Annual Directors Return Checklist For A Smoother Deadline

Directors who own more than 15% of the share capital of an Irish Limited Company (AKA proprietary directors) need to file a directors income tax return. This is the case even if you do not take money from the company – directors with no income are required to file nil returns for the company.

The director’s tax return declares a director’s personal income, including income from their company (salary and dividends), rental or foreign income.

In general, non-proprietary directors are exempt from filing director returns in Ireland. If you need help filing your tax returns, talk to our Client Services about getting a quote for our accountancy services.

All Irish resident and non-resident proprietary directors are legally required to submit a director’s tax return by the 31st of October each year.

This can be extended to mid-November if you use Revenue’s Online System (ROS) to pay and file the tax return.

Revenue generally extends the pay & file deadline to mid-November, meaning businesses have additional days to make the appropriate tax return and payment online.

The only downside is that you must ensure you can file and pay on or before this date. The extension only applies if you can complete both at the same time.

Filing director’s returns in your first year after incorporation

You don’t have to file a director’s return in your first year as a company director. Your return is based on the previous year’s income earned as a director.

Instead, you will file your first return in October of your first full year as a company director.

For example, if you incorporate your company in February 2023, you should file your first director’s return in October 2024.

Both resident and non-resident directors must have a Personal Public Service Number (PPSN) when filing director’s returns. Your PPSN is a unique reference number that helps you access Ireland’s social welfare benefits, public services and information.

Directors should apply for a PPSN from the Department of Employment Affairs and Social Protection. A PPSN will allow non-resident directors to submit their director’s tax returns.

Directors must calculate their tax liability and submit the necessary tax return form to the Revenue.

If you are a self-assessed taxpayer registered for Revenue Online Service (ROS), you can access a pre-populated Form 11. This form includes some of the information Revenue already has on file for you, which speeds up the process.

Once you’ve entered and checked all the necessary details on Revenue, the system will take care of calculating your income tax liability or refund automatically. It’s one less thing for you to worry about.

Directors tax return with income

Proprietary directors must file tax returns if they received any income over the last year. For example, when you file your 2023 tax return, you will be reporting on your 2022 income. 

Types of income included on a tax return include salary (from the company and/or other employment), dividends, rental income, capital gains and foreign income.

Directors tax return with no income

Sometimes, the director’s return is called Form 11 Income Tax Return, which can be misleading if you haven’t had any income from the business. However, even if you have received no income over the last year, directors must still file director’s tax returns. These are sometimes called Nil returns.

You may be liable to surcharges and interest if you are late or file your return incorrectly. This also applies to Nil returns, which means you may have to pay penalties even if you don’t owe any tax. 

It’s not uncommon for new company directors to forget to file director’s returns, so ensure you know all your important company deadlines when setting up a company in Ireland.

To steer clear of any penalties, it is essential to be cognisant of the income tax return deadline. Make it a priority to find out the specific deadline each year and to prepare your documents well in advance to facilitate a smooth filing process.

In Ireland, Preliminary Tax estimates the tax you anticipate owing for the next tax year. 

In the initial year of your business, your tax payment seems higher because you must cover both taxes in full. Nonetheless, the Revenue securely holds the Preliminary Tax component as a provision and will be used to offset your income tax obligations for the subsequent year.

Remember that Preliminary Tax is an ongoing yearly commitment. It plays a crucial role in effectively managing your tax duties and plays a part in maintaining the financial stability of your business operations.