Jul 08, 2026 
Corporate Tax
Director and Officer UAE Corporate Tax
1.Introduction
The UAE Federal Tax Authority (FTA) introduced specific rules to clarify the meaning of “director” and “officer” for the purpose of Connected Persons under Article 36 of the UAE Corporate Tax Law.
Payments or benefits provided to directors or officers are deductible only to the extent they reflect market value and are wholly and exclusively incurred for business purposes.
2. Meaning of Director
- A director is a person appointed to the board of directors or equivalent governing body.
- It includes executive, non-executive, temporary, permanent, and alternate directors.
- Term Director in a person’s job title, in itself does not render the person a Director for subject purposes.
3. Meaning of Officer
- An officer is a person with authority and responsibility to plan, direct, control or make strategic and final decisions for the company.
- CEO, CFO, COO, General Manager, HR Head, and authorized signatories may qualify as officers.
- Routine employees without discretionary authority are not treated as officers.
4.Key Implications:
| Area | Requirement | FTA Focus | Possible Tax Impact |
| Connected Person Payments | Must be at market value | Arm’s length pricing | Excess amount should be disallowed |
| Director Remuneration | Commercially reasonable | Benchmarking review | Expense adjustment |
| Management Fees | Supporting evidence required | Substance of services | Deduction rejection |
| Tax Return Disclosure | Mandatory if threshold exceeded | Transparency | Penalty risk |
| Strategic Authority | Actual powers matter | Substance over form | Reclassification risk |
5.Illustration:
| Scenario | Director? | Officer? | Reason |
| General Manager manages entire LLC operations | No | Officer | Has authority over planning and controlling activities |
| HR Head only processes payroll and leave | No | No | No strategic decision-making authority |
| Employee named in trade licence as Manager | No | Officer | Can legally bind the company |
| Head of division follows only board instructions | No | No | No final strategic authority |
| Consultant acting as interim CEO | No | Officer | Performs CEO-level strategic role |
6.Practical Recommendations for UAE Businesses:
- Review powers of attorney and board resolutions to identify officers correctly.
- Ensure payments to directors and officers are verified with market benchmarks and industry standards.
- Maintain proper agreements and supporting documentation for connected person transactions.
- Disclose related transactions in the Corporate Tax Return when required.
- Focus on actual authority and responsibilities instead of job titles.
The UAE Corporate Tax framework follows a substance-over-form approach in identifying directors and officers. Companies must focus on actual authority, decision-making powers, and business responsibilities rather than job titles alone. Proper documentation, market-value support and correct disclosure are important to avoid tax disallowances and FTA penalties.
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