Compensation disbursed to a business’s management typically qualifies as an allowable expense for Corporate Tax purposes. Nevertheless, there are specific scenarios that can impact the deductible amount of such remuneration. These situations encompass the following:

• In cases where remuneration is granted to a director, business owner, or an individual closely associated with the director or owner, categorized as a Connected Person, the remuneration must align with the prevailing market rate for the pertinent role and services rendered. Any remuneration exceeding the market rate would not be eligible for deduction.
• When a company disburses a management fee to its parent entity or any other Related Party, it becomes imperative to consider transfer pricing regulations to ensure that the fee is established at an arm’s length rate. Any payment surpassing the arm’s length price would not be qualified for deduction.