TFAB

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

UAE Tax Compliance Insight: TRN Reactivation Requirements

If a natural or juridical person in the UAE has been deregistered from tax, the Federal Tax Authority (FTA) now requires them to reactivate their previous Tax Registration Number (TRN) instead of applying for a new one.

This is based on Article (6) of the Executive Regulations of Federal Decree-Law No. 28 of 2022 on Tax Procedures (Cabinet Decision No. 74 of 2023) - currently in force.

Why it matters:
✅ Maintains continuity of tax history
✅ Avoids duplicate TRNs in the FTA system
✅ Simplifies compliance and record-keeping

📌 Official reference: Cabinet Decision No. 74 of 2023 – Executive Regulation

Stay compliant, stay updated!

🌙 Ramadan Kareem
May this holy month bring peace and blessings to your life🤍

Running a Free Zone company in the UAE?
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Audit your business with confidence.

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Corporate Tax Filing is now active for businesses with a financial year ending 31 December 2025.
Ensure timely filing to stay compliant and avoid penalties.

TFAB provides end-to-end support—from financial statements to tax return filing.