Transfer Pricing · Dubai, UAE
UAE Transfer Pricing 2026: Master File, Local File & FTA Audits
The year the FTA started asking for your transfer pricing file
In 2026 the UAE Federal Tax Authority moved transfer pricing from theory to enforcement. It is now actively requesting transfer pricing documentation as part of risk-based corporate tax audits — and when it asks, you have around 30 days to produce a Master File and Local File. If your intra-group pricing is not defensible, the FTA can adjust your taxable income and charge 9% plus penalties on the difference. This guide explains what transfer pricing is, who has to document it, and how to be ready before the request lands.
Transfer pricing is not just a big-multinational problem. The arm's length principle applies to any UAE business that transacts with a related party or a connected person — including the owner-managed company that pays rent or a salary to its own shareholder. The documentation thresholds are what change with size; the pricing obligation does not.
The Arm's Length Principle, in One Line
Price every related-party transaction the way two independent businesses would have priced it. That applies to goods, services, intra-group loans, management fees, royalties and IP. You prove it using one of the five OECD methods — typically backed by a benchmarking study against comparable independent transactions.
Who Has to Document — and What
The Connected-Person Trap for Private Companies
Even below every documentation threshold, one rule catches almost every owner-managed business: payments to connected persons — owners, directors and their relatives — are only deductible up to their arm's length market value. Pay yourself above-market rent, salary or interest and the excess is added back to taxable income and taxed at 9%. Keep evidence that the amount reflects a genuine market rate.
How to Be Audit-Ready in 2026
- Map your related parties and connected persons: list every entity and person you transact with under common ownership or control.
- Catalogue the transactions: goods, services, financing, IP, management charges and owner payments.
- Pick the right method and benchmark it: support each material transaction with a study.
- Complete the disclosure form: make sure it reconciles to your accounts and your files.
- Prepare the Master and Local File before you file: so a 30-day request is routine, not an emergency.
Get Your Transfer Pricing File Ready
Exiloz maps your related parties, benchmarks your intra-group pricing, and prepares Master and Local Files that survive FTA review. See our corporate tax service or talk to a consultant today.
Frequently Asked Questions
Does transfer pricing apply to small UAE businesses?
The arm's length principle applies to any business with related-party or connected-person transactions. Full Master and Local File documentation only kicks in above AED 200M revenue (or AED 3.15bn group), but even small companies must price owner and director payments at market value.
How long do I have to submit documentation?
Generally 30 days from an FTA request, so the files should be prepared before you file, not afterwards.
What is the arm's length principle?
Related-party transactions must be priced as if between independent parties; otherwise the FTA can adjust your taxable income and charge 9% plus penalties.
Can I pay myself rent or salary from my company?
Yes, but only the arm's length market amount is deductible. Anything above market value is added back and taxed at 9%.
Explore the UAE Transfer Pricing Cluster
Each page below goes deeper on one part of this topic.
Step 01 · Arm's LengthThe Arm's Length PrincipleThe rule every related-party deal must meet.Explore →Step 02 · DocumentationMaster File & Local FileWho must prepare them, and by when.Explore →Step 03 · DisclosureThe TP Disclosure FormThe form that goes in with your CT return.Explore →Step 04 · Related PartiesRelated Parties & Connected PersonsWho counts, and which deals are caught.Explore →
