Insights From the FMco Team

Revenue sets out its position in relation to Directors’ remuneration

The Revenue Commissioners have recently issued a tax briefing clarifying their position and setting out their views on the tax treatment of director’s remuneration arising from holding an “office” with an Irish company. A director of a company is an office holder for this purpose.

Individuals who are directors of two or more companies and non-resident directors of Irish companies need to ensure that they are being taxed correctly following this clarification. The briefing by way of example indicates a situation where an individual is a director and non-executive director of 15 companies. In this scenario the individual should [under the PAYE system] receive remuneration from holding such “offices” from each company separately. The individual could not avoid this situation by invoicing each company individually through a consultancy firm for example.

The briefing clarifies that non-resident directors of Irish incorporated companies who receive remuneration from the public office of a directorship are subject to income tax under the PAYE system. In certain circumstances relief from Irish income tax may be relieved under the terms of a double taxation agreement, however one such director should satisfy the Revenue Commissioners directly that a relevant double taxation agreement is appropriate.

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