FTA Clarification CTP010: Director vs Officer in UAE Corporate Tax (Article 36 Explained)

April 30, 2026

The Federal Tax Authority has clarified the meaning of “director” and “officer” for payments to Connected Persons under Article 36 of the Corporate Tax (CT) Law. The interpretation goes beyond job titles and is based on actual authority and decision-making power. The purpose of this clarification is to explain exactly what “director” and “officer” mean beyond the title.

Article 36(1) states that any payment or benefit given by a Taxable Person to a CP is deductible only if:

It matches the Market Value of the service, benefit, or anything else provided by the CP, and
It is incurred wholly and exclusively for the purposes of the company’s business.

A “Connected Person” (CP) under Article 36(2)(b) includes a director or officer of the company. Additionally, under Article 55(1), of the CT law states that the FTA may require the company to disclosure in its CT Return, covering all transactions and arrangements with CPs. Currently, the FTA requires payments or benefits to CPs to be disclosed in the CT return if they exceed AED 500,000.

These rules ensure that payments to directors or officers are:

Deductible only if they do not exceed Market Value, and
Properly disclosed.

Who is a Director as per the public clarification (CTP010)?

A “director” is a person who holds a position on the board of directors. This includes:

Executive directors
Non-executive directors
Temporary directors
Permanent directors
Alternative directors

as long as they are appointed on the board of directors, including any member of a board committee.

If the company does not have a board of directors, then “director” refers to a person holding a position on any equivalent governing body — including but not limited to:

Board of trustees
Board of governors

as determined under the applicable law governing the company’s incorporation, or the company’s constitutional documents, including but not limited to:

Memorandum of association
Articles of association
Partnership deed
Trust deed

Just having the word “director” in a job title does not make someone a director for the purposes of Article 36(2)(b).

If a person’s job title includes “director” but they do not hold a position on the board or equivalent governing body as per the company’s incorporation or constitutional documents, they are not considered a “director”.

However, it is still necessary to check whether that person could be considered an “officer.”

Who is an Officer as per the public clarification (CTP010)?

An “officer” includes any person who meets at least one of the following three criteria:

The person has the authority and responsibility for planning, directing, and controlling the
activities of the Taxable Person, in accordance with the framework of International Accounting
Standard 24 on Related Party Disclosures.
The person has the authority to make strategic decisions related to the financial, operational,
or commercial matters of the Taxable Person.
The person has the authority to enter into agreements or approve actions that legally or
contractually bind the Taxable Person.

Officer does not include a person who does not have the ultimate strategic decision-making or binding authority. An officer may include, but is not limited to:

Chief Executive Officer (CEO)
General Manager (GM)
Chief Financial Officer (CFO)
Chief Operating Officer (COO)
Chief Commercial Officer (CCO)
An authorised representative with discretionary authority

together referred to as “C-suite.”

A formal appointment or job title may be used as an indicator when assessing whether someone is an officer but it should not be relied upon as the sole criterion.

If a person does not have a formal appointment or C-suite job title, but through their actual conduct effectively has:

The authority and responsibility for planning, directing, and controlling, or
The authority to make strategic decisions, or
The authority to take or approve actions that legally or contractually bind the company

that person is still considered an “officer.”

The concept of “officer” applies to all Taxable Persons, including trusts, foundations, and unincorporated partnerships that are treated as fiscally opaque for Corporate Tax purposes.

Only a natural person can be a “director” or “officer” of a Taxable Person.
If a person is considered both a Related Party and a CPs of a Taxable Person, that person will be treated only as a Related Party for Corporate Tax purposes.

Examples

Sl No.	Role	Officer Status (✓/✗)
1	GM of an LLC	✓ – if they have authority and responsibility for overall management of the company
2	Head of a division	✓ – if they make ultimate strategic decisions. ✗ – if they only operate within frameworks set by higher authority
3	Head of HR	✓ – if they have ultimate authority over strategic HR decisions. ✗ – if limited to routine HR functions
4	Employee named on trade icence / board resolutions	✓ – if this gives authority to approve actions that legally or contractually bind the company
5	Holder of Power of Attorney	✓ – if PoA grants discretionary and strategic decision-making authority. ✗ – if limited to predefined tasks
6	Third-party secondees/ outsourced personnel	✓ – if they have authority to make strategic decisions or bind the company ✗ – if only executing pre-agreed terms.
7	GM of a Permanent Establishment	✓ – if responsible for planning, directing, and controlling activities of the PE
8	Interim CEO titled “consultant”	✓ – if they perform CEO role with authority to plan, direct, and control activities
9	GM appointed by natural-person Taxable Person	✓ – if they have authority and responsibility for managing the business
10	Trustee of a trust (Taxable Person)	✓ – if they have authority to plan, direct, and control activities of the trust
11	Court-appointed trustee / administrator	✗ – if only carrying out court-assigned duties without discretionary authority

Key Takeaways

The classification of a “director” or “officer” is determined by substance over form. What matters is the actual authority to plan, direct, and control the business, rather than the title held. Accordingly, individuals who may not formally hold the title of director or officer could still fall within this scope if they exercise significant decision-making powers.

Businesses should therefore carefully assess roles and responsibilities in practice to ensure that payments to CPs are correctly evaluated and remain compliant with the CT Law. Companies should also revisit and clearly identify who qualifies as a director or officer based on their functional roles, and ensure that appropriate benchmarking is undertaken for any payments made to such persons.