When the individual is entitled
Non-contractual bonuses are normally income when paid. Contractual bonuses follow the contractual entitlement year; a future condition can delay entitlement until fulfilled. An advance conditional bonus already enforceable is taxable on payment, with a later repayment adjusting income in the repayment year. Director fees approved in arrears are generally earned upon shareholder approval; fees approved in advance depend on rendering the relevant services. Appointment terms can determine monthly entitlement or payment linked to meeting attendance.
Company accrual is a separate analysis
A company normally deducts a payment when its liability arises. IRAS typically accepts properly ascertained accruals for arrears-approved director fees and non-contractual bonuses under the guide’s conditions, including expected payment shortly afterward. Uncertain provisions or amounts not put to the relevant approval are different. Do not assume the employer deduction year and individual taxable year always coincide. Keep approval minutes, employment terms, accrual calculations and payment evidence together; entitlement timing also informs reporting and non-resident director withholding.
Official source
A concise, independent Apex Gateway guide based on the official English source, not a reproduction of the complete document. Consult the original for full conditions, exceptions and subsequent updates.
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