Non-executive directors to be taxed on travel to board meetings.
ISME calls on Revenue to reverse decision.
ISME, Monday 28th July, 2014
ISME, the Irish Small & Medium Enterprises Association, has lambasted the Revenue Commissioners for their latest attempt to make it more difficult to conduct 'normal' business in Ireland. The Association has reacted angrily to the 'guidance note' issued on the taxation of travel expenses for non-executives attending board meetings.
ISME Chief Executive, Mark Fielding stated, "Many SME limited companies have non-executive directors to assist and guide them in the many facets of business encountered on a daily basis. The idea that the modest travel expenses they might be paid as directors are to be subject to tax is going to make finding good directors even more difficult".
"Director's fees and emoluments (as auditors like to call them) are classed as income and are therefore subject to the normal tax laws. But a tax on legitimate travel expenses for a director is a tax on good governance and proper oversight. It is also an attack on attracting top quality advisors to a business, at board level."
"As the obligations on directors become more onerous, finding people to serve on a company board, often pro-bono in a company's early years, will become more difficult. Without a doubt more potential directors will be of a mind, when they see that they're being taxed to go to board meetings, to say 'I couldn't be bothered'."
The Association called on the Revenue to immediately reverse the 'guidance note' and allow normal business to be transacted without the added burden of tax on minimal travel expenses. "The Revenue Commissioners do not give any context as to why they have changed their position, but at ISME it's clear to our members that this change does not help make Ireland 'the best little country in which to do business'," concluded Fielding.