Tag Archive for: Tax tip

New income tax exemption for Irish resident non-executive directors

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Finance Act 2016 introduced an income tax exemption in respect of certain expenses of travel and subsistence of an Irish resident non-executive director of a company.

The expenses must be incurred solely for the purpose of attendance by a non-executive director, in his or her capacity as a director, at a “relevant meeting”.

The exemption applies to expenses incurred on or after 1 January 2017.

Payments to which the exemption applies may not exceed the Civil Service approved rates for mileage and subsistence as set down by the Minister for Public Expenditure and Reform. See details of the current Civil Service Rates for Travel and Subsistence.

Payments which come within the term of the exemption are also exempt from USC and PRSI.

Definitions

“Relevant director”, in relation to a company, means a person holding office as a non-executive director of that company –

  1. who is resident in the State, and
  2. whose annualised amount of emoluments from the office for the year of assessment 2017 and for each subsequent year in which the person is a director of the company does not exceed €5,000.

“Relevant meeting” means a meeting in the State attended by a relevant director in his or her capacity as a director for the purposes of the conduct of the affairs of the company.

“Travel” means travel by car, motorcycle, bus, rail or aircraft.

For more information please contact us.

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Taxation of Exam Setters, Invigilators and Correctors

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With third level exams completed and State Examinations drawing to a close, Revenue has received a number of queries as to whether exam setters, invigilators and exam correctors can be engaged as “self-employed” individuals and paid gross or whether they should be engaged as “employees” with payments to them subject to deductions under the PAYE system.

In their recently published eBrief No. 48/17, Revenue have confirmed that whilst the facts of each case will determine whether an individual is self- employed or an employee, Revenue’s view is that exam setters, exam correctors and invigilators engaged by the State sector, private colleges or associations are, in general, likely to be employees and, therefore, deductions (tax, PRSI and USC) under the PAYE system should be made from the emoluments paid to them.

This is an important clarification for any educational establishment that engages individuals to set, invigilate or correct exams. It places responsibility for correctly deducting tax from payments to these individuals on the employer establishment and means that these individuals must be put on payroll even if they are engaged on an ad hoc basis or for a short period of time.

For more information please contact us.

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