UAE CORPORATE TAX: Disclosures and Documentation for Transfer Pricing in the United Arab Emirates

The Corporate Tax (CT) return form has been updated by the Federal Tax Authority (FTA), specifically with reference to the Transfer Pricing Disclosure Form (TP Disclosure Form). Transactions with Related Parties and Connected Persons must now be disclosed by taxable persons on the TP Disclosure Form.

The TP Disclosure Form is an essential component of CT Returns since the implementation of Corporate Tax in the United Arab Emirates. It contributes significantly to the assessment of a Taxable Person's tax obligations and ensures transparency in related party transactions.

The Disclosure Form must be completed by any taxpayer who has made agreements or transactions with their Related Parties and Connected People. It is necessary to file the Disclosure Form along with the company income tax return.

All taxpayers in the United Arab Emirates (including domestic and foreign-owned businesses) that have engaged in cross-border and domestic (between mainland and free zone firms) transactions with their connected parties and related parties are required to prepare Transfer Pricing Documentation.

To enable the tax authorities to accurately evaluate the arm's length nature of related party transactions, this comprehensive disclosure form attempts to assure conformity with the recently established UAE corporate tax law. We would advise companies to take the TP compliance carefully because there are a lot of details that need to be provided. This needs to be done for each related party / connected person transaction. Without conducting a benchmarking exercise, one will not be able to fill in and complete the above details or will not have enough documentation to support the market value or arm's length value for the transaction.

In compliance with Clause (2) of Article (55) of the Corporate Tax Law, a Taxable Person that meets any of the following requirements must keep both a master file and a local file during the applicable Tax Period:

a)???? If the taxable person is a part of a multinational enterprise group with total consolidated group revenue of AED 3,150,000,000 (three billion one hundred fifty million United Arab Emirates dirhams) or more during the relevant tax period, at any point during the tax period.

b)???? If the revenue of the taxable person is AED 200,000,000 (two hundred million United Arab Emirates dirhams) or more during the applicable tax period.

The transfer pricing documentation (master file and local file) must be provided to the Authority within 30 days of receiving a request if a taxable person's transactions with related parties and connected people during a tax period correspond to the requirements.

Financial services

If you need any professional advise/ guidance regarding UAE CT, you may please contact our Tax Department:?

Tax Advisor: Aqiel Booso

Email:?[email protected]

? ? ? ? ??[email protected]

Phone: +971 454 13205

? ? ? ? ? ? +971 457 52971

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