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HMRC internal manual

International Manual

Description of double taxation agreements: Directors’ fees

A resident of one country who is a director of a company which is a resident of the other country may be taxed in that other country on their fees. Directors’ fees are the income which arises to a director in their capacity as a member of the board of directors.

Our domestic legislation limits the effects of this for the UK. The main implication of the provision is that the exemption for short-term business visitors (see INTM153170) is not available. However, earnings which the director may receive in their capacity as an employee remain taxable in accordance with the terms of the dependent personal services (employment) Article.

In a few agreements there is no separate directors’ fees Article but a provision on similar lines is incorporated in the dependent personal services Article.