# When You Are Also a Director: What FTA CTP010 Means for Entity Owners and Family Office Principals

There is a structural assumption embedded in many UAE holding and operating companies established by HNW families and family offices: that the entity owner who also serves as director is simply wearing two hats. Commercially convenient, administratively tidy, and — until recently — largely unexamined from a UAE corporate tax perspective.

The Federal Tax Authority has now examined it. Public Clarification CTP010, issued in May 2026, is the first detailed FTA interpretive guidance on Connected Persons since the Corporate Tax Law came into force. It does not introduce new obligations. It clarifies, with precision, obligations that already existed — and it does so in a way that will require a significant number of UAE entity owners to revisit arrangements that were established without this level of scrutiny in mind.

The practical implication is this: if you exercise strategic financial, operational, or commercial decision-making authority over a UAE entity, or if you can legally bind that entity, you are a director or officer for the purposes of Article 36 — regardless of what your service agreement, employment contract, or corporate documents say your title is. Classification follows substance. Title is immaterial.

The Arm's Length Requirement Is Not Administrative — It Has Tax Consequences

Article 36 of the UAE Corporate Tax Law requires that any payment or benefit to a Connected Person — including a director or officer — must reflect market value. Amounts paid above market value are non-deductible for corporate tax purposes. This is not a disclosure rule. It is a rule that directly affects the taxable income of the entity making the payment.

For an entity owner who draws remuneration, receives benefits-in-kind, or is reimbursed for expenses through a UAE company in which they hold a directorial or leadership role, the question is now unavoidable: can that remuneration package be evidenced as arm's length?

This is not a theoretical exercise. The arm's length standard applied under Article 36 requires comparison against what an unconnected party in an equivalent role, exercising equivalent authority, would be paid in the relevant market. For senior roles in DMCC, DIFC, or ADGM entities — particularly those involved in holding structure management, investment oversight, or intragroup treasury functions — that benchmark is neither simple to establish nor uniform across sectors.

The challenge for family office principals is compounded by the nature of the role itself. A principal who manages a family holding structure typically combines functions that, in a professionally managed institution, would be distributed across multiple senior hires. Benchmarking a single remuneration package against a single comparable role understates the economic contribution. Benchmarking it too broadly creates its own documentation risk. Neither approach is acceptable without professional support.

Benefits-in-kind are similarly in scope. Housing, vehicle arrangements, club memberships, and other non-cash benefits provided through a UAE entity to a director or officer who is also a Connected Person fall within the same analysis. If they exceed market value, the excess is non-deductible. If they are not documented, the FTA's position under CTP010 is that classification as a Connected Person will be determined by the substance of the individual's authority — not by whether they have been formally designated as one.

The Disclosure Obligation Under Article 55 Has Immediate Filing Implications

Article 55 of the Corporate Tax Law requires disclosure of all Connected Persons transactions in the annual corporate tax return. This is not a new provision. What CTP010 changes is the interpretive framework that determines who qualifies as a Connected Person in the first place.

For entities where the principal has been drawing remuneration or benefits without having been formally classified and disclosed as a Connected Person, the implication is clear: current and prior filings require review. Non-disclosure creates penalty exposure. The corporate tax return is not a summary document — it is a disclosure instrument, and the FTA treats omissions accordingly.

The governance mapping exercise this requires is not purely administrative. Correctly classifying directors, officers, and employees across a UAE entity or group structure — particularly where the same individual holds roles across multiple entities, or where authority is exercised informally as well as formally — requires a clear-eyed assessment of how decisions are actually made, not how they are documented. In many family office structures, those two things do not align as neatly as they should.

There is also a forward-looking dimension. CTP010 applies to current arrangements, but its clarification of the substance-over-form test means that restructuring alone does not resolve the question. If an individual continues to exercise the authority that qualifies them as a director or officer under Article 36, the classification follows them — through any title change, service agreement revision, or corporate restructure that does not alter the underlying exercise of authority.

What This Requires in Practice

For UAE entity owners who serve in leadership roles within their own structures — whether in DMCC, DIFC, ADGM, or onshore UAE — CTP010 requires three things to be addressed in sequence.

The first is governance mapping: a structured review of which individuals across the entity or group genuinely exercise financial, operational, or commercial decision-making authority, or hold binding authority, regardless of their formal designation. This is the foundation. Without it, neither the arm's length assessment nor the disclosure review can be conducted accurately.

The second is remuneration benchmarking: an arm's length assessment of what each identified director or officer receives — in cash, in kind, and through any other arrangement — against an appropriate comparator set. For complex roles in holding or family office structures, this is an exercise that requires transfer pricing methodology, not a market salary survey.

The third is CT return review: for entities that have already filed corporate tax returns, a review of whether Connected Persons transactions have been disclosed in full, and whether the arm's length position for each can be defended.

These are not compliance exercises in the narrow sense. They are the kind of structural review that entity owners and their advisors should have been undertaking since the CT Law came into force. CTP010 has made the FTA's expectations explicit. The appropriate response is to treat it as an occasion to ensure that what the FTA will see, if it looks, reflects deliberate and well-documented planning — not arrangements that were never designed with this level of transparency in mind.

*Founded in 2010. In DMCC Dubai since 2014. Affinitas was the first firm authorised by DMCC to establish Special Purpose Vehicles for clients when that product launched.*