Corporate Tax in the UAE is regulated by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Business and its amendments ("Corporate Tax Law"), and its implementing decisions.
As per Article 36(1) of the Corporate Tax Law, a payment or benefit provided by a Taxable Person to its Connected Person shall be deductible only if and to the extent that the payment or benefit corresponds with the Market Value of the service or benefit provided by the Connected Person1.
The definition of Connected Person as per Article 36(2)(b) of the Corporate Tax Law includes a director or officer of the Taxable Person2.
Further, in accordance with Article 55(1) of the Corporate Tax Law, the FTA requires a Taxable Person to disclose transactions and arrangements with Connected Persons as part of the Tax Return submission, if they exceed a specified threshold3.
This Public Clarification intends to clarify the terms "director" and "officer" in the context of Article 36(2)(b) and Arti...