Submission on Inland Revenue exposure draft

The IoD generally supports Inland Revenue’s draft interpretation statement on the application of schedular payment rules to directors’ fees.

Our submission focuses on specific situations in which tax must be withheld (eg when fees are paid to employees, independent contractors and companies).

We have suggested Inland Revenue consider:

• whether, for payments of directors' fees to employees (eg executive directors), reliance on specification of directors duties in the employment agreement is appropriate (we suggest looking at the reality of the situation)
• including coverage of the wihtholding tax treatment of payments to employees for directorship services in subsidiary companies
• providing an upfront summary and/or simplified version to provide greater access for directors, payers and others.