28 July 2026 · Delegated
Delegated & Corporate Directorships
Where a company is engaged to provide directorship services, or a business delegates one of its own employees or partners to sit on a board in the business's name and invoices for the arrangement, the supply is an ordinary taxable business-to-business service at 5% — the natural-person out-of-scope treatment simply does not apply. The dividing line is whether the individual is acting personally, in their own name and on their own account, or whether a business is supplying the directorship as part of its own activities. Getting this classification wrong in either direction — charging VAT on a genuinely personal appointment, or failing to charge it on a delegated one — creates a correction that is more work than getting it right at the outset.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
A business supplies it
Once a company stands between the individual and the board seat, the transaction is no different from any other professional service the company sells. A firm that specialises in providing non-executive directors, a consultancy that puts a partner forward for a client's board, or a holding company that delegates an employee to sit on a subsidiary's board and recharges the cost — all of these are taxable supplies of services at the standard 5% rate, invoiced, VAT-accounted-for, and included in the supplying company's own turnover for threshold purposes.
- A company engaged specifically to provide directorship services.
- A consultancy putting forward a partner or employee for a board seat.
- A holding company delegating staff to a subsidiary's board and recharging.
- All are taxable B2B supplies of services at 5%.
- The fee counts toward the supplying company's own VAT threshold.
- Invoice, account for output VAT, and file exactly as for any other service.
Personal or business?
The question that decides the VAT treatment is simple to state and sometimes harder to apply in practice: is a natural person acting personally as director, or is a business supplying the directorship as one of its services? Evidence that points toward a business supply includes the invoice being issued by the company rather than the individual, the appointment or engagement letter naming the company as the counterparty, and the fee being paid into the company's account rather than the director's own. Where any of these point toward the company rather than the individual, the safer assumption is that the arrangement is taxable.
- Individual acting personally, invoicing directly: out of scope.
- A business invoicing for the arrangement: taxable at 5%.
- Check who signs the engagement letter and who is named as supplier.
- Payment into a company account is a strong signal of a taxable supply.
Non-resident and reverse-charge directors
Delegated directorships get more complicated when the supplying company sits outside the UAE. If a non-resident company delegates one of its people to a UAE board and invoices the UAE entity for the service, the UAE recipient may need to self-account for VAT under the reverse-charge mechanism rather than expecting the non-resident supplier to register locally, depending on the recipient's own VAT status and whether it is making taxable supplies itself. This is a separate question from the out-of-scope natural-person rule — it only arises because the supply is already taxable in principle, and the remaining issue is simply who accounts for the VAT.
- A non-resident company delegating a director to a UAE board is still a taxable supply.
- The UAE recipient may need to reverse-charge the VAT rather than the supplier registering.
- Reverse-charge treatment depends on the recipient's own VAT-registered status.
- This is separate from, and does not revive, the natural-person out-of-scope rule.
How Exiloz classifies these arrangements
Because the same person can hold a personal, out-of-scope seat on one board and a delegated, taxable seat on another, we do not classify by individual — we classify by engagement. For each board seat, we review the appointment letter, confirm who is named as the contracting party, check whose bank account receives the fee, and set the invoicing accordingly. Where a delegation arrangement is genuinely taxable, we make sure it is registered and invoiced correctly from the outset, and where a cross-border element is involved, we confirm whether the reverse charge applies before any VAT position is taken.
- Each board seat is classified on its own appointment paperwork.
- We confirm the contracting party and payee for every engagement.
- Taxable delegations are set up with correct invoicing from the start.
- Cross-border delegations are checked for reverse-charge treatment separately.
Related guides
Frequently Asked Questions
For businesses and consultancies that supply directors to boards.
Is a corporate director taxable?
Yes. Where a company is engaged to provide directorship services, that is a taxable supply of services at 5%, invoiced and accounted for exactly like any other professional service the company sells.
What about a delegated director?
Where a business delegates one of its own people to sit on a board in the business's name and invoices for it, that arrangement is also a taxable B2B supply — the individual is standing in for the business, not acting personally.
How do I tell the difference between a personal and a delegated appointment?
Check who is named as the contracting party in the appointment letter, who issues the invoice, and whose account receives the fee. If a company appears anywhere in that chain, the arrangement is almost certainly taxable.
Does the delegated director's own VAT registration matter?
No, not directly — the supply is made by the delegating company, so it is the company's VAT registration and turnover that matter, not the individual director's personal registration status.
What if the delegating company is based outside the UAE?
The supply is still taxable in principle, but the UAE recipient may need to self-account for the VAT under the reverse-charge mechanism instead of the non-resident company registering locally, depending on the recipient's own VAT position.
Can the same person be personal on one board and delegated on another?
Yes, and it is common. Each board seat is assessed on its own appointment paperwork, so one seat can be out of scope while another, delegated through a firm, is fully taxable.
Do we need to register just to supply one director?
If the directorship fee, combined with your company's other taxable supplies, exceeds the mandatory threshold, yes — the delegated directorship counts toward that turnover test in the normal way.
Can Exiloz classify our arrangement?
Yes. We review each board appointment, confirm whether it is personal or delegated, and set up correct invoicing — including reverse-charge treatment where a cross-border element is involved.
Is your directorship arrangement taxable?
Exiloz reviews each board seat and confirms whether it is personal and out of scope, or a taxable delegated supply.