Transfer Pricing under the UAE Federal Corporate Tax Law

Transfer Pricing  

Under the UAE Federal Corporate Tax Law

Transfer Pricing under the UAE Federal Corporate Tax Law

The United Arab Emirates (“UAE”) Corporate Tax (“CT”) law also includes a comprehensive Transfer Pricing (“TP”) regime. The CT and TP regime shall be effective for financial years starting on or after 01 June 2023. The UAE TP Rules and Documentation requirements are in line with the internationally accepted OECD TP Guidelines.


Ensure that transactions between related parties and connected persons are carried out at arm’s length (at market value).


All transactions (both domestic and international) between related parties and connected persons carried by resident or foreign persons including Free Zone.

Related Parties

        Individuals related to the fourth degree of kinship

        Owns minimum 50% of ownership

        Controls the juridical person

        Partners in an unincorporated partnership

        A person and its permanent establishment

Connected person

        Owner of the taxable person

        Director or officer of the taxable person

        Related party of any of the above

Compliances and consequences

        TP documentation – Master and Local file

        Related Party Disclosure Form

        Adjustment to the taxable income in absence of Arms Length

        Corresponding adjustment for international related party transactions


        No deduction on payments to connected person for non-compliance with ALP

        Mandatory TP compliance to be a Qualifying Free Zone benefitting 0% CT rate

TP Methods to determine the ALP

        Comparable uncontrolled price (“CUP”)

        Resale price method (“RPM”)

        Cost plus method

        Transactional profit split method (“PSM”)

        Transactional net margin method (“TNMM”)

Factors to consider for the selection of the TP method ?

Contractual terms

        Characteristics of goods/services

        Economic circumstances

        Functions, Assets and Risk

        Business strategies

How can Crowe help?

A.   Identify the TP applicability to the transactions with connected persons and related parties.

B.    Support in the preparation of:

        TP Study Report which includes Function, Asset and Risk (“FAR”) analysis, Evaluation of TP methods, and Economic analysis.

        TP documentation, intercompany agreements, conduct benchmarking for determining the Arms’ Length Price.

C.   Support in obtaining and negotiating Advance Pricing Agreements (“APAs”) with the relevant tax authorities.

Contact Us

Markus Susilo
Markus Susilo
Partner- Payroll and Indirect Tax
Alessandro Valente
Alessandro Valente
Director - International Tax Service & Transfer Pricing