Greenvissage explains, What is Moonlighting and why is it becoming a concern for the IT industry?
Post-pandemic, most employers have provided employees with an option to work from home. Working from home has allowed employees to stay safe and healthy while managing their personal life and career from the comfort of home. However, with the freedom and flexibility a new serious concern has grown for the employers – dual employment by employees, commonly referred to as ‘Moonlighting’ by the employers. Of late many employees have been double-dealing with their company, taking advantage of the situation, by accepting offers from multiple companies and working for both companies simultaneously. Employers are achieving this through longer working hours, taking higher pressure for the sake of monetary benefits and higher income. In some instances, employees have been found hiring proxies to complete their work. From the employer’s perspective, this behaviour of employees is a serious concern as Moonlighting is leading to lower productivity levels of such people, and in turn, their teams too. More importantly, the employers are concerned about data and information leakage to their rival companies if such employees are also working for the rival companies. There’s no restriction from the Government concerning moonlight, however, companies usually include clauses in the employment agreement that prohibits them from taking up other jobs that are not freelance. Therefore, concerned companies are opting for a ‘return to office’ policy, as a solution the same.
Greenvissage explains, why are employers asking employees to not check emails while on a vacation in India?
As pandemic-related travel curbs are being lifted, many multinational companies, are requesting their overseas employees vacationing in India to avoid taking office laptops or doing any sort of work while they are in India. While this might sound like caring for the mental health of the employee, the real reason is to save the company from tax litigations. Foreign companies do not have permanent establishments in India. Since they do not operate from India, do not perform their work in India and thereby, do not earn their income in India, they do not pay taxes on such income. However, when an employee carries office laptops or work documents, responds to work emails, or attends video conferences while being in India on a vacation, the company could be forced to pay taxes by the Indian Tax Department. This is because India’s rules on taxation and Permanent Establishment (PE) are strict and attending an official call or replying to an email could result in the levy of taxes on the company. PE, in tax compliance, is a litmus test that determines which country has the right to tax the revenue of the company, based on where the company operates and earns from, amongst various other factors. Often, MNCs work on global projects which the Indian arm of the same entity contributes to. A percentage of the global revenue earned through such projects is usually allocated to India as income earned in India and domestic taxes are levied on the same. However, if employees do not exercise caution as mentioned above, the tax department can dispute this percentage to be on the higher side, and thereby demand higher taxes. The concern in this regard has grown amongst various companies who are now even making their employees and executives sign undertakings that they will not meet clients or potential customers while in India.
Greenvissage explains, why is Japan asking its youth to drink more?
The National Tax Agency of Japan has invited people to submit business plans to promote Liquor consumption in India. According to its website, individuals aged between 20 and 39 can submit business plans to revitalise the liquor industry in Japan. The competition invites entries from across countries. Selected business plans will take part in a final tournament in Tokyo. While this is surely a good programme to encourage enterprenuership, one might wonder why the tax agency is promoting liquor, and promote the same amongst young people. Well, the tax agency has a big tax problem. In Japan, the liquor industry contributes to regional economies and the growth of small to medium enterprises which dominate liquor production in the country. However, Japan’s liquor industry has been on a decline. According to National Tax Agency’s own report, in FY 2020, the tax on liquor comprised only 1.9% of the total tax collection. In comparison, 2010, tax on liquor made up 3.3% of overall tax collections in FY 2010, 3.6% in FY 2000, and 4.1% in FY 1994. Data from last two decades shows that the consumption of liquor has gone down in Japan and thereby, the tax collection as well. The report also notes that there has been a shift in consumption habits, with drinkers preferring low-priced liquor. The pandemic, further led to the decline in the consumption, especially at restaurants, owing to lockdowns. While the country’s economy regained its pre-pandemic levels, concerns remain over its continued recovery. Thus, the Government has come up with the competition amongst various other measures to promote its alcohol industry including online festivals for wine and craft beer, awareness campaigns about local shops, online registry of breweries, etc.
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