6 July 2026 · Related parties
Related Parties & Connected Persons
Related parties are entities and individuals linked by ownership or control — typically a 50% or more link, or common control. Connected persons are owners, directors and their relatives. Transactions with both must be arm's length; payments to connected persons are only deductible up to their arm's length market value, and anything above that is added back to taxable income.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
Defining the relationships
The rules reach further than most owners expect — beyond the obvious parent-subsidiary link.
- Entities under 50%+ common ownership or control.
- A person and a company they control.
- Directors, owners and their relatives (connected persons).
- Partners in the same unincorporated partnership.
Payments to owners and directors
This is where private companies most often trip up under the new rules.
- Salaries, rent and interest paid to owners must be arm's length.
- Only the market-value portion is deductible.
- Excess payments are added back and taxed at 9%.
- Keep evidence that the amount reflects a genuine market rate.
Related guides
Frequently Asked Questions
For owner-managed and group companies.
Who is a connected person?
An owner of the business, a director or officer, and their relatives — plus related parties of those people.
Can I pay myself rent or a salary from my company?
Yes, but only the arm's length market amount is deductible. Anything above market value is added back to taxable income.
What ownership level makes two companies related?
Broadly a 50% or greater ownership or control link, or common control by the same person or group.
Can Exiloz map our related parties?
Yes. We identify every related party and connected person and test whether the payments between them are defensible.
Map your related-party risk
Exiloz reviews payments to owners, directors and group companies before the FTA does.