Singapore - Retrospective Director Fee Declaration

[vijsrinp]

Dear Expert,

As director of a company, can we make a payment to personal account first and then retrospectively record this as Directors Fee voted during AGM at a later time. Both events happen during the same Basis Year for tax purposes?

Thanks in advance
Vijsrinp

[Strong Eagle]

No. Your corporate records must reflect that directors fees were agreed to before they can be paid or you are in violation of the law.

Directors fees are considered income to the director on the date on which they were authorized, regardless of when the fees were actually taken/paid.

Frankly, it makes no sense to take fees without having the proper records. For a small firm where you are the sole shareholder (or one of just a few), it is common practice to 'catch up' at the end of the year, ensuring that all corporate docs and resolutions reflect the actual transaction status of the company.

But, the point is... if directors fees were paid on Jan 31, the written resolutions must reflect that directors fees were authorized to be paid on Jan 31, and obviously the AGM or EGM must have occurred before that time.