# Appointing non resident director and paying salary



## sandyh2001in (26 Jan 2012)

Is the below something that's possible and legal:
1. Appoint a non resident of Ireland or EU as Director of my Irish limited company.
2. Pay Director fee/ salary to him, similar to how I am paying myself as Director.

How will the taxation work? Wll this fee or salary be deductible fr corporate tax purposes from the company? Will there be PAYE/PRSI/USC to be deducted for the non resident director?

The non resident director will declare this income in country of residence and pay the appropriate taxes there.


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## DBRAN (26 Jan 2012)

Hi

An Irish Company must have at least one director who is resident in the EU. If there is no EU resident director then the company must pay a bond to the CRO for such time as there is no director resident in the EU. Note that is a reportable offence for a company to breach this restriction.

A director of a limited company is deemed to be exercising an office of employment and therefore Irish PAYE must be operated on this salary. It would be very difficult if not impossible to be excluded from this requirement if you are a director.

If the director is resident abroad then he may also be liable to pay taxes in that country and depending on whether or not a tax treaty exists between Ireland and that country taxes paid in Ireland may be set off against taxes due in the other country.

dbran


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## sandyh2001in (26 Jan 2012)

This company already has me as the resident Irish director , Im talking about appointing an additional director who is non resident in Ireland.


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## DBRAN (26 Jan 2012)

Hi

As mentioned there is no problem appointing a non resident director and paying them but Irish tax is due and payable on their salary.

Regards

dbran


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## sandyh2001in (26 Jan 2012)

Thank you DBRAN,

That is understood and also the fact that existence of a double taxation treaty between Ireland and Country X will provide relief to the non resident Director in his tax liability in X, to the amount of tax paid in Ireland.

While operating PAYE on non resident Director, would the same tax slabs apply as they do to residents of Ireland. Example, if a husband and wife are appointed non resident Directors to my Irish company (I am the resident director) , would my company have to withhold PAYE at 20 percent + PRSI + USC upto 65,600 EUR to them? Please confirm?


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## Time (26 Jan 2012)

You withhold whatever Revenue tell you to withhold as per their TDC.


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## sandyh2001in (26 Jan 2012)

Time said:


> You withhold whatever Revenue tell you to withhold as per their TDC.



Dont understand Sorry, what is TDC?

Again, main thrust of my Q is to understand PRSI/USC applicability and Standard Cutoff Point for Directors who are non resident?

Thanks


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## Time (26 Jan 2012)

Tax Deduction Card. It basically tells you what to withhold for a persons pay. 

The standard cut off point will be notified to you by revenue.


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## DBRAN (26 Jan 2012)

Hi

If the director is non resident then there is no PRSI. There will however be USC.

You should seek professional advise on this as it does not appear that you fully understand the Irish PAYE system.

Kind Regards


Dbran


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## sandyh2001in (26 Jan 2012)

Thank you gents, you have given me enough ammo to approach a professional accountant with a proposal for vetting. 

Many thanks DBRAN and Time.


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## sandyh2001in (27 Jan 2012)

Another followup question,
Do foreign , non resident Directors have to make a tax return to Revenue for the Directors fee earned by them? Assume they are non propreitary with ZERO shareholding. 

Reason I ask is that the company will hold back their PAYE/USC and pay it out to Revenue, would that not be sufficient?

If they do have to make a return anyway, would that be on Form 12??


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## DBRAN (31 Jan 2012)

Hi

If they are non proprietary directors then they are not within the scope of the self assessment system and they will not be required to complete a tax return.

Regards

dbran


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