When Do You Need To Declare Your Director’s Fee Received In Your Personal Income Tax Filing?
The annual personal income tax reporting season is nearing. A client was asking me this question last week.
4 Pointers You need to know :
1. Director’s Fees are assessed in the year that a director becomes entitled to the fees.
2. For director’s fees that are approved in arrears (e.g. approved in 2016 after a director has rendered the requisite services for the accounting year ended 31 Dec 2015), the director is generally entitled to the director’s fees on the date the fees are voted and approved at the company’s Annual General Meeting or Extraordinary General Meeting (“AGM/ EGM”).
3. For director’s fees that are approved in advance (e.g. approved in 2016 before a director has rendered the requisite services for the accounting year ending 31 Dec 2016), the director is not entitled to the director’s fees on date of AGM/EGM. Instead, he is entitled to the director’s fees as and when he renders his services for the accounting year ending 31 Dec 2016. For eg, the director would be entitled to director’s fees on a monthly basis if he can enforce the payment of director’s fees on a monthly basis.
Elaborate :
Where the company held:
i. More than one meeting during the calendar year to approve payments of director’s fees for the same accounting year, enter the date of approval of the last held meeting; or
ii. One or more meetings during the calendar year to approve payments of director’s fees for different accounting years, enter the total amount of director’s fees to which the director is entitled to in 2016 and provide the following information as shown in the example below, in a separate sheet of paper:
Example –
Date of approval of director’s fees at the company’s AGM/EGM
For 1st Director’s Fee : 9/1/2016
For 2nd Director’s Fee : 9/1/2016
Director’s fees approved at AGM/ EGM are in respect of services for accounting year ended
For 1st Fee above : 31 Dec 2016 $12,000
For 2nd Fee above : 31 Dec 2015 $2,000
Amount of director’s fees to which the director is entitled to in 2016
For 1st Fee above : $12,000
For 2nd Fee above : $ 2,000
Total Fees entitled in 2016 : $14,000
4. If Section 45 withholding tax has been paid on director’s fees payable to a non-resident director, indicate ‘S45 applied’ against your employee’s designation on the Form IR8A.
Hope above 4 simple pointers clarifies. Otherwise, please raise your queries here, glad to help.
If you need help, feel free to contact us at :
(O) +65 63851011
(M) +65 90880669
