Transfer Pricing Advisory Dubai, UAE

The UAE established a Corporate Tax (CT) system with the introduction of Federal Decree-Law No. 47 of 2022. Announced by the Ministry of Finance (MoF) on December 9, 2022, this law includes transfer pricing (TP) rules that require businesses to apply the arm’s length principle when conducting transactions with related parties. The MoF later provided additional guidance to help businesses understand the requirements. The Federal Tax Authority (FTA) oversees compliance with the CT law.

On May 11, 2023, the MoF issued Ministerial Decision No. 97 of 2023, outlining how businesses must prepare and maintain TP documentation under Article 55(2) of the CT law. These requirements apply to all UAE businesses, including those in free zones.

Key obligations include:

• Ensuring that all related party transactions follow the arm’s length principle, regardless of tax grouping or location.
• Filing a TP disclosure form along with the corporate tax return, except for businesses eligible for Small Business Relief.

Additional documentation requirements apply to:

• Companies with an annual turnover exceeding AED 200 million.
• Members of multinational groups with a global turnover above AED 3.15 billion.
• These businesses must prepare and maintain both a local file and a master file to meet compliance obligations.

Businesses in the UAE free zones are also required to comply with TP rules. They should maintain supporting documents, including local and master files, to ensure compliance and avoid regulatory inspections.

Failure to comply with these regulations could lead to penalties or audits. It is important for businesses to stay informed and implement proper documentation practices to meet TP requirements under the UAE’s CT regime.

Our Transfer Pricing Services

We provide end-to-end transfer pricing solutions tailored for businesses in the UAE. Our services help companies manage compliance, mitigate tax risks, and structure intercompany transactions efficiently.

Transfer Pricing Advisory and Risk Assessment 

Intercompany transactions pose significant tax and compliance risks. Fair pricing while meeting regulatory requirements is essential for avoiding disputes and penalties.

Risk Reviews & Impact Assessments

We conduct in-depth evaluations of intercompany transactions to ensure they align with the arm’s length principle. Our risk assessments identify non-compliance issues, potential tax exposures, and necessary adjustments to prevent future conflicts with tax authorities. We manage risks effectively so businesses can maintain transparency and financial stability.

Transfer Pricing Planning & Modelling

Developing an effective pricing model is critical for multinational businesses. We assist in structuring intercompany transactions by designing tax-efficient pricing models that align with UAE transfer pricing rules. We help optimize tax positions by using data-driven financial simulations. This helps us implement pricing strategies that are both strategic and defensible.

Tax Optimization & Business Transformation

As businesses grow, their operational structures evolve. We help organizations adjust transfer pricing frameworks in response to changing business models. Whether restructuring, entering new markets, or streamlining costs, we keep transfer pricing aligned with regulatory and economic realities.

Transfer Pricing Compliance

Complying with transfer pricing regulations is mandatory for businesses operating in the UAE. Proper documentation helps mitigate audit risks and shows compliance to the arm’s length principle.

Transfer Pricing Disclosure Form

The transfer pricing disclosure form is a mandatory submission alongside the corporate tax return if applicable. It provides tax authorities with essential details about a company’s intercompany transactions, pricing methodologies, and related parties. This form offers transparency by allowing authorities to assess whether a business’s transfer pricing practices align with regulatory requirements and also provide risk assessment by analyzing the reported data to identify discrepancies or high-risk transactions that may require further examination. Companies that fail to provide accurate information or omit required details risk audits, penalties, or compliance-related inquiries. Proper completion of this form is essential to maintaining regulatory compliance and minimizing tax risks.

Local File

A local file demonstrates compliance with transfer pricing regulations within a specific jurisdiction. It follows OECD guidelines and includes in-depth details about intercompany transactions with related parties, such as financial statements, descriptions of transactions, details on goods or services exchanged, and a thorough analysis justifying pricing decisions. Businesses operating in the UAE that meet certain revenue criteria must prepare this document annually and submit it upon request. Companies must provide the local file to the UAE tax authorities within 30 days when requested.

