Designing Structure in UAE

Fast & Compliant with HAS Global Tax Consultants

Designing Structure

Transfer Pricing

HAS Global Tax Consultants offers expert transfer pricing structure design in Dubai and across the UAE, ensuring your business complies with UAE corporate tax regulations while optimizing cross-border transactions. A well-designed transfer pricing structure is critical for multinational enterprises (MNEs) and local groups to align intercompany transactions with the arm’s length principle, avoid disputes, and maintain compliance with evolving tax laws.

What is Transfer Pricing Structure?

Transfer pricing structure refers to the framework for pricing goods, services, and intellectual property exchanged between related entities. In the UAE, transactions must follow the arm’s length principle—prices should mirror what independent parties would agree to. A robust structure minimizes risks of double taxation, penalties, and audits by the Federal Tax Authority (FTA).

Key Components of a Strong Transfer Pricing Structure

Policy Design

Develop clear transfer pricing policies that define methodologies (e.g., Comparable Uncontrolled Price, Profit Split) for transactions with local and foreign related parties, payments to connected persons, and intragroup services. Policies must align with OECD guidelines and UAE regulations.

Intercompany Agreements (ICAs)

Draft legally binding contracts outlining roles, risks, and terms for transactions. ICAs provide clarity during FTA audits and ensure compliance with the arm’s length standard.

Benchmarking & Economic Analysis

Conduct industry-specific benchmarking studies to justify pricing using internal and external comparables. Adjust for differences in functions, assets, and risks (FAR analysis).

Documentation

Prepare Local Files (for UAE entities) and Master Files (for multinational groups) to detail transactions, methodologies, and compliance. Documentation must be contemporaneous and submitted to the FTA upon request.

Compliance & Risk Management

Regularly review policies to address regulatory changes, business restructuring, or shifts in market conditions. Identify risks like tax adjustments or disputes early to mitigate penalties.

Why Choose HAS Global?

Deep Expertise: Knowledge of UAE and OECD transfer pricing rules, including Free Zone requirements.
End-to-End Solutions: From policy design to audit defense, ensuring compliance at every stage.
Strategic Insight: Align your structure with business goals, tax efficiency, and global operations.

Designing Structure FAQs

What are the essential components of a transfer pricing structure

Arm’s length pricing for all related party transactions
A clear transfer pricing policy
Legally binding intercompany agreements
Functional and economic analysis of each party’s roles and risks
Benchmarking with comparable transactions
Comprehensive documentation (Local File, Master File)
Regular risk assessment and compliance with UAE and OECD rules

These elements ensure compliance, minimize risks, and support audit readiness.

What are the risks associated with improper transfer pricing

Improper transfer pricing can lead to tax penalties, audits, double taxation, and costly disputes with authorities. It also risks financial losses, reputational damage, and operational disruptions. Proper compliance and documentation are essential to avoid these issues.

How do intercompany agreements influence transfer pricing compliance

Intercompany agreements support transfer pricing compliance by clearly documenting the terms and pricing of related party transactions. They help prove arm’s length practices, reduce audit risks, and ensure consistency with tax regulations. Well-drafted ICAs are essential for defending your transfer pricing in case of tax authority scrutiny.