When a Singapore-resident company pays director’s fees to a non-resident director, it must withhold tax at 24% of the gross fee and pay it to IRAS. The deadline is the 15th of the second month after the date of payment. For director’s fees, that is generally the date the fees are approved at the AGM, not the date the money leaves the bank. Withholding applies even if the director never sets foot in Singapore, and even if the fee is paid overseas or not yet paid at all.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This guide is for directors, finance managers and company secretaries of Singapore companies with overseas board members.
When does a company have to withhold tax on director’s fees?
Withholding applies when all three of these are true:
- The paying company is tax resident in Singapore.
- The payment is made to the individual as a board director, not as an employee.
- The director is not tax resident in Singapore for the calendar year. For a foreign director, IRAS generally treats physical presence of fewer than 183 days in the year as non-resident.
IRAS is clear on several points that often surprise boards:
- It does not matter where board meetings were held or whether the director worked in Singapore at all.
- The full fee is subject to withholding, even if the director spent 95% of the time abroad.
- The full fee is caught even if part of it is paid into an overseas account.
- Fees that have been declared but not yet remitted are still subject to withholding.
The rules are on IRAS’s page on tax obligations for non-resident directors. For the wider withholding regime on royalties, service fees and interest, see our complete guide to withholding tax in Singapore.
What rate applies, and on what amount?
The rate is 24% of the director’s remuneration. It was 22% for income due and payable from 1 January 2016 to 31 December 2022.
“Director’s remuneration” covers cash and non-cash payments, including fees, salary, bonus, accommodation provided and stock option gains. Gains from share options and share awards are handled differently: the employer files Form IR21A within 30 days and IRAS issues the director a tax bill.
Business travel costs get some relief. IRAS does not tax the airfare a company pays for a director to attend board meetings. For directors travelling into Singapore on business from 1 January 2016, accommodation and travel and entertainment spent for business are also not taxable. A per diem allowance is not taxable up to IRAS’s acceptable rate, which is S$175 per day for 2026. Keep the travel records, because a “per diem” that is really extra pay is part of the fee.
If the board agrees that the director will receive a fixed amount after tax, the company is effectively bearing the tax. The fee then has to be grossed up, and the withholding is calculated on the higher gross figure. Settle this in the board paper before the fee is approved, so the AGM resolution states the gross fee.
Which date counts as the date of payment?
For director’s fees, IRAS treats the date the fees are voted and approved at the company’s AGM as the date of payment. That date starts the clock, even if the cash is paid months later.
Fees approved in advance are different. If the AGM approves fees for a future financial year, the director has not yet done the work, so IRAS treats the director as entitled to the fees only as the services are rendered. Some private companies approve fees by written resolution instead of at an AGM. Check how the approval was given and record the date clearly, because it drives both the withholding deadline and the director’s personal tax position.
How do you file and pay the withholding tax?
- Confirm residence. Get a schedule of the director’s days in Singapore for the calendar year to date. If they are under 183 days, treat the director as non-resident.
- Confirm the capacity. Separate any board fee from any salary paid under an employment contract.
- Calculate the tax at 24% of the gross fee approved, including taxable benefits.
- Set up Corppass access so the person filing is authorised for withholding tax digital services on myTax Portal.
- File the S45 form on myTax Portal and pay by the 15th of the second month after the approval date. Paper filing has not been accepted since 1 July 2016.
- Keep the Confirmation of Payment (CP) letter that IRAS issues, and send a copy to the director.
- Pay the director the net amount and record the withholding tax as a liability until it is paid.
What if the company files or pays late?
IRAS imposes a 5% penalty if the tax is not received by the due date. If it is still unpaid 30 days after the due date, an additional 1% can be charged for each completed month, up to 15% of the unpaid tax. IRAS can also appoint the company’s bank or other third parties as agents to recover the tax, and can take legal action. These rules are on IRAS’s page on late payment and non-payment of withholding tax.
IRAS will consider a penalty waiver request only if the tax has been paid in full, no waiver has been granted in the past two calendar years, and the company undertakes to pay on time in future. If director’s fees were approved in past years without any withholding, deal with it as a correction exercise rather than a routine late filing. Our article on correcting missed withholding tax through voluntary disclosure explains that route.
