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The Essential Guide to Transfer Pricing with HAS Global Tax Consultants:
What HAS Global Tax Consultants Can Do for Your Business
As companies expand across borders, engaging in transactions with their related entities worldwide, transfer pricing becomes a critical focus—especially with the United Arab Emirates’ introduction of corporate tax and updated transfer pricing (TP) rules. HAS Global Tax Consultants in Dubai is here to ensure your business stays compliant, risk-free, and fully prepared for the evolving regulatory landscape.
What Is Transfer Pricing?
Transfer pricing refers to the rules and methods for pricing transactions between companies under common ownership or control. These include the sale of goods, provision of services, transfer of intellectual property, and even loan arrangements between related entities. The key principle is the “Arm’s Length Principle” (ALP), which means transactions should be priced as if the parties were unrelated, ensuring each country receives its fair share of tax revenues.
Why Transfer Pricing Matters in the UAE
The UAE’s rapid integration into the global economy has prompted the adoption of international tax standards. In 2022, Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses was issued, with transfer pricing provisions effective for tax periods starting June 1, 2023. The law requires related party transactions to meet the arm’s length standard and imposes documentation requirements for companies meeting certain revenue thresholds.
Key UAE Transfer Pricing Documentation Requirements
Transfer Pricing Disclosure Form (TPDF): Submitted with the annual tax return, disclosing key information about related party transactions.
Master File: Provides a big-picture overview of the multinational group’s business, TP policies, and global allocation of income.
Local File: Contains detailed information about the local entity’s transactions with related parties, including benchmarking and financial analysis.
Country-by-Country Report (CbCR): Required for large multinationals (AED 3.15 billion consolidated group revenue).
Thresholds: Companies with group revenues of AED 3.15 billion or more, or whose own revenue exceeds AED 200 million, must prepare and maintain a Master File and Local File. All companies must ensure their related party transactions adhere to the ALP, but small businesses and single-entity companies with no related party transactions have relaxed documentation obligations.
UAE Transfer Pricing: Aligning with International Standards
The UAE’s TP regime has been designed to align closely with the OECD Transfer Pricing Guidelines, ensuring global best practices. This includes adopting dispute resolution mechanisms such as:
Mutual Agreement Procedures (MAP)
Safe Harbour Rules (simple compliance options, though detailed UAE-specific rules are awaited)
Advance Pricing Agreements (APAs)
Advance Pricing Agreements (APAs): Proactive TP Risk Management
An APA is a forward-looking arrangement between the taxpayer and the tax authority specifying the transfer pricing methodology for certain transactions for a set period. The UAE Federal Tax Authority (FTA) is launching its APA program with Decision No. 4 of 2024 and Decision No. 2 of 2025, allowing applications for unilateral APAs in the fourth quarter of 2025. Bilateral and multilateral APAs, involving other countries’ tax authorities, are expected to follow.
Key benefits of APAs:
Certainty in TP arrangements
Reduced risk of double taxation
Minimized tax disputes and litigation
Enhanced transparency and compliance efficiency
Businesses operating in the UAE should follow these steps:
Identify Related Parties: Assess shareholding, common management, and control relationships.
Document Transactions: Maintain robust documentation supporting the arm’s length nature of all related party dealings.
Benchmark: Use reliable external comparables to justify transfer prices.
Monitor Thresholds: Prepare required documents (TPDF, Master File, Local File, CbCR) according to your annual figures.
Seek APA Guidance: For complex or high-value transactions, consider applying for an APA—for greater tax certainty and dispute prevention.
How HAS Global Tax Consultants Can Help
At HAS Global Tax Consultants, our team offers customized solutions for:
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Transfer pricing risk assessments
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Preparation of Master and Local Files
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Benchmarking studies
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Intercompany agreements drafting/review
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Disclosure and compliance support
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APA eligibility assessments and applications
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Dispute resolution and MAP support
Contact HAS Global Tax Consultants (Dubai) today to safeguard your business and seize opportunities in the new era of UAE transfer pricing!