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The Big Picture: What’s Changing?
Navigating the rules for a UAE Corporate Tax Connected Persons has just become critical for every business operating in the Emirates. The FTA’s latest clarification (CTP010) shifts the focus from job titles to actual authority. This means the FTA will assess what a person really does inside the business — not what their title says.
This directly affects:
- who is treated as a Connected Person
- whether payments to them are tax‑deductible
- your audit exposure under UAE Corporate Tax
This is a clear move toward substance over form.
Director vs. Officer
Director
A Director is someone who is formally part of the company’s governing body.
FTA checks:
- Are they listed in the company’s legal documents?
- Do they hold official board authority?
A title alone is not enough.
Officer
An Officer is someone who has real decision‑making power, even without a board title.
FTA looks at:
- Ability to plan, direct, or control activities
- Power of Attorney
- General Manager or Authorised Signatory status
- Authority to bind the company
This follows IAS 24, which focuses on actual influence.
If someone can make major decisions, the FTA may treat them as an Officer — regardless of their title.
Why This Matters to Your Business
1. Your tax deductions are at risk
Payments to Connected Persons are only deductible if they are:
- Market Value, and
- Wholly & exclusively for business
If the FTA believes the payment is inflated or not supported by real work, they can deny the deduction, increasing your tax liability.
2. Family‑run and owner‑managed businesses face higher scrutiny
In many UAE SMEs:
- Owners act as directors
- Family members hold POAs
- Managers function like officers
The FTA will examine actual behaviour, not family ties or job titles.
3. Weak documentation increases audit risk
If you cannot show:
- Who makes decisions
- Who has authority
- Why someone is paid a certain amount
The FTA can challenge your expenses.
This affects salaries, director fees, bonuses, management charges, and related‑party payments.
4. This impacts your 2024 tax return
The FTA expects businesses to have:
- Identified all Connected Persons
- Benchmarked their remuneration
- Documented their authority
If not, your 2024 tax position is exposed.
How Imperium Helps UAE Businesses Stay Compliant
Imperium Accounting & Tax Consultants supports SMEs and groups by ensuring their governance, documentation, and tax positions meet FTA expectations.
We help you by:
- Conducting a full Connected Person analysis– identifying Directors, Officers, and Related Parties based on actual authority— not titles.
- Benchmarking remuneration with market data– ensuring salaries, fees, and benefits meet Market Value requirements.
- Reviewing governance and delegated authority– analysing POAs, trade licenses, resolutions, and decision‑making structures.
- Preparing audit‑ready documentation– creating clear evidence of roles, responsibilities, and functional authority.
- Protecting your 2024 tax position– ensuring your deductions are defensible and compliant with Article 36.
Imperium ATC is giving businesses confidence that their compliance is handled with technical accuracy and regulatory insight. Strengthen your tax position before the FTA reviews it. If you want to ensure your Connected Person analysis, remuneration, and documentation meet the new standards:
Don’t leave your 2024 tax position to chance. Imperium Accounting & Tax Consultants is here to ensure your governance, documentation, and remuneration structures are fully compliant and audit-ready.
Take control of your tax compliance today:
- 📞 Call/WhatsApp: +971 50 265 6365
- 📧 Email: info@imperiumatc.ae
- 🌐 Website: imperiumatc.ae