The Irish Minister for Finance today published Finance Bill 2015. Among the proposed measures is a welcome change in the tax treatment of certain travel and subsistence expenses of non-Irish resident non-executive directors ("NEDs").
The Bill proposes the introduction of an exemption from Irish income tax and the universal social charge for payments made by a company to or on behalf of a non-Irish resident NED in respect of expenses of travel and subsistence incurred solely for the purposes of attendance at meetings convened for the conduct of the affairs of the company (e.g. board and committee meetings).
The exemption encompasses travel by car, taxi, bus, rail, boat or aircraft. Irish companies and industry bodies have been calling for some time for a change in Revenue's position on directors' expenses in attending board meetings, noting that the treatment of these expenses as taxable remuneration is both a disincentive to non-resident NEDs from serving on the boards of Irish companies and travelling to Ireland to attend meetings, and an additional cost to Irish companies in seeking international expertise for their boards. The proposal should address these issues and is a welcome development.
The Bill is expected to be signed into law by the Irish President in early December 2015, with the proposed exemption expected to take effect from 1 January 2016.
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