Transfer Pricing Documentation
Transfer Pricing Documentation in the UAE: What You Have to Keep
Transfer pricing arrived in the UAE quietly, attached to the corporate tax law, and a lot of family groups still have not noticed. If money moves between companies you control, between you and your company, or between the UAE and a relative's business abroad, the arm's length rule already applies to it.
- Related-party and connected-person transactions mapped
- Disclosure form prepared with the return
- Local File and Master File where the thresholds bite
- Intercompany agreements written before they are needed
Dubai-based corporate tax support for UAE mainland, free zone and group structures.
Last reviewed against current FTA guidance.
Quick Answer
UAE transfer pricing rules require transactions with related parties and connected persons to be priced at arm's length. Every taxable person completes a disclosure form with the return where the transaction thresholds are met. A Local File and Master File must be maintained where the taxable person's revenue reaches AED 200 million in the period, or where it belongs to a multinational group with consolidated revenue of at least AED 3.15 billion, and produced to the FTA within 30 days of a request.
Who the Rules Reach
Two categories matter. Related parties are companies and individuals connected through ownership, control or kinship, which in the UAE stretches to the fourth degree. Connected persons are owners, directors and officers of the business, and their relatives.
That second category is where owner-managed companies get caught. A director's salary, a shareholder loan, rent paid to the owner for the office: all of it has to be at market value, and the deduction can be denied if it is not.
- Companies under common ownership or control
- Relatives to the fourth degree, including by marriage
- Owners, directors and officers of the business
- Payments to a connected person tested against market value
- Partnerships and their partners
The Disclosure Form
The disclosure form rides with the corporate tax return. It asks you to list related-party transactions by category and value, and to state the transfer pricing method applied to each. It is a schedule, not an essay, but it commits you to a position in writing.
Companies that fill it in on the last afternoon tend to write down whatever the ledger says and call it comparable uncontrolled price. That answer has to survive the next five years.
- Filed alongside the corporate tax return
- Transactions grouped by category and value
- The pricing method stated for each category
- Connected-person payments disclosed separately
- Consistency with prior periods matters
Local File and Master File
These are the heavier documents, and only groups above the thresholds have to keep them. The Local File describes the UAE entity, its controlled transactions and the analysis supporting each price. The Master File describes the group: structure, intangibles, financing and the overall allocation of profit.
Neither gets filed with the return. Both have to exist, and to be handed over within 30 days if the FTA asks. Thirty days is not enough time to write one from scratch, which is the entire point of the deadline.
- Revenue of AED 200 million or more in the tax period, or
- Membership of an MNE group with consolidated revenue of AED 3.15 billion or more
- Local File covers the UAE entity and its transactions
- Master File covers the group as a whole
- Produced within 30 days of an FTA request
Benchmarking, and When You Actually Need It
A benchmarking study finds independent comparables and shows that your price sits inside their range. It is the evidence behind the method you disclosed. For routine service recharges within a modest group, a properly reasoned internal analysis is often proportionate. For financing, royalties or a distribution margin carrying real profit, a database study is the credible answer.
We tell you which of those you are looking at before you commission anything.
- Method selected and justified, not assumed
- Database search for material or high-risk transactions
- Proportionate internal analysis where that is defensible
- Refreshed when the business or the market moves
- Written up so a reviewer can follow the logic
Agreements Are Half the Evidence
The weakest files we see are not the ones with the wrong method. They are the ones with no paperwork at all. Management fees charged for years with no service agreement. Interest-free loans between sister companies. Rent paid to a shareholder with nothing in writing.
An agreement written today does not fix last year. It does fix next year, and it takes an afternoon.
- Written intercompany service and licence agreements
- Loan agreements with a stated rate and term
- Evidence the service was actually provided
- Allocation keys documented and applied consistently
- Board approval where the amounts are material
How Exiloz Approaches It
We start with a mapping exercise: who is related, what flows between them, and how much. That alone tells you whether you are in disclosure-only territory or full documentation territory, and it usually takes days rather than weeks.
From there the work is scoped to what the group actually needs. Nobody benefits from a Master File they were never required to keep.
- Transaction mapping first, scope second
- Disclosure form prepared with the return
- Local File and Master File where the thresholds are met
- Agreements drafted alongside the analysis
- An annual refresh so the file never goes stale
Does transfer pricing apply to small UAE companies?
The arm's length rule applies to every taxable person with related-party or connected-person transactions, whatever the size. What changes with size is the documentation: only groups above the thresholds must keep a Local File and Master File.
What are the Local File and Master File thresholds?
A Local File and Master File are required where the taxable person's revenue in the tax period is AED 200 million or more, or where it is part of a multinational group with consolidated group revenue of AED 3.15 billion or more.
How long do we have to produce them?
Thirty days from the FTA's request. That is why the files have to be maintained during the year rather than written when the letter arrives.
Who counts as a connected person?
Owners, directors and officers of the taxable person, and their relatives. Payments to them have to be at market value or the deduction can be denied.
Is a benchmarking study always required?
No. It is required where the transaction is material or high risk. Routine low-value recharges within a small group can often be supported by a reasoned internal analysis, provided it is written down.
What if we have never documented anything?
Start with a mapping exercise for the current period and get agreements in place now. Prior periods are dealt with through the return or, where a figure was wrong, a voluntary disclosure.
Do free zone companies have transfer pricing obligations?
Yes, and a Qualifying Free Zone Person must satisfy the arm's length standard and keep documentation as a condition of the 0% rate. It is not optional there.
Does the disclosure form get filed separately?
No. It accompanies the corporate tax return, so it shares the same nine-month deadline.
Can you review a file another adviser prepared?
Yes. A second read before an FTA request is far cheaper than a rewrite after one.
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Map the Related-Party Flows Before the FTA Asks
We map the transactions, prepare the disclosure, and build the Local File and Master File where the thresholds bite. Start with a transaction map.
