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Directors’ fees
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Directors’ fees
Hi everybody,
Another issue which is not clear for me is Directors’ fees, according to "Panel Decision 3", Directors’ fees is subject to GST under certain conditions (person appointed as a director: in his personal capacity, on his expertise, on his personality)
So open questions will be:
1. If Directors’ fees is subject to GST, whether those directors which fall under this category have to register them self with Custom if their Director fee is more than RM 500,000 / year?
2. If a director from those certain groups make less than RM 500.000 / year, is Directors’ fees still taxable under GST or not?
3. If directors are registered with Custom, will they issue to company any tax invoice
4. Can company claim such GST paid on director's fee.
Anybody to share opinion on this matter?
Another issue which is not clear for me is Directors’ fees, according to "Panel Decision 3", Directors’ fees is subject to GST under certain conditions (person appointed as a director: in his personal capacity, on his expertise, on his personality)
So open questions will be:
1. If Directors’ fees is subject to GST, whether those directors which fall under this category have to register them self with Custom if their Director fee is more than RM 500,000 / year?
2. If a director from those certain groups make less than RM 500.000 / year, is Directors’ fees still taxable under GST or not?
3. If directors are registered with Custom, will they issue to company any tax invoice
4. Can company claim such GST paid on director's fee.
Anybody to share opinion on this matter?
Edin- Posts : 11
Join date : 2015-01-02
Re: Directors’ fees
Any person whose annual taxable turnover exceeds RM500,000 is liable to be registered for GST purpose.
It is important to differentiate whether the director is under contract of service or contract for service.
Contract of service
- under employment and entitled to EPF, SOCSO, annual leave etc
- due to his position as the company’s manager, became a director (executive director) of the same company or its subsidiaries - not subject to GST
Contract for service
- acting as independent contractors
- normally acting as non-executive director
- is carrying on a business
- subject to GST if annual taxable threshold exceed RM500,000
- this Director must issue a Tax Invoice to the company for the company to claim Input Tax credit
It is important to differentiate whether the director is under contract of service or contract for service.
Contract of service
- under employment and entitled to EPF, SOCSO, annual leave etc
- due to his position as the company’s manager, became a director (executive director) of the same company or its subsidiaries - not subject to GST
Contract for service
- acting as independent contractors
- normally acting as non-executive director
- is carrying on a business
- subject to GST if annual taxable threshold exceed RM500,000
- this Director must issue a Tax Invoice to the company for the company to claim Input Tax credit
joseph- Posts : 277
Join date : 2014-09-25
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