The FTA's public clarification CTP010 defines "Director" and "Officer" under UAE Corporate Tax, reading Articles 36 and 55 of Federal Decree-Law No. 47 of 2022. It matters because Directors and Officers are Connected Persons: payments to them are only deductible up to market value, and may have to be disclosed in the tax return. The clarification, dated April 2026, confirms that the test is real authority, not job title.
Key takeaways
- The clarification (CTP010) interprets Directors and Officers as Connected Persons under Article 36 of Federal Decree-Law No. 47 of 2022.
- Only natural persons can be a Director or an Officer; a legal entity cannot hold either role for these purposes.
- A Director holds a position on the board or an equivalent governing body; a job title containing "director" without a board appointment does not count.
- An Officer is anyone with real authority to plan, direct and control the taxable person, aligned with the definition in International Accounting Standard 24 (IAS 24).
- Payments or benefits to Connected Persons are deductible only to the extent they match market value and are incurred wholly and exclusively for business.
- If a person is both a Related Party and a Connected Person, they are treated as a Related Party only.
Why the definitions matter
The reason the FTA is drawing tight lines around these two words is that they feed three separate rules in the Corporate Tax law. Under Article 36(1), payments and benefits to a Connected Person are deductible only where they correspond to market value and are incurred wholly and exclusively for the business; anything above market value is not deductible. Article 36(2)(b) sets out who a Connected Person is, and it expressly includes an owner of the taxable person, a Director or Officer of it, and a Related Party of any of those. Article 55(1) then adds a disclosure obligation: the FTA can require details of payments to Connected Persons in the tax return, currently where those payments exceed a prescribed threshold.
Put together, the label decides whether a payment is fully deductible, capped at market value, and reportable. Getting the classification wrong therefore flows straight through to taxable income and to disclosure risk, which is why the clarification exists.
Who is a Director?
A Director, for these purposes, is a person who holds a position on the board of directors or an equivalent governing body, such as a board of trustees or a board of governors, as defined under the applicable law or the entity's constitutional documents. It covers executive and non-executive directors, temporary, permanent and alternate directors, and members of board committees.
What it does not cover is a job title. Someone whose title happens to contain the word "director", say a marketing director or a sales director, is not a Director in this sense unless they have an actual board appointment. The clarification frames this as substance over form: authority over title, reality over designation.
Who is an Officer?
The Officer test is broader and turns entirely on authority. An Officer is any natural person who has the authority and responsibility to plan, direct and control the activities of the taxable person, a formulation the FTA aligns with IAS 24 on related-party disclosures. In practice that means someone with the power to make strategic financial, operational or commercial decisions, or the authority to approve or enter into binding agreements. Typical examples given include a CEO, general manager, CFO, COO, CCO and an authorised representative. A person without final or ultimate strategic decision-making or binding authority is not an Officer.
Scenarios from the clarification show how the "actual authority" test plays out.
| Scenario | Officer? |
|---|---|
| General manager with full management authority of an LLC | Yes |
| Division head with final strategic profit-and-loss authority | Yes |
| Division head reporting to the C-suite with no final authority | No |
| HR head handling payroll and leave only, no strategic role | No |
| Consultant hired as interim CEO with planning authority | Yes |
| Power-of-attorney holder doing admin tasks with pre-approved actions | No |
| Trustee with full authority over trust activities | Yes |
| Court-appointed administrator who only follows court orders | No |
The pattern is consistent: genuine, final decision-making power makes a person an Officer, while a senior-sounding role without that power does not. A consultant with no employment contract can be an Officer if they run the business; a long-serving manager without strategic authority is not.
The classification turns on actual authority, not job title or reporting line. Assess what a person really decides and can bind the business to, then apply the Connected Person rules to their pay.
Practical points that catch businesses out
Only natural persons can be Directors or Officers, so a corporate board member or a management company does not fit either definition. The tests apply across all legal structures, including companies, partnerships, foundations and trusts, so a trustee with real authority is caught just as a company officer would be. And where a person is simultaneously a Related Party and a Connected Person, the clarification says they are treated as a Related Party only, which avoids double classification of the same individual. In practice, SBC advisers find groups misapply the overlap rule most often — capping a payment to an owner-manager as a Connected Person when that individual is already a Related Party, so the same amount is restricted twice instead of once.
For businesses, the action is to identify board members by their formal appointment, assess officers by their real authority rather than their title, benchmark all payments to these Connected Persons against market value, and disclose them in the return where they exceed the FTA's threshold.
Frequently asked questions
Who is a Connected Person under UAE Corporate Tax?
A Connected Person includes an owner of the taxable person, a Director or Officer of it, and a Related Party of any of those, under Article 36(2)(b) of Federal Decree-Law No. 47 of 2022. Payments to Connected Persons are deductible only up to market value and may need to be disclosed in the tax return.
Does a job title with the word "director" make someone a Director?
No. The clarification is explicit that a title alone is not enough. A person is a Director only if they hold a position on the board or an equivalent governing body through a formal appointment. Substance and actual authority govern the classification, not the wording of a title.
Is a CEO or general manager treated as an Officer?
Generally yes, where they have the authority to plan, direct and control the business and to make or approve binding decisions. The clarification lists CEO, general manager, CFO, COO, CCO and authorised representative as typical examples, and confirms an interim CEO with planning authority also qualifies.
Can a company be a Director or Officer for Corporate Tax?
No. Only natural persons can be Directors or Officers under this clarification. A legal entity cannot hold either role, although it may be a Connected Person or a Related Party through other routes in the law.
How are payments to Directors and Officers taxed?
They are deductible only to the extent they correspond to market value and are incurred wholly and exclusively for the business. Any excess over market value is non-deductible, and the payments may have to be disclosed in the return where they exceed the FTA's prescribed threshold.
How SBC Tax Consulting can help
Classifying board members and executives correctly is where deductibility and disclosure risk begins. Our corporate tax team maps your Directors, Officers and other Connected Persons, then our transfer pricing specialists benchmark payments to them against market value so your deductions hold up. We also prepare the Connected Person disclosures that Article 55 can require and support you if the FTA queries a position. To review your related-party payments before filing, contact our team.
This publication is for general information only and does not constitute professional advice. Please consult your SBC advisor before acting on any matter covered here.