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Tax query

  • 19-03-2010 10:11am
    #1
    demijose
    Registered Users Posts: 32 ✭


    Hi all,

    One of my friends has recently opened a company.

    Is it mandatory for them to hire employees since the work involved is consultancy services and can be done by one of its directors???.

    They have decided to pay this director some fees for his professional services.

    Apart from small expenses relating to the business and the directors fees ..they have decided to treat the rest of the profits as taxable and pay corporate tax on the same.

    Are they following the right path?? is there anything to be done such as registering?

    Thanks in advance for all the replies.


Comments

  • #2
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    Hi

    The director is an employee of the company.

    The company needs to register as an employer as it has to pay PAYE and PRSI on the directors salary. It is illegal for a company to pay directors fees without deducting the appropriate PAYE and PRSI on it.

    The company must also register for corporation tax and file CT1 and pay over the amount of corporation tax due.

    Kind Regards


    dbran


  • #3
    demijose
    Registered Users Posts: 32 ✭demijose


    thnks dbran for the advice.

    The director is already a registered PAYE employee.

    They are concerned only with the second director who is a non eu citizen who is here in ireland on a spouse dependant VISA.

    Any advice on this is highly appreciated.

    Thanks in advance


  • #4
    MartMax
    Registered Users, Registered Users 2 Posts: 1,667 ✭✭✭MartMax


    demijose wrote: »
    They are concerned only with the second director who is a non eu citizen who is here in ireland on a spouse dependant VISA.

    You need to be talking to Dept of Enterprise. or get proper legal advices. The issue is whether an non-EU citizien being a director in Irish company considered taking up an employment. Except in certain circumstances, non-EU citizens must have always in employment with proper permit.

    Anyhow, as what dbran said the company must be registered as employer and operate proper PAYE/PRSI system.

    M.


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