Example: an overseas director’s fee approved at the AGM
Example (hypothetical): A Singapore trading company has a director who lives in Jakarta and visits for four board meetings a year. At the AGM on 26 June 2026, shareholders approve a director’s fee of S$40,000 for the financial year ended 31 December 2025. The cash is paid on 20 August 2026.
| Item | Position |
|---|---|
| Director’s days in Singapore, 1 January to 26 June 2026 | 12 days, so non-resident |
| Date of payment for withholding | 26 June 2026 (AGM approval) |
| Withholding tax at 24% | S$9,600 |
| Filing and payment deadline | 15 August 2026 |
| Net amount paid to the director | S$30,400 |
| Hotel and airfare for board meetings | Not taxable if incurred for business and documented |
| Penalty if paid on 20 August 2026 instead | 5% of S$9,600 = S$480 |
The finance team’s common mistake is waiting for the cash date. Here the deadline falls before the money is even sent.
What if the director is also an employee?
Many owner-directors hold two roles: a board seat and an executive job such as CEO or managing director. IRAS treats them separately.
| Board director’s fee | Salary as executive director | |
|---|---|---|
| Withholding tax | 24% if the director is non-resident | Not applicable |
| Who reports it | Company files S45 form; also shown on Form IR8A with the S45 indicator | Company reports on Form IR8A |
| Director’s tax return | Not needed for this income if tax was withheld | Declared by the director (or auto-included) and taxed on assessment |
| On leaving | No IR21 deemed exercise rule for stock options; Form IR21A applies | Tax clearance (Form IR21) applies to foreign employees |
Getting the capacity right starts with the paperwork: a letter of appointment and board approval for the fee, and a separate employment contract for the salary. Our comparison of director fees, salary and dividends covers the wider choice, and our guide to IR8A and the Auto-Inclusion Scheme covers the employer reporting.
What can the director do afterwards?
- No return needed if this is the only Singapore income. If the director gets a tax return or bill anyway, they should contact IRAS and send the CP letter.
- Refund if they turn out to be resident. A foreign director physically present for at least 183 days in the calendar year can file Form B1 with a schedule of days and the CP letters. IRAS then taxes the income at resident rates, offsets the tax withheld and refunds any excess.
- Treaty position. IRAS says it depends on the treaty, but director’s fees from a Singapore-resident company are generally taxable here. Check the specific treaty before assuming it removes the withholding. The director may be able to claim relief for the Singapore tax in their home country under its own rules.
Document checklist
- AGM minutes or written resolution approving the fee, with the date
- Letter of appointment showing the board role and fee basis
- Employment contract, if the director also holds an executive role
- Schedule of the director’s days in Singapore
- Travel, hotel and per diem records for board meetings
- Withholding tax calculation and S45 submission
- IRAS Confirmation of Payment letter
Frequently asked questions
Can the company still claim a tax deduction for the fee?
Directors’ fees appear on IRAS’s list of deductible business expenses. Withholding the tax does not change that. When the deduction falls depends on when the fee is incurred, which our article on accrued directors’ fees and AGM approval explains.
The director waived the fee after it was approved. Is withholding still due?
IRAS says declared fees remain subject to withholding even if they have not been remitted. If a waiver is being considered, document it before the approval where possible, and get advice on the facts if the fee has already been voted.
Our overseas parent company pays the director instead. Does Singapore withholding apply?
IRAS says fees paid by a foreign company with only a Singapore subsidiary are not taxable here, because the foreign company has no Singapore presence. A foreign company with a Singapore branch is treated differently. If the fee really belongs to the Singapore company’s board role, look at who is actually paying and why.
Do we withhold tax on the director’s airfare to Singapore?
No. As a concession, IRAS does not tax airfare paid by the company for a director to attend board meetings. Keep the booking and meeting records.
What if we only find out at year-end that the director stayed 183 days or more?
If the director qualifies as resident for that calendar year, tax already withheld is not lost. The director files Form B1, and IRAS offsets the withholding against tax at resident rates and refunds any excess.
Need help with withholding tax on director’s fees?
Raffles Corporate Services can prepare the AGM or written resolution approving director’s fees, work out the withholding tax, file the S45 form on myTax Portal for your company and prepare Form IR8A. Contact us at [email protected] or on WhatsApp at +65 8501 7133. This article is general information, not tax advice.
Kevin Yeo, Raffles Corporate Services