Do you know director is personally liable to company tax?

Director tax responsibility on company tax

Director tax responsibility on company tax

Overview

On 14.03.2019, IRB had issued a public ruling on director liability to explain the liabilities of a company director in respect of the company’s tax under Section 75A of Income Tax Act 1967.

Key takeaway

You will understand the:

  • Meaning of director

  • Liabilities of director

  • Consequences of fail the responsibility as director

  • The directors who are liable with the tax liability

Summary of learning

The meaning of director

*        The person who involved in the management of the company’s business; and

*         Holds at least 20% of company’s ordinary share; or

*         Directly or indirectly through other companies holds at least 20% of company’s ordinary share

Liabilities of director

*         Any tax payable related to Company’s income tax and tax liability + monthly tax deduction

Consequences of fail the responsibility as director

*         Preventing director from leaving the country

*         Civil suit against the company and director

The directors who are liable with the tax liability

*         The director who was appointed during the period of either Form C submitted (within 7 months after financial year end) or Form J issued whichever is earlier

Source
PR 2/2019 Director’s Liability

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