Why the UAE Corporate Tax clarification on “director” and “officer” matters for connected-person payments, governance, and risk.
Financial Advisory
5 min read
Under UAE Corporate Tax, titles on their own do not determine the tax treatment. The Federal Tax Authority’s clarification makes clear that what matters is the person’s actual authority, role, and ability to plan, direct, control, or legally bind the business. That means a person called “director” may not necessarily be treated as a director for Corporate Tax purposes, while another person with no impressive title may still fall within the relevant analysis if they hold real strategic or binding authority. This insight explains why businesses should look beyond job titles and review actual decision-making power, connected-person exposure, related payments, and governance documents more carefully.
Key Takeaways
- Titles alone are not the decisive test under the FTA clarification; substance and actual authority matter more.
- Article 36 can affect the deductibility of payments or benefits made to connected persons.
- Individuals outside the board may still need review if they can make strategic decisions or legally bind the business.
- Trade licence roles, board resolutions, delegations of authority, and powers of attorney may be just as important as employment titles.
- Businesses should align tax analysis, governance documents, and real operating practice rather than relying only on organisation charts.
Need help assessing whether this applies to your company?
The UAE Corporate Tax position does not depend on job title alone. If you are unsure whether a shareholder, director, manager, general manager, authorised signatory, or senior employee may fall within the connected-person framework, contact Regent Advisory to request our Director / Officer Connected-Person Checklist and discuss whether a focused review may be needed.
Contact Information
Regent Advisory
Email: info@regent-advisory.com
Phone : +971 56 205 4004
WhatsApp : Chat with us
