UAE Transfer Pricing Compliance, Built on Ministerial Decision No. 97
Every transaction between related parties in the UAE must be priced on arm's length terms under the UAE Corporate Tax Law. Related Party Disclosure is mandatory with every CT return. Failure to maintain proper documentation exposes you to FTA penalties and potential tax adjustments. We handle the full compliance requirement.
Who Transfer Pricing Rules Apply To in the UAE
UAE Corporate Tax Law requires all transactions between related parties to be conducted on arm's length terms. This applies to any business that transacts with a connected person: parent companies, subsidiaries, shareholders, directors, or other related entities. Beyond the arm's length requirement, certain businesses must maintain formal transfer pricing documentation and file it with or alongside their CT return. Failure to file the Required Disclosure Form, or maintaining inadequate documentation, results in FTA penalties independent of whether the pricing was actually arm's length.
| Entity Type | Transfer Pricing Obligation |
|---|---|
| All CT-registered businesses with related-party transactions | Arm's length principle mandatory |
| All CT taxpayers | Related Party and Connected Person Disclosure Form with CT return |
| Entities with controlled transactions > AED 4M per category | Local File documentation required |
| MNE groups with consolidated revenue > AED 3.15B | Master File and Country-by-Country Report |
| Businesses with intra-group services, loans, IP, or goods | Arm's length pricing and documentation |
| Free zone companies with mainland related-party transactions | Full arm's length and disclosure requirements |
Source: Ministerial Decision No. 97 of 2023 on the Conditions for Transactions with Related Parties and Connected Persons. UAE Corporate Tax Law, Article 34 to 36.
How We Handle Your Transfer Pricing Compliance
Related Party Transaction Review
We identify all transactions between your entity and related parties or connected persons during the financial year. We categorise them by transaction type (services, goods, loans, IP, guarantees), assess the total value per category, and determine your documentation obligations under Ministerial Decision No. 97 of 2023.
Arm's Length Analysis and Documentation
For transactions requiring documentation, we perform a comparability analysis using publicly available benchmarking data to confirm arm's length pricing. Where pricing is not at arm's length, we quantify the adjustment required and advise on corrective action before the CT return is filed. We then prepare the required Local File documentation.
Disclosure Form Preparation and Filing
We prepare the Related Party and Connected Person Disclosure Form that must accompany your CT return and file it via EmaraTax as part of the return submission. For MNE groups, we prepare or coordinate the Master File and Country-by-Country Report to the same deadline.
Quoted Based on Transaction Volume and Complexity.
Transfer pricing compliance fee depends on the number and type of related-party transactions and whether Local File or Master File documentation is required.
Disclosure Form and Basic Compliance
- ✓Related party transaction identification
- ✓Arm's length assessment
- ✓Related Party Disclosure Form preparation
- ✓Filing with CT return on EmaraTax
- ✓Documentation summary for your records
Local File and Full Documentation
- ✓Controlled transaction benchmarking analysis
- ✓Full Local File preparation (OECD format)
- ✓Functional analysis and comparables research
- ✓Intercompany agreement review
- ✓Master File coordination for MNE groups
FTA penalty for failure to file the Related Party Disclosure Form: AED 10,000 per return period. Inadequate documentation: up to AED 50,000. These penalties apply independently of whether the pricing was arm's length.
Why CalcUAE for Transfer Pricing
Disclosure Form Never Missed
The Related Party Disclosure Form is mandatory for every CT return where related-party transactions exist. We prepare it as part of the CT return process, never as an afterthought.
Benchmarking with Real Data
Arm's length analysis requires comparable transaction data. We use commercially available benchmarking databases to support pricing positions, not internal estimates.
Penalty Risk Quantified
We assess your documentation gap before filing and quantify the penalty exposure. You know your risk position before the return goes in.
Integrated with CT Return
Transfer pricing compliance is handled alongside your CT return, not as a separate year-end scramble. One engagement, one deadline, one submission.
UAE Transfer Pricing: Common Questions
What is the arm's length principle under UAE CT?
The arm's length principle requires that transactions between related parties be priced as if the parties were unrelated and acting in their own economic interests. Under UAE Corporate Tax Law, Articles 34 to 36, if the actual price of a related-party transaction differs from the arm's length price, the FTA can adjust the taxable income of either party to reflect the arm's length amount. This can result in additional tax payable even where the commercial rationale for the transaction is clear.
What is the Related Party Disclosure Form?
The Related Party and Connected Person Disclosure Form is a mandatory schedule that must be filed with every UAE Corporate Tax return where the taxpayer has transactions with related parties or connected persons. It discloses the nature, value, and parties to all controlled transactions. Failure to file it, or filing it inaccurately, triggers a standalone AED 10,000 penalty under Cabinet Decision No. 75 of 2023.
When is a Local File required in the UAE?
A Local File is required under Ministerial Decision No. 97 of 2023 when the total value of controlled transactions in any category (services, goods, financing, IP, or other) exceeds AED 4 million in the financial year. The Local File must be prepared and available by the CT return filing deadline. It does not need to be proactively submitted to the FTA but must be provided on request.
Do free zone companies need to comply with transfer pricing?
Yes. All UAE CT-registered entities, including free zone companies, are subject to the arm's length principle and the Related Party Disclosure Form requirement. Free zone companies that transact with mainland related parties face the same disclosure and documentation obligations as mainland entities. QFZP status does not exempt a company from transfer pricing rules.
What are the penalties for UAE transfer pricing non-compliance?
Failure to file the Related Party Disclosure Form: AED 10,000 per return period. Failure to maintain adequate transfer pricing documentation when required: up to AED 50,000. FTA adjustment of taxable income due to non-arm's length pricing: additional tax at 9% on the adjusted amount, plus late payment penalties. These penalties are cumulative and apply independently of each other.
File Your Related Party Disclosure Before Your CT Return Deadline
Tell us your related-party transaction types and approximate values. We assess your documentation obligations the same day.
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