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allowance structures and employee categorisation against statutory thresholds such as the RM1,700 minimum wage and expanded Employment Act coverage. Misalignment between regional compensation models and local Malaysian requirements can create compliance risk across payroll and HR functions. Dezan Shira’s ASEAN Briefing further examines the implications. Hong Kong In Hong Kong, IR56B filing continues to generate a high volume of follow-up actions from the Inland Revenue Department. Common issues include missing director details, unreported fringe benefits, incorrect MPF figures and outdated filing methods, all of which can delay employee tax assessments and increase compliance exposure. The IRD cross-checks employer submissions against MPF trustee data, company registries and prior-year filings,
meaning even small inconsistencies may be flagged automatically. Penalties for incorrect or late submissions can reach HK$10,000, with additional daily fines applied where non- compliance continues. IR56B forms are used to report salaries, directors’ fees and benefits as part of the annual Employer’s Return and directly inform employee tax assessments. Given the link between payroll data and external records, accuracy is essential to avoid downstream tax and reporting issues. China Briefing from Dezan Shira & Associates provides practical guidance on common filing errors and compliance requirements. Cambodia In Cambodia, foreign director appointments can create unexpected work permit obligations depending on how the role is structured within corporate and tax frameworks. Compliance is not determined solely by physical presence, but also by whether a director
is recorded within the company’s patent tax registration. Cambodia applies two independent triggers for work permits: physical work carried out in- country and formal listing as a foreign director in tax records. Once registered within the company’s tax profile, a work permit may be required regardless of location, bringing offshore governance structures into local compliance scope. This distinction is offshore executives are appointed across multiple subsidiaries. Whether a director is classified as an employee or an independent consultant can also affect workforce treatment and regulatory obligations. Careful structuring at the incorporation stage will be key to avoiding unintended exposure. Dezan Shira’s ASEAN Briefing explores the framework in greater detail. particularly relevant for regional holding structures where
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ISSUE 24 GLOBAL PAYROLL MAGAZINE
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