Goods and Services Tax – Directors’ fees

Public Rulings BR Pub 23/01 to 23/03 address the GST treatment of directors’ fees and board members’ fees.  The three rulings cover respectively:

• directors of companies,
• board members not appointed by the Governor-General or the Governor-General in Council; and
• board members appointed by the Governor-General or the Governor-General in Council.

The rulings and associated commentary explain whether directors’ fees and board members’ fees are subject to GST.  The rulings will apply from 1 April 2023 for an indefinite period.

The rulings are accompanied by a fact sheet BR Pub 23/01-23/03 FS 2 which summarises the key conclusions in the three rulings and the associated commentary.

The previous ruling for directors’ fees, BR Pub 15/10, was issued on 29 June 2015 for an indefinite period with effect from 30 June 2014.  However, with the addition of the two rulings relating to board members’ fees and the expansion of the commentary to cover both directors’ fees and board members’ fees, BR Pub 15/10 will be withdrawn on 31 March 2023.

While the rulings are not a change in the Commissioner’s view, the Commissioner has expanded on his view and, for the first time, concludes that professional directors are not eligible to be registered for GST.  Therefore, the Commissioner has prepared an Operational Position OP 23/01 giving guidance on how these rulings will be applied, as the Commissioner is aware that some professional directors are registered for GST, having incorrectly taken the view that they are carrying on a taxable activity.  

Read the withdrawal notice for BR Pub 15/10

Tax Information Bulletin - Vol 35 No 3, April 2023