IRAS has revised its e-Tax Guide on Tax Treatment of Director’s Fees and Bonuses from Employment on 12 September 2014 as follows:
a. It is clarified that a company may claim a deduction for directors’ fees and employees’ bonuses only when the company’s liability to pay such fees or bonuses arise.
b. Companies are not required to submit any supporting documents/ information with their income tax returns. However, they are required to prepare and retain the following information:
- the date on which the directors’ fees were approved
- the amount approved
- the year in which any unapproved amount is written back (where applicable); and
- the amount of directors’ fees approved in arrears at the relevant AGM but the directors were entitled to them only after the accounting year in which the fees were approved (note: in such case the fees are not allowed as a deduction for the year in which the fees were approved.)
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