UAE Corporate Tax transfer pricing rules require that transactions between related parties are conducted at arm’s length prices. Here is what UAE businesses with related-party transactions need to know.
What Is Transfer Pricing?
Transfer pricing refers to the prices charged in transactions between related parties — for example, when a UAE company sells goods to its subsidiary overseas, or charges management fees to a group company in another country. The OECD Transfer Pricing Guidelines (which the UAE has adopted) require that related-party transactions be priced as if they were conducted between unrelated parties at arm’s length.
Who Must Comply with UAE Transfer Pricing Rules?
UAE companies that: are part of a multinational group, transact with related parties (subsidiaries, parent companies, sister companies, or entities controlled by the same UBO), and where the aggregate value of related-party transactions in a tax period exceeds certain disclosure thresholds (AED 250,000 per transaction type under FTA guidance). Small domestic businesses with no international related-party transactions: generally not affected by transfer pricing in practice.
UAE Transfer Pricing Documentation Requirements
Qualifying UAE corporate tax registrants must: maintain a Local File (documenting their specific related-party transactions and the transfer pricing analysis), potentially prepare a Master File (for businesses that are part of a group with AED 200M+ annual consolidated revenue), and disclose related-party transactions in the UAE CT return (form disclosure, not submission of the full Local File). Country-by-Country Reporting (CbCR): Required for multinational enterprise (MNE) groups with consolidated group annual revenue of AED 3.15 billion+ (approximately EUR 750 million). CbCR must be filed with the UAE FTA and shared with treaty partner countries under the OECD multilateral framework.