Overview
Transfer pricing rules require transactions between related parties and connected persons to be carried out at arm’s length — on the prices and terms that independent parties would agree. The UAE Corporate Tax regime applies these rules, and taxpayers may need to disclose related-party transactions in their return and keep supporting documentation.
We prepare transfer pricing documentation (including Master File and Local File where required), benchmark your transactions and help you evidence an arm’s length position, so you are protected if the FTA asks questions.
Who needs this service?
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Groups with related companies inside or outside the UAE
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Owners and shareholders who trade with or lend to their own companies
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Companies paying management fees, royalties or interest to related parties
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Free zone businesses dealing with related mainland entities
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Businesses with payments to connected persons such as directors and shareholders
What’s included
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Identification of related parties and connected persons
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Review of intercompany agreements and transaction flows
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Functional analysis covering functions, assets and risks
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Benchmarking analysis using comparable data
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Local File and Master File preparation where required
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Support with the Transfer Pricing Disclosure Form
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Advice on pricing policy and intercompany agreements
Documents we typically need
- List of related parties and ownership structure
- Intercompany agreements and invoices
- Financial statements of the entity and group
- Details of loans, fees, royalties and service charges
- Organisation chart and functional information
- Prior-year transfer pricing documentation (if any)
- Corporate Tax registration details
How it works
- ScopingWe identify related parties and the transactions that need documentation.
- AnalysisWe analyse functions, assets and risks and select the pricing method.
- BenchmarkingWe test your pricing against comparable independent transactions.
- ReportWe deliver the documentation and support the disclosure in your return.
Key UAE facts
- Principle: related-party and connected-person transactions must meet the arm’s length standard.
- Disclosure: related-party transactions may need to be disclosed with the Corporate Tax return.
- Documentation: Master File and Local File requirements apply above the thresholds set by the Ministry of Finance.
- Records: keep transfer pricing documentation for seven years.
- Risk: non-compliance can lead to administrative penalties and tax adjustments.
Transfer Pricing Documentation — frequently asked questions
Does transfer pricing apply to small businesses?
The arm’s length principle applies to all related-party transactions. Full documentation requirements apply above specific thresholds, but a disclosure may still be needed for smaller taxpayers.
What does “arm’s length” mean?
It means the price and terms of a transaction between related parties are the same as those that independent parties would agree in comparable circumstances.
Who is a connected person?
Examples include owners, directors and officers of a business and their relatives. Payments to connected persons should reflect market value.
Can you help if I have no documentation from past years?
Yes. We can review earlier transactions, prepare the documentation you are missing and advise on any risk.
You may also need
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Document your related-party transactions properly
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