SSN)

China (Shanghai)

In the China, the tax year ends on December 31. Tax declarations must be made by March 31, 2019.

Employer obligations:

Individual Income Tax and Social Insurance are paid monthly to the authorities by employer (partially paid by employer, and partially deducted from employee’s salary). These tax payments must be settled by the 15th of the following month.

Employee obligations:

The annual IIT self-declaration form shall be submitted by employees (often with the help of employers) with one or more of the following criteria by March 31, 2019:

• Their annual income exceeds RMB 120,000
• They earn income from two or more different sources in China
• They earn income that is derived from sources outside of China
• They receive taxable income for which there is no withholding agent
• They meet any other conditions that are specified by the State Council.

For more general guidance see our China payroll guide

France

In France the tax year ends on December 31, but extensions are available for online reporting. Tax declarations must be made by May 18, 2019.

Employer Obligations:

The following reports must be submitted by January 31, 2019:

• Shares & Bik: Expenses and reimbursements paid throughout the year reported in the Annual Declaration of Reconciliation of Wage.
• Declaration Annuelle des Donnees Sociale (DADS): A statement by employers summarising the benefits and total remuneration paid to employees. The declaration must be submitted to the Caisse Régionale d’Assurance Maladie (CRAM)
• Fiche Fiscal/Employee Summary of Earnings: While it is not compulsory to provide the Fiche Fiscal document to employees, employers may do so at their discretion.
• ASSEDIC – Unemployment Social Security Annual Summary: Reports to the Association pour l’Emploi dans l’Industrie et le Commerce detail employees’ unemployment insurance contributions to USSRAF (expatriates submit their reports to GARP).
• URSSAF – The Social Security Annual Summary: Submitted to the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales
• Declaration Nominative Annuelle (DNA): The ‘Annual Nomination Statement’ details the accuracy of wage contributions to benefit schemes. Reports should be submitted to MEDERIC
• Cardif: Reports to Cardif concern employees’ supplemental pension payments. Submissions should be made to Cardif
• Gras Savoye: Detailing medical and life assurance contributions, reports should be submitted to Gras Savoye by the 29th February.

Employee Obligations:

Individuals are must return tax declarations (declaration de revenus) by May 18, 2019 (extension until June 7, 2019 available for online tax return). This form can be found either at your local tax office (centre des impots) or online.

*Missing the deadline will result in a fine of 10 percent of your tax bill.

For general guidance see our France payroll guide

Germany

In Germany the tax year ends on December 31. Tax declarations must be made by May 31, 2019.

Germany requires both monthly and yearly reporting of social security and BiK.

Employer Obligations:

Monthly Reporting Obligations:

• Social Security Statements (Beitragsnachweise)
• Withholding Tax Statements (Lohnsteueranmeldung)

Yearly Reporting Obligations:

• End of February 2019
  – Statutory Accident Insurance (Berufsgenossenschaftsmeldung): Completed and submitted by employer
  – Statement for Disabled Persons

• End of March 2019
  – Social Security Statement (Sozialversicherungsmeldung/DEÜV): Completed and submitted for each employee.
  – Statutory Accident Insurance (Berufsgenossenschaftsmeldung): Completed and submitted by employer

Employee Obligations:

Tax returns are due May 31, 2019, but with a tax consultant the deadline is automatically delayed to December 31, 2019

Canada

In Canada the tax year ends on December 31. Tax declarations must be made by April 30, 2019.

Employers:

By the end of 2018 employers are required to submit report to CRA (Canada Revenue Agency).

• Determine which forms you need:
  – T4: Employment income
  – T4A: Other pensions & annuities
  – RL-1
  – RL-2
• Check for outstanding entries to payroll (manual and void/canceled checks), and update.
• Balance the T4/RL-1 report to your payroll register and validate the earnings and deductions.
• Make sure that you have reported correct social insurance numbers.
• Validate your pensionable earnings
• Report the taxable benefits on each pay (either when received or as used).
• Complete and file RQ summaries
  – Commission de cormes du travail (CNT)
  – Workforce Skills Development and Recognition Fund (WSDRF)
  – Declaration des activites de formation (only for Quebec employers who pay WSDRF)
• File employer health tax returns, workers compensation/CSST annual return, RQ Aunnual summary reports.

Employees:

Employees are required to submit T-4 (end year tax reports) by the last day of February.

Required documents:

• Previous year’s tax return
• Previous year’s notice of assessment
• All personal information
• T4s for employment income
• T3s for trust and dividend income
• T5s investment income
• Universal child care benefit
• Pension income
• Child care payments
• RRSP paid during the year up to the end of February
• Home office expenses
• Charitable donations
• Public transit passes (only applies for before June 2017)
• Medical expenses
• Tuition fees
• Moving expenses for which you were not reimbursed
• Interest on loans paid to earn investment income

For further guidance see our Canada payroll guide

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