Under the UAE Corporate Tax regime, businesses are required to ensure that transactions with related parties and connected persons are conducted at arm’s length. Transfer Pricing documentation supports this requirement and plays a key role in Corporate Tax compliance, disclosures, and audit readiness.
When Transfer Pricing Applies
Transfer Pricing rules apply to:
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Transactions between related parties
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Dealings with connected persons such as shareholders, directors, and group entities
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Mainland companies, Free Zone entities, and multinational groups
All relevant transactions must follow the arm’s length principle.
Key Documentation Requirements
Related Party Disclosure Form
All taxable persons with related party or connected person transactions must submit a disclosure form along with their Corporate Tax return.
Local File
A Local File is required where UAE revenue exceeds AED 200 million. It includes:
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Entity and transaction details
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Functional, asset, and risk (FAR) analysis
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Economic analysis and benchmarking
Master File
A Master File is required where global group revenue exceeds AED 3.15 billion. It provides:
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Group structure and value chain overview
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Global Transfer Pricing policies
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Intangible assets and financing arrangements
Documentation Standards
Transfer Pricing documentation should be:
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Prepared contemporaneously
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Aligned with UAE Corporate Tax law and Ministerial Decisions
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Consistent with OECD Transfer Pricing Guidelines (2022)
Documentation must be available upon request by the Federal Tax Authority.
Common Risk Areas
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Incomplete identification of related parties
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Lack of benchmarking support
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Inconsistent pricing policies
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Impact on Free Zone tax benefit eligibility
Conclusion
Transfer Pricing documentation is a critical compliance requirement under UAE Corporate Tax. A structured and well-supported approach helps businesses meet disclosure obligations, defend tax positions, and remain audit-ready.
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