Master File

The master file offers a broader perspective on a multinational group’s global operations, organizational structure, and transfer pricing policies. It provides high-level insights applicable to the entire group and helps tax authorities assess consistency in pricing policies across various countries. The master file includes details about the group’s business activities, profit drivers, and transfer pricing methodologies. A well-structured master file provides transparency and reduces the likelihood of tax disputes.

Country-by-Country Reporting (CbCR)

Multinational enterprises with an annual consolidated global turnover exceeding EUR 750 million (AED 3.15 billion) in the previous fiscal year must submit a country-by-country report. This report breaks down financial performance, revenue, taxes paid, and economic activity by jurisdiction. CbCR promotes tax transparency, ensures compliance with OECD guidelines, and prevents profit shifting to low-tax jurisdictions by giving authorities insights into profit allocation and tax payments across different countries.

Due Diligence

Before mergers, acquisitions, or corporate restructurings, businesses must assess potential tax and compliance risks related to transfer pricing. Our due diligence service provides a thorough evaluation of intercompany transactions to identify financial exposures, regulatory issues, and operational inefficiencies.

We conduct in-depth analyses to address transfer pricing risks before a transaction, so businesses can prevent tax disputes, optimize deal structures, and ensure regulatory compliance. Our approach enables organizations to make informed financial decisions while aligning transfer pricing policies with future business goals.

Benchmarking

To ensure intercompany transactions comply with the arm’s length principle, businesses must compare their pricing to market rates. Our benchmarking analysis helps companies justify their transfer pricing structures.

Our benchmarking process includes:

• Identifying and selecting comparable transactions.
• Analyzing market trends and financial conditions.
• Evaluating industry-specific pricing data.

We use trusted transfer pricing databases to provide accurate comparisons that comply with local regulations. A thorough benchmarking study helps businesses validate their pricing methods, reduce tax risks, and defend their transfer pricing policies during audits or tax authority reviews.

Transfer Pricing Rules to Exempt Person

Certain entities in the UAE must adhere to specific transfer pricing regulations. These rules determine how transactions between exempt entities and their business activities are treated for compliance and tax assessment.

Government Entity (Article 5)

When a licensed government entity conducts commercial activities, any transactions with its non-commercial operations are considered related-party transactions. These transactions must follow UAE transfer pricing rules for fair pricing and regulatory compliance.

Government Controlled Entity (Article 6)

Transactions between a government-controlled entity’s business operations and its mandated activities fall under transfer pricing regulations. These dealings must align with UAE tax rules to maintain compliance and transparency.

Extractive Business (Article 7)

Intercompany transactions between an extractive business and its other business units must comply with UAE transfer pricing regulations for tax compliance and avoid potential penalties.

Non-Extractive Natural Resource Business (Article 8)

Transactions between a non-extractive natural resource business and its related operations are classified as related-party transactions. These must be structured according to UAE transfer pricing rules for compliance and fair taxation.

Transfer Pricing Documentation

Our tax experts help you prepare detailed documentation required to comply with transfer pricing protocols. These documents include:

• OECD-mandated master files that contain all the info about all the members of the Multinational Entity (MNE) group 
• Local files contain data about all the local entities
• Country-by-country reports that contain data about the allocation of income and taxes globally for the concerned entity 

Complete documents in proper format as per required regulations to help avoid disputes during audits.

Transfer Pricing Planning & Advisory

We analyse your current transfer pricing structure and help you deploy strategies that are in compliance with UAE regulations. We also assist you with preparing advance pricing agreements (APAs). Our tax experts craft tailored transfer pricing policies that balance compliance needs with commercial goals. We help you remain tax-efficient without disrupting cash flows.

Partner with Avyanco for Guidance from Qualified Transfer Pricing Experts

Avyanco has extensive experience managing transfer pricing across various regions around the world. Our talented and experienced advisors offer practical guidance to help you identify and resolve transfer pricing concerns. 

Connect with us to get completely customised transfer pricing solutions for your operation in the UAE and globally.