UAE Transfer Pricing regulations form a key part of the UAE Corporate Tax regime and are aligned with the OECD Transfer Pricing Guidelines. These rules require businesses to ensure that transactions with related parties and connected persons are conducted on an arm’s length basis, as if between independent parties.
Transfer Pricing applies to all businesses operating in the UAE, including mainland and free zone entities, where related-party transactions exist.
Scope of Transfer Pricing
Transfer Pricing requirements apply to a wide range of intercompany transactions, including:
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Sale and purchase of goods
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Provision of management and support services
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Cost sharing and expense allocations
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Financing arrangements and intercompany loans
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Royalty payments and use of intellectual property
Arm’s Length Principle
The arm’s length principle requires that related-party transactions reflect market-based pricing. Businesses must analyze the functions performed, assets used, and risks assumed by each party to determine appropriate pricing in line with OECD standards.
Accepted Transfer Pricing Methods
The UAE follows internationally recognized OECD methods, including:
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Comparable Uncontrolled Price (CUP)
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Cost Plus Method
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Resale Price Method
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Transactional Net Margin Method (TNMM)
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Profit Split Method
The most appropriate method must be selected based on the nature of the transaction and supported by proper analysis and benchmarking.
Documentation & Reporting Requirements
Depending on the size and structure of the business, the following documentation may be required:
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Transfer Pricing Disclosure Form to be filed with the UAE Corporate Tax return
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Master File providing a high-level overview of the group’s global operations
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Local File detailing UAE-specific related-party transactions and analysis
Documentation must be prepared on a contemporaneous basis and submitted to the Federal Tax Authority upon request.
Compliance Risks & Penalties
Failure to comply with Transfer Pricing regulations may result in:
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Adjustments to taxable income
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Financial penalties
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Increased audit risk and scrutiny by the tax authorities
Proactive compliance helps mitigate these risks and ensures business continuity.
Our Transfer Pricing Services
We provide comprehensive Transfer Pricing support, including:
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Transfer Pricing policy design and review
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Functional, economic, and comparability analysis
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Benchmarking studies
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Preparation of Master File and Local File
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Transfer Pricing Disclosure Form support
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Ongoing compliance and audit assistance
