Transfer Pricing UAE
Every related-party transaction in a UAE taxable entity must be priced at arm's length. FTA audit risk on TP is rising. We prepare your Local File, Master File, and Disclosure Form before you need them.
Who Needs Transfer Pricing Documentation?
Under UAE Corporate Tax law (Ministerial Decision No. 97 of 2023), every taxable person that enters into transactions with Related Parties or Connected Persons must ensure those transactions are priced on arm's length terms. Documentation requirements depend on revenue thresholds: Local File required above AED 200M revenue, Master File required for MNE groups above EUR 750M consolidated revenue. However, the Disclosure Form (TP Disclosure) is required for all taxable persons with related-party transactions — regardless of size.
| Revenue / Group Size | Documentation Required |
|---|---|
| Any taxable person with related-party transactions | TP Disclosure Form (mandatory, all sizes) |
| Revenue > AED 200M | Local File required |
| MNE Group with consolidated revenue > EUR 750M | Master File required |
| MNE Group with revenue > EUR 750M (UAE parent) | Country-by-Country Report (CbCR) |
| Free zone company with mainland related party | Arm's length pricing critical for QFZP status |
| Director / shareholder loans or services | Priced at arm's length — documentation required |
Source: Ministerial Decision No. 97 of 2023. TP Disclosure Form submitted with CT Return. Penalties up to AED 100,000 for failure to maintain required documentation.
How We Build Your TP Documentation
Related-Party Transaction Mapping
We identify all transactions with related parties: intercompany loans, management fees, royalties, product sales, service fees, and cost-sharing arrangements. We review your financials and group structure to ensure nothing is missed — the FTA expects a complete picture.
Arm's Length Analysis
For each material transaction category, we select the most appropriate transfer pricing method (CUP, Cost Plus, TNMM, Profit Split) and benchmark against comparable uncontrolled transactions using commercial databases. We document the methodology and results to OECD standards.
Local File, Disclosure Form & Submission
We prepare the Local File (structured TP documentation) and the TP Disclosure Form required with the CT return. Where a Master File is required, we coordinate with your group's head office documentation. All documentation is delivered in FTA-compliant format.
Transparent Pricing — No Surprises
Fee depends on number of related-party transaction categories and group complexity.
TP Disclosure + Basic Local File
From AED 5,000
- ✓Up to 3 transaction categories
- ✓Arm's length analysis (TNMM / CUP)
- ✓TP Disclosure Form preparation
- ✓Local File documentation
- ✓Submission guidance with CT return
Full TP Documentation
From AED 12,000
- ✓Unlimited transaction categories
- ✓Benchmarking study (commercial database)
- ✓Full Local File to OECD standard
- ✓Master File coordination support
- ✓FTA audit defence pack
FTA penalty for failure to maintain TP documentation: up to AED 100,000 per violation. Documentation is not optional.
Transfer Pricing UAE — Common Questions
What counts as a "Related Party" under UAE CT law?
Related Parties include: entities where one controls the other (directly or indirectly), entities under common control, individuals who own 50%+ of a business and their relatives (up to fourth degree), and partners in a partnership. "Connected Persons" is a narrower category including directors, officers, and their relatives. Both categories require arm's length pricing under Ministerial Decision No. 97 of 2023.
Is a management fee from a parent company a related-party transaction?
Yes. Fees charged by a parent or group entity for management services, shared services, or use of intellectual property are all related-party transactions subject to TP rules. The fee must be at arm's length — i.e., what an independent third party would charge for the same services. A fixed management fee with no underlying service analysis is a common FTA audit trigger.
What is the arm's length principle and how is it tested?
The arm's length principle requires that related-party transactions are priced as if the parties were independent and dealing at market rates. Testing involves selecting a TP method and identifying comparable uncontrolled transactions. Common methods are the Comparable Uncontrolled Price (CUP) method for commodity-type transactions and the Transactional Net Margin Method (TNMM) for services. The UAE follows OECD Transfer Pricing Guidelines.
Does transfer pricing apply to free zone companies?
Yes. Free zone companies that are taxable persons (including QFZP entities) must price related-party transactions at arm's length. This is especially important for QFZP companies transacting with mainland related parties — non-arm's length pricing can cause income to be reclassified as "non-qualifying income" subject to 9% CT, stripping the QFZP benefit.
What happens during an FTA transfer pricing audit?
The FTA can request TP documentation as part of a CT audit. If documentation is absent or the pricing is not arm's length, the FTA can make a TP adjustment — increasing the taxable income of the UAE entity to reflect what the price should have been. Penalties apply on the additional tax assessed, plus the documentation failure penalty. Having contemporaneous documentation (prepared before filing) is the only strong defence.
Protect Your QFZP Status and Avoid TP Penalties
We review your related-party transactions, prepare arm's length analysis, and deliver FTA-compliant documentation before your CT return is due.
Start TP Documentation →