Expert Tax Consultant in Dubai | UAE Tax Zone > Transfer Pricing Assessment in UAE

Transfer Pricing Assessment in UAE

Overview

With the implementation of UAE Corporate Tax (Federal Decree-Law No. 47 of 2022), businesses engaging in related-party transactions must comply with Transfer Pricing (TP) regulations. Transfer Pricing rules ensure that transactions between related entities are conducted at arm’s length, preventing profit shifting and ensuring fair taxation.

A Transfer Pricing Assessment helps businesses evaluate their inter-company transactions, ensuring compliance with UAE tax laws while minimizing risks and penalties.

Mandatory Requirements for Transfer Pricing in UAE

Businesses in the UAE must comply with Transfer Pricing regulations if they:

  • Engage in transactions with related parties or connected persons (such as subsidiaries, parent companies, or entities under common ownership).
  • Meet the transfer pricing documentation thresholds set by the Federal Tax Authority (FTA).
  • Prepare and maintain transfer pricing documentation, including Local File, Master File, and Country-by-Country Reporting (CbCR) (if applicable).
  • Ensure all transactions follow the arm’s length principle, meaning they must be priced as if conducted between unrelated parties.

Steps for Transfer Pricing Assessment

  1. Identify Related-Party Transactions – Determine all inter-company transactions subject to TP rules.
  2. Analyze Transaction Pricing – Ensure pricing is aligned with market standards and follows the arm’s length principle.
  3. Conduct Benchmarking Study – Compare transactions with industry standards using global databases.
  4. Prepare Transfer Pricing Documentation – Draft Local File, Master File, and CbCR (if applicable).
  5. Submit Required Reports – File disclosures with the FTA as per deadlines.
  6. Review Compliance & Risk Assessment – Identify potential risks of non-compliance and take corrective measures.

Process of Transfer Pricing Assessment

  • Step 1: Evaluate company structure and related-party transactions.
  • Step 2: Perform functional and economic analysis to determine appropriate pricing.
  • Step 3: Conduct benchmarking against similar transactions in the market.
  • Step 4: Prepare detailed TP documentation as per FTA requirements.
  • Step 5: Submit TP reports and disclosures within the tax return filing deadline.
  • Step 6: Implement necessary changes in pricing policies for compliance.

Deadlines for Transfer Pricing Compliance in UAE

  • Corporate Tax Return Filing Deadline: Businesses must file TP disclosures within 9 months of the financial year-end.
  • CbCR Notification Deadline: If applicable, must be submitted within the prescribed FTA timeframe.
  • Master File & Local File Submission: To be provided upon request by the FTA.

Documents Required for Transfer Pricing Assessment

  • Corporate Structure & Ownership Details
  • Financial Statements of the Entity & Group
  • List of Related-Party Transactions
  • Transfer Pricing Policy & Agreements
  • Functional & Economic Analysis Reports
  • Benchmarking Study Data
  • Local File, Master File &CbCR (if applicable)

FAQs

Any UAE business conducting transactions with related parties or connected persons must comply with TP regulations.

It means that related-party transactions must be priced as if they were conducted between independent entities in the open market.

Non-compliance may result in FTA audits, penalties, and tax adjustments that could increase corporate tax liabilities.

Companies meeting certain thresholds set by the FTA must prepare Local Files, Master Files, and CbCR, depending on the size and nature of transactions.

Incorrect pricing of related-party transactions can lead to higher taxable income, increased tax liabilities, and penalties for non-compliance.

How Uaetaxzone.ae Can Help

At Uaetaxzone.ae, we provide expert Transfer Pricing Assessment services to ensure compliance with UAE tax laws and optimize your tax position. Our services include:

  • Comprehensive TP Analysis: Assess related-party transactions and pricing structures.
  • Benchmarking & Economic Study: Compare transaction pricing with industry standards.
  • Preparation of TP Documentation: Local File, Master File, and CbCR reports as per FTA guidelines.
  • FTA Compliance & Risk Management: Ensure full compliance and mitigate penalties.
  • Strategic Tax Advisory: Implement tax-efficient transfer pricing policies.

Ensure Compliance Today!

Stay ahead of UAE Transfer Pricing regulations with Uaetaxzone.ae. Contact us for expert guidance and a detailed assessment of your related-party transactions!