Remuneration paid to directors of private companies (including members of close corporations) is subject to employees˙ tax (PAYE) from 1 March 2002. Companies and close corporations will therefore be liable to make PAYE payments to the South African Revenue Service in respect of such remuneration.
It was announced in media release number 1 of 2002 issued on 18 January 2002 that more information regarding employees˙ tax on remuneration paid or payable to directors of private companies and members of close corporations would be made available on the SARS website by middle of February 2002.INCOME TAX INTERPRETATION NOTE NO 5 and an OPERATIONAL GUIDELINE TO EMPLOYERS - EMPLOYEES' TAX: DIRECTORS OF PRIVATE COMPANIES (WHICH INCLUDE PERSONS IN CLOSE CORPORATIONS WHO PERFORM FUNCTIONS SIMILAR TO DIRECTORS OF COMPANIES), both dated 19 February 2002, have been placed on the SARS website (www.sars.gov.za) under "Income Tax", "Interpretation Notes" and "PAYE", "Guidelines to Employers" respectively.
Companies and closed corporations that are currently not registered with SARS for employees' tax and skills development levy purposes should register timeously in order to pay employees' tax and skills levy for March 2002. An application for registration (form EMP101) is available on the SARS website under the heading "SDL/PAYE Forms" or from local SARS branch offices.
Any enquiries regarding directors' remuneration and the calculation of employees' tax may be addressed to local SARS branch offices.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE