05/05/2026
Last week, I had a discussion with a business owner in the UAE.
He said:
👉 “We are paying our Director regularly… so it should be tax deductible, right?”
It sounded logical.
But in reality… it’s not that simple anymore.
The recent clarification from the Federal Tax Authority highlights something many businesses are missing.
Here’s what every business owner should understand:
✔ Payments to Directors or Officers are not automatically deductible
✔ They must reflect market value
✔ These individuals are considered Connected Persons
✔ Certain payments must also be disclosed in your tax return
And most importantly…
👉 It’s not about the title
👉 It’s about the actual authority and role
Many businesses may unknowingly:
Overpay without justification
Misclassify employees as “Directors”
Miss disclosure requirements
👉 Which can lead to tax adjustments or compliance issues later
Corporate Tax in the UAE is evolving fast…
It’s no longer just accounting.
It’s about structure, transparency, and substance.
Have you reviewed how your Director or management payments are structured?
👇 Share your thoughts in the comments
📩 Or message me if you want a quick review of your setup
