Transfer Pricing in UAE

Balancing Value, Building Trust

Transfer Pricing

Aligning Business. Ensuring Compliance.

HAS Global Tax Consultants provides comprehensive transfer pricing services in Dubai and across the UAE, ensuring your business is fully compliant with the latest UAE corporate tax and international standards for related party transactions.

What is Transfer Pricing?

Transfer pricing is the practice of determining the price for goods, services, or intellectual property exchanged between related companies within the same group. UAE law requires these prices to follow the arm’s length principle—that is, they must match what independent parties would pay in similar circumstances. This principle is crucial for preventing profit shifting and ensuring fair tax reporting across borders.

Our Transfer Pricing Services

Risk reviews and impact assessments for all intercompany transactions
Transfer pricing planning, benchmarking, and method selection
Preparation of disclosure forms, Local Files, Master Files, and CbCR
Support during FTA audits, queries, and dispute resolution
Strategic advice for tax optimization and business transformation

UAE Transfer Pricing Regulations: Key Details

Who Must Comply: All UAE businesses with related party or connected person transactions—whether domestic or cross-border—must comply, regardless of free zone status or corporate tax grouping.

Disclosure Requirements:

File a transfer pricing disclosure form with your corporate tax return if your total related party transactions exceed AED 40 million, or if individual categories (goods, services, interest) exceed AED 4 million. Disclose payments to connected persons exceeding AED 500,000.

Documentation:

Prepare and maintain a Local File and Master File annually if your UAE turnover exceeds AED 200 million or if you’re part of a multinational group with global turnover above AED 3.15 billion. Country-by-Country Reporting (CbCR) is required for large multinational groups. Documentation must be contemporaneous and provided to the FTA within 30 days upon request.

Exemptions

Small Business Relief claimants are not required to prepare transfer pricing documentation, but must still comply with the arm’s length principle.

Accepted Methods

UAE follows the five OECD-endorsed methods: Comparable Uncontrolled Price, Resale Price, Cost Plus, Transactional Net Margin, and Profit Split. The most suitable method should be chosen based on the transaction’s nature and available comparable.

Penalties:

Non-compliance can result in substantial fines, double taxation, and reputational risk.

Why Choose HAS Global?

Deep expertise in UAE and international transfer pricing rules
End-to-end compliance and documentation support
Tailored solutions for businesses of all sizes

Tax Registration FAQs

How does the UAE's transfer pricing framework impact Free Zone entities

The UAE’s transfer pricing rules apply to Free Zone entities, even those enjoying a 0% tax rate. To keep tax benefits, Free Zone companies must:

Follow the arm’s length principle for all related-party transactions
Prepare transfer pricing documentation (Local File, Master File) if revenue thresholds are met
Submit a disclosure form if related-party transactions exceed AED 40 million
Align with Economic Substance Regulations (ESR)
Maintain proper records to avoid losing 0% tax status and facing penalties

In short, Free Zone entities must meet strict transfer pricing and documentation requirements to keep their tax advantages and avoid fines.

How can businesses conduct a robust comparability analysis for transfer pricing purposes

To conduct a robust comparability analysis for transfer pricing:

Define the transaction and document key terms, functions, assets, and risks (FAR analysis).
Select the best transfer pricing method (e.g., CUP, TNMM, Profit Split) based on your transaction and available data.
Identify comparables using internal or external data sources, focusing on similar industry, functions, and markets.
Adjust for differences between your transaction and the comparables (e.g., working capital, geography).
Determine the arm’s length range and ensure your pricing falls within it.
Document everything clearly, including method choice, data sources, adjustments, and results.

Regularly update your analysis and consult experts to stay compliant and minimize audit risks.

Why is transfer pricing significant in the UAE?

With the recent introduction of corporate tax, the UAE’s historically tax-friendly environment is changing. Compliance with transfer pricing regulations has become mandatory, making it vital for businesses operating in the